5 Tips To Help You Assess Your Marketing Environment
Several external and internal factors impact the marketing environment of a business. While some of these factors are within the control of the business, others aren’t. A combination of these internal and external factors makes up the marketing environment.
What is a Marketing Environment?
A marketing environment is a combination of internal and external factors affecting a business/company’s ability to build a relationship and serve its clients/customers.
Components Of The Marketing Environment
All marketing environments are made up of both internal and external components. Although the internal environment can be controlled, the same cannot be said for the external environment.
Internal Environment
A business’s internal environment combines all the factors and forces within the organisation that affect all operation areas. Components within the internal environment can be grouped under what is tagged ‘The Five Ms of Business’ which include:
- Men: Everyone in the organization including skilled and unskilled workers.
- Minutes: Refers to the time taken for business processes to be complete.
- Machinery: The equipment needed to facilitate and complete the processes.
- Materials: All factors of production needed in the production process.
- Money: Financial resources required to purchase equipment and pay employees.
Not only is the internal environment under the control of the business owner/marketer, but it can also be changed. These changes can occur with a change in the external environment.
External Environment
The eternal environment has to do with external forces and factors the business owner has very little or no control over. There are two types of external environment:
Micro Environment
Also known as the task environment, it comprises external forces directly related to the business. These factors include customers, suppliers, competitors, market intermediaries, and the general public.
Macro Environment
The macroenvironment is also known as the Broad environment. It consists of external forces and factors affecting the business sector as a whole but directly affecting the business.
The macro-environment is made up of :
- Demographic environment
- Physical environment
- Economic environment
- Technological environment
- Socio-cultural environment
- Political environment
Importance of Marketing Environment
It helps to understand Your Competitors
Every business circle has various players competing for the same spot. An understanding of your marketing environment will provide useful information about what advantages your competitors have over you.
Helps in the planning process
Understanding your internal and external environment is essential for planning. For these plans to succeed, you must become aware of everything your marketing environment entails – dynamism, future predictions, and the present situation of things.
Guards against threats
Being able to predict future changes will guard your business against unforeseen contingencies. Not just that, you also get to take advantage of opportunities as they come.
Understand your customers
The marketing environment will help you understand your customers’ needs and wants. With this, you’ll be able to provide top-notch customer services.
Tips To Help You Assess Your Marketing Environment
In carrying out an adequate assessment, a clear understanding of the following factors is essential:
1. Economic Factors
Economic factors combine all the economic determinants, and these determine the direction in which an economy moves. SMEs in Africa should analyse this factor as it will help set up possible strategies.
To assess how much the economic factor affects your business, consider the interest rate, inflation rate, unemployment rate, credit accessibility, foreign exchange rate, e.t.c.
2. Political Factors
An SME in Africa needs to prioritise the political environment when coming up with business strategies. The political environment includes assessing government policies, stability, and instability of the present political factors and the associated risks that come with it.
Some risks associated with the political factor include government takeover, unexpected ownership loss resulting from nationalisation, changes in labour law, e.t.c. Political instability has a great impact on a business and the profitable life span of such a business.
3. Socio-cultural factors
With this factor, you get to consider your current business environment and what it is made up of. Business owners need to understand the norms, customs, and values of the environment such business is situated.
To sell a market to a particular group of people, you have to understand their cultural characteristics. These characteristics include lifestyle, language, literacy, religion, orientation, e.t.c.
4. Legal Factors
The legal factor is centred around the laws and regulations governing the area you are assessing. These regulations and laws will influence your marketing and sales strategies as you’ll understand the policies that have been set up.
Some of these regulations might revolve around – health and safety, advertising regulation, product safety, employment law, e.t.c.
5. Technological Factors
The importance of technology to the business world cannot be overemphasized. Its improvement over the years has created diverse opportunities for businesses, companies, and organisations to promote and sell their products.
As an SME in Africa, take advantage of the internet in accessing information about the current trends and prices of products and services. Also, the internet has made it even easier to market your business using social media.
Conclusion
Carrying out a marketing assessment guards you against expanding into an area that is not suitable for your business. In return, this evaluation helps to prevent any loss that might occur along the line.
Different market areas have unique beliefs, behaviours, languages, e.t.c. guiding them. An understanding of these factors will help in your decision-making process.
