ANALYSIS OF THE MARKETING ENVIRONMENT

 Every move a marketer makes is affected by, and has some effect on his marketing environment. This could happen on a small scale, such as between a manufacturer and a retailer. It could also happen on a larger scale involving entire industries and governments. Very often, changes in the elements within the environment create new opportunities and eliminate old ones.

These changes can be exciting, frustrating, confusing, irritating and invigorating. They can establish entire industries as well as drive some other companies into bankruptcy.

In order to better understand the marketing environment, 8 companies that want to be successful must continually evaluate all environmental factors, by first gathering and then analyzing market information. The essence is to understand how the various factors affect products, pricing, promotion and distribution, both currently and into the future.

Monitoring environmental changes helps discover emerging opportunities such as growth markets and unfilled market needs. Armed with such information, marketers can develop strategies suited to the changing environment.

On the other hand, firms who fail to keep up with environmental changes risk missing interactive opportunities. In actual fact, they may lose their place in the market as competitors identify the same opportunities and introduce products that take advantage of them. In the extreme situation, the unaware firm is forced out of business completely.

ENVIRONMENTAL SCANNING AND ENVIRONMENTAL ANALYSIS

The process of gathering information on various aspects of the marketing environment is called environmental scanning. This information can be collected from salespeople, dealers, distributors, suppliers, government agencies, magazines, publications, newspapers, books etc.

Environmental analysis is the interpretation of all this information. Marketers evaluate the data collected in environmental scanning with an eye to their own business, considering how the various trends could affect them both now and in the future. By so doing, they can create marketing strategies adapted to the dynamic marketing environment.

APPROACHES TO THE MARKETING ENVIRONMENT

One can respond to his marketing environment in two ways. The first way is through reactive marketing, in which the environmental forces are viewed as being uncontrollable, and one simply try to adjust to them. The second method is via proactive marketing, whereby steps are adequately taken to change the marketing environment and this make it more conducive to one’s activities.

Let us see how the two approaches are different. For instance, when confronted with new legislation banning some of their products, reactive marketers might abandon those offerings and concentrate on developing new products in unregulated areas.

A proactive marketer facing the same external threat would probably join an industry coalition to lobby legislators and raise public support for the industry’s point of view. However, you should note that neither the reactive nor the proactive approach is inherently better. Whatever approach is chosen depends on organisational goals, ethical and legal constraints, and other circumstances. Note also, that this does mean that a marketer always has a choice. 

For instance, one might be affected by a sudden change in the marketing environment and just left with no alternative but to react. However hard one might study the environment, the behaviour of nature, governments, competitors, or customers may not be accurately predicted. But every little bit helps. Therefore, by understanding the environment and playing an makes active role in one’s industry, there is a reduced chance of being at the mercy of outside forces.