The ultimate purpose of the Marketing environmental analysis is to facilitate the firm’s strategic response to the environmental changes in order to sell its products. All the necessary environmental forces are specified in the article for better understanding.
The Marketing Environment can be divided into two major components.
Macro environment: The general environment which affects the working of all the firms in a broader way and on long term basis.
Micro environment: Specific to the business or firm and affect its working on short term basis.
Macro-Economic Environmental Analysis
Demographic: Factors relating to population such as size, growth rate, age distribution, religious composition, etc…
Economic: It determines the strength and size of the economy the firm is doing business within. Higher economic growth leads for more marketing and higher financial growth of the company.
Government: The type of government ruling the country is a powerful influence on business and marketing. Lots of marketing policies depend on the Government policies.
Legal: Firms prefer to operate in a country where there is a sound legal system such as in US and some of the developed nations
Political: Business environment depends of the political system of the country. Marketing environment is very much different in a democratic country like India and Communist ruled Country like China where Facebook and Google are banned.
Socio-Culture: The beliefs, values and norms of a society determine how individuals and organizations relate to each other.
Technological: Technological progress of the country which helps to increase business and open up new opportunities.
Global Connection: Connection with other developed countries help to complete the environmental analysis. Iran is continuously losing global customers for its crude oil due to issues with US and EU regarding its nuclear program.
PEST Analysiscan be used to identify the macro-economic conditions in a marketing environment.
Micro-Economic Environment Analysis
Consumer: It occupies the central position in the marketing environment is the main target point in any kind of marketing
Competitors: Competition shapes business. A study of the competitive scenario is essential for the marketer to identify the threats and opportunities involved in a specific market.
Company: The objectives, goals and resource availabilities of a firm occupy critical position in the micro environment of marketing.
Public: It is a major force and marketer has to carefully study their opinion, values, beliefs and attitudes for each and every small region
Market: The market has to be studied in terms of its actual and potential size, its growth prospect and also its attractiveness.
Suppliers: With their own bargaining power they affect the cost structure of the industry. They constitute a major force which shapes competition in the industry.
Intermediaries: It exerts a considerable influence in the marketing environment.
Environment Scanning consists of the processes of gathering information about the company environment, then analyzing it and forecasting the impact of all predictable environmental changes.
Customer Analysis: The first logical step in strategic market planning is to analyze the customer i.e., to understand customer motivation, their unmet needs and how they can be segmented.
Competitor Analysis: It starts with identifying current and potential competitors. After competitors are identified, the task is to understand them and the strategies.
Market Analysis: It builds on customer and competitor analysis, its objective being to determine the market response to current and potential participants and also to understand the dynamics of the market.
Company Analysis: The Company has to review its strength and weakness against the backdrop of the environmental opportunities and threats i.e., the SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) can be used for the same