A marketing environment includes all of the internal and external factors that drive and influence a company’s marketing efforts. To maintain success and address any threats or opportunities that may affect their work, marketing managers must remain aware of the marketing environment. A marketing environment is vast and diverse, with factors that are both controllable and uncontrollable. A solid understanding of your marketing environment can help you:
Identify opportunities: Understanding your marketing environment allows you to spot and capitalize on market opportunities before they pass you by. Assume your marketing team notices an increase in digital purchasing over in-store sales. You might decide to devote more resources to your online marketing funnel in order to increase sales.
Identify threats: Investigating your marketing environment alerts you to potential threats that may have an impact on your marketing activities. A market leader, for example, could diversify their product portfolio to compete with your company. Knowing this in advance can help you plan your marketing efforts to maintain and grow your market share.
Manage changes: Paying attention to the marketing environment also aids in the management of changes and the maintenance of growth in a volatile economy. By monitoring their marketing environment, marketing managers can forecast and determine timely marketing campaign strategies.
Features of a marketing environment
Typical characteristics of a marketing environment include:
Dynamic: The factors that influence marketing environments change over time. These could include technological advancements, industry regulations, or even changes in customer preferences.
Relative: Each organization’s marketing environment is relative and unique. Because of differences in the marketing environment, a specific product from your company may sell faster in the United States than in Europe.
Uncertain: Market forces are erratic. Even with constant research, unexpected threats or opportunities may arise in your marketing operations. To achieve their objectives, effective marketers must be able to quickly learn, pivot, and strategize.
Complex: A marketing environment is complicated due to the numerous internal and external forces at work. For example, you must balance the ability and resources of your team with stakeholder expectations, customer satisfaction, and other ethical and environmental concerns.
Types of Marketing Environments
There are two major kinds of marketing environments:
Internal marketing environments: Internal marketing environments are made up of factors that are under your control and have an impact on your marketing operations, such as your organization’s strengths, weaknesses, uniqueness, and competencies.
Consider your people and teams, the quality of your product or service, capital assets and budgets, and company policy as essential marketing elements. Internal marketing environment factors are under your control.
Your internal company culture, for example, influences how your employees behave, which in turn influences your marketing operations. Employees will be more engaged in an organization that emphasizes teamwork and collaboration, for example. As a result, the organization will outperform competitors who do not share these values.
External marketing environments: The external marketing environment includes all factors over which your organization has no control, such as technological advancements, regulatory changes, social, economic, and competitive forces.
These factors may be controllable or uncontrollable, but defining and studying their changes and trends provides your business and marketing team with some leverage to stay on track. The external marketing environment is divided into two categories: micro and macro marketing environments.
You can further divide the external marketing environment into:
Micro-marketing environment: The microenvironment in marketing is inextricably linked to your business and has a direct impact on marketing operations. Customers, suppliers, business partners, vendors, and even competitors are all included. To some extent, microenvironmental factors can be controlled. Assume your company depends on a network of suppliers, distributors, and retailers to get its products to customers. It’s a good idea to cultivate good relationships with these vendors because any changes can have an impact on your marketing strategy.
Macro marketing environment: Your macro marketing environment is made up of all the factors outside of your organization’s control. These factors can be easily remembered by using the PESTLE acronym, which stands for:
P stands for political factors; E stands for economic factors; S stands for social and demographic factors; T stands for technological advancement factors; L stands for legal and regulatory factors; and E stands for environmental factors.
These uncontrollable factors can have a significant impact on your business and marketing operations. Political changes, for example, may have a significant impact on how you market and conduct business in specific regions.
Your macro-marketing environment is ever-changing. It is critical to keep a close eye on potential threats or opportunities to your business. Unpredictable environmental change, such as the COVID-19 pandemic in 2020, can, for example, significantly alter the way we work, market, and conduct business globally. The effects of the COVID-19 pandemic are still being felt by marketers. First, social distancing and remote work altered how we market goods and services. Inflation and rising living costs now loom large over the macro-marketing environment.
While the macro-marketing environment can be overwhelming and cause businesses to fail, it can also lead to growth. A curious mindset and a healthy company culture that encourages employees and teams to share ideas, collaborate, and take creative risks will set your company up for success.