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.