Marketing Environment

The business of marketing requires knowledge and expertise on the ways in which
offering a product or service can influence customer behaviour in favour of the
business. These skills, summarised by McCarthy as the 4 P’s include: knowing what
variants of a product to offer, what prices they should be offered at, placing
appropriate distribution strategies and promoting to the right target audience for ideal
reception and satisfaction (Khan, 2014). On the other hand, understanding the effects
of external market factors on the performance or perception of any business is also
key to the success of a marketing manager and team (Matyusz, 2012). Elements of an
external marketing environment can cause the strategy used to either be more or less
effective, and ultimately require a different approach in intent or execution.

The set of factors which marketers have little control over are categorised as
Economic, Technological, Social and Cultural, Political and Regulatory, &
Competitive (Ramya, 2016). These classifications broadly cover the wide range of
market impulses that could directly affect the ability of a product or service to sell.
Being able to discern which combination of these factors might adversely affect the
marketing blueprint is crucial to maintaining an effective strategy.

Economic Factors

Current news about the economic affairs of a sector is a very relevant indicator to
monitor as a marketing manager. The ability to comprehend and digest economic
factors and how they affect the marketing strategy gives a marketer the added
advantage of responding quickly and properly to this kind of stimuli (Haluk et. al.,
2007). The piece of information needs to be interpreted correctly to determine how it
would alter the supply chain, labor or financial resources, and most importantly
consumer confidence.

An increase or decrease in any of these three elements often will have a correlation
with the success of the product or service being provided. The significance of this
shift also needs to carefully be considered, so that the appropriate adjustments can be
made, and any overreaction or a lackadaisical response can be avoided. A great
marketing strategy often has economically related data inputs that should trigger a
response, allowing the managers to assess the levels of demand and supply, related
aggregates such as prices and sentiment, and how the globalisation of today’s markets
directly affects the goods and services that a company provides (Duus, 1997).
Technological Factors

Arguably the biggest influence in marketing strategies within the last two decades,
the emerging capabilities of technological advances have changed the scope of
marketing as a business. The adoption of new technologies, or lack thereof, can affect
a company’s competitive ability, product quality, presence, awareness, cost
effectiveness, amongst other things (Yannopoulos, 2011). This factor can
significantly alter the way in which goods and services are marketed to the consumer.
A marketing manager can utilise technology to gather data on the behaviours of their
target audience, using it to develop strategies to take advantage of this vital
information and gain a competitive advantage.

Technology also allows certain types of businesses to scale and grow very quickly by
providing a platform or feature that can reach a wider audience. These benefits can
also manifest as pitfalls for organisations whose structure and success are susceptible
to redundancy in the wake of more efficient and appealing products or services
(FinancialTimes, 2016). An innovative manager must know what latest technological
opportunities can be utilised in their field and be able to determine how much
commitment should be made to new methods of conducting business and marketing
them effectively.

Social & Cultural Factors

Socio-cultural norms and trends are a very unpredictable factor that carries a lot of
significance in the way that goods and services are marketed. In the social climate of
today, marketing business is centred around creating a brand with a cultural appeal
that will drive consumer behaviour to increase the overall demand (Zhang et. al.,
1996). Consumer behaviour is largely influenced by herd mentality, and purchases
are often motivated from the desire to belong to a certain community or partake in a
current trend. Marketing managers often take these opportunities of enthusiasm to
sell their products to the target audience that is most responsive to what is in style.
Narrowing down the demographics of a target audience which consists of
characteristics such as age or gender are also an important data set for determining
the approach taken by any marketing campaign or strategy.

Businesses are also vulnerable to scandal or cancel culture, and marketing strategies
built around controlling the narrative and perception of a brand or business and its
product or service is pivotal to the success during a period of backlash or boycotting
(Serhan et. al., 2015). From human rights issues to impact on the climate, the reasons
for such an effect can vary widely due to the societal and cultural norms, values and
habits, and marketing managers need to constantly be aware and prepared to adopt
different strategies accordingly to protect the business from a downturn in sales.
This is extremely complex to achieve consistently as the socio-cultural environment
is always changing. However, ignoring this factor can severely harm a company’s
interests and requires a manager that can adjust the product or service offered to meet
what the customer desires.

Political & Regulatory Factors

Laws and policies in business are often set to protect both the consumer and the
business providers in different aspects. These regulations are a factor that can help or
harm the strategy of a marketing manager and the business. Restrictions on
advertising are an example of a negative policy for marketers who have less legal
avenues or a smaller audience to promote their products to (Savell et. al., 2015).
Patent laws are a positive example of regulation that can foster innovation and be
framed as a marketable advantage by any brand, but which can also indirectly make
the market more competitive as a result. Legislation that requires certain information
about a product and permissions for a service to be made available to the consumer
can affect the way the product is packaged and marketed to the end user, or
fundamentally change the contents and quality of the service or product to fit the new
requirements or demographic.

A marketing manager should be familiar with the political and legal framework of the
environment in which they find themselves. This awareness of the interpretation of
policies and the status quo will make the marketing strategies that are developed
attuned to the nature of the system at any point in time. In today’s market, the
influence of international laws has spread wider because of globalisation; the controls
and checks put in place need to be considered to avoid any legal ramifications on the
marketing management side of business (Curran et. al., 2017).

Competitive Factors

Being aware of what the competition of any business is doing is an added edge to the
strategy of a marketing manager. A useful habit to adopt involves monitoring a direct
competitor and a maker of substitute products or services. By establishing their
market share and understanding the target audience of other companies and how it
may be similar or differ from the current strategy on ground, a plan of action can be
formed on how better to market your business in a way that will benefit the bottom
line of the company. Sometimes competition can be beneficial for brands, if a
marketing manager uses the right approach. A campaign that encourages public
display of a customer’s affiliation by practicing relationship marketing can be a good
medium of promotion for any business and generate demand for their goods and
services (Khoa, 2020).
Effect of Marketing on the Environment

The impact of effective marketing strategies can be felt throughout the landscape of
commercial activity. Arguments have evolved in recent years that suggest the
definition of market mixing outlined by McCarthy has been superseded with the
introduction of newer marketing areas which respond differently to the traditional
elements of marketing. Successful marketing can affect consumer behaviour in a way
that benefits a business by persuasive marketing strategies that are memorable,
encourage spending and sway the choices consumers make towards a brand. This is
achieved through psychological marketing, and its effect can impact sales, growth
and boost the economic fortitude of a company or even an entire country. Great
marketing can indirectly increase the demand for goods and services that are offered,
affecting prices and changing the perception of the public towards the brand or
business. The purpose of marketing is to directly influence consumer habits and
choices to favour the business model of any organisation, and by achieving this, the
knock-on effect on external environmental factors is ultimately inevitable.
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