The marketing environment is, broadly, the set of variables that affect, directly or indirectly, the decision-making, the strategies and the marketing actions of an organization.
What is the marketing environment
It is the set of elements external to the organization that affect or may affect its actions. (Rodríguez Ardura, p.82)
It consists of the great social forces that one cannot control, but which affect the ability of your company to operate efficiently and produce profits. (Cyr and Gray, p.39)
It is the set of direct and indirect, controllable and uncontrollable forces that are capable of exerting influence, both from a macroeconomic and microeconomic level, on all the decisions, actions and results of the company's marketing. (Rivera and de Garcillan, p.54)
It is made up of forces and agents that affect the ability of a company to operate effectively providing products and services to its consumers. These factors affect different departments and activities of the company such as suppliers, customers, intermediaries, competitors and interest groups. (Baena Graciá, p.57)
Why study it
There are several reasons, among them: the need to reduce uncertainty for decision-making, the need for prospecting for planning, or the need for strategic anticipation for innovation. In two words, anticipation and adaptation, as can be seen from the following quotes:
Unless marketing managers understand the external environment, the company will not be able to plan intelligently for the future. (Baena Graciá, p.57)
From a marketing perspective, the study of the environment is critical because any change in the environmental variables affects both the company and the market. As a consequence, the notion of exchange and transaction between the components of the market concept may be affected. (Rivera and de Garcillan, p.56)
The company that knows how to learn from the environment at a high level will be able to make better use of it and turn it into a source of business opportunities. This provides a greater capacity for success and survival, either due to the speed of response or the ability to generate real contributions in the income statement. These companies make the environment a permanent strategic ally. Since you cannot survive without it, it is better to ally yourself and get as much of it as possible. On the other hand, companies that live with their backs to the environment are called to suffer bankruptcies and lose competitiveness and profitability. This hypothesis is demonstrated in the day to day of its operations, because as the popular saying goes, shrimp that sleeps, is carried away by the current, or as Jack Welch, who was CEO of General Electric for many years, said:"Renewed or die". (García Sánchez, p.68)
Environment classes
Basically theorists and researchers divide the environment into two layers, an external one generally called a macro environment and an internal one known as a micro environment.
Esteban, et.al. (p.58-75) divide it into macro and micro environments:
- Macroenvironment: variables not controllable by the company that allow detecting threats and opportunities. Microenvironment: each of the components that make up the existence of companies that allow us to detect weaknesses and strengths.
Kotler (p.9) also calls them:
- Task: includes the immediate actors that participate in the production, promotion and distribution of the offer, and that affect the ability of the company to serve its customers. Broad: they contain major forces of society that can have a significant impact on the actors in the task environment.
Rivera and de Garcillán (p.56) mention three classes according to their type of influence on the company:
- Macroenvironment: formed by variables that do not directly influence the company and that are beyond its control. Operational: groups the variables that are related to the competitive operation of the company. Internal: made up of the variables that influence the company in the short term and over which it has more influence.
Elements or variables to consider in the analysis of the environment
Kotler (p.76-96) indicates that in the macroenvironment there are six forces that affect the company and that must be studied:
- Demographic environment. Population trends in the markets. Economic environment. Income and consumption trends of people. Natural environment. Four trends: the shortage of raw materials, the cost of energy, the levels of pollution and government regulations. Technological environment. Four trends: the pace of change, opportunities for innovation, variation in R&D budgets, and increased regulation. Political-legal environment. Laws, government agencies, and pressure groups that influence and limit organizations and individuals. Sociocultural environment. Beliefs, values, perceptions, lifestyles and norms of those who make up the markets.
Kotler and Armstrong (p.68-72) suggest that regarding the microenvironment the following elements should be studied:
- The company. The groups that make up the company, senior management, finance, R&D, purchasing, manufacturing and accounting. Providers. The availability of the supply and the shortage of supplies, among others. Intermediaries. Physical distribution, marketing and financial services. Customers. Consumer markets, industrial markets, reseller markets, government markets, international markets. Competitors. The company must provide greater value and satisfaction to its customers than its competitors. Public. Also known as stakeholders. Financial, government, citizen action, local, general and internal audiences.
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Then Professor Fernando Doral, from the School of Business and Management (ENYD), makes a didactic explanation of the analysis of the marketing environment -macroenvironment and microenvironment-, its purposes, tools and elements.
Bibliography
- Baena Graciá, Verónica. Marketing Foundations: Environment, Consumer, Business Strategy and Research, Editorial UOC, 2011.Cyr, Donald and Gray, Douglas. Marketing in small and medium enterprises, Editorial Norma, 2004. Esteban Talaya, Agueda, et.al. Marketing principles, ESIC Editorial, 2008. García Sánchez, María Dolores. Marketing manual, ESIC Editorial, 2008.Kotler, Philip. Marketing Management: Essential Concepts, Pearson Education, 2003. Kotler, Philip and Armstrong, Gary. Marketing: Edition for Latin America, Pearson Education, 2001. Rivera Camino, Jaime and de Garcillán López Rúa, Mencía. Marketing direction. Foundations and applications, ESIC Editorial, 2012. Rodríguez Ardura, Irma (Coordinator). Marketing principles and strategies, Editorial UOC, 2006.
