Marketing Environment
According the book:
The marketing environment consists of the task environment and the broad environment.
The task environment includes the actors engaged in producing, distributing, and promoting the offering. These are the company, suppliers, distributors, dealers, and target customers. In the supplier group are material suppliers and service suppliers, such as marketing research agencies, advertising agencies, banking and insurance companies, transportation companies, and telecommunications companies. Distributors and dealers include agents, brokers, manufacturer representatives, and others who facilitate finding and selling to customers.
The broad environment consists of six components:
- Demographic environment,
- Economic environment,
- Social-cultural environment,
- Technological environment,
- Ecological environment,
- Political-legal environment.
Marketers must pay close attention to the trends and developments in these and adjust their marketing strategies as needed.
In-depth explanation:
Your company is not operating in a vacuum. External and internal dependencies within and without your control have an impact on the success of your business.
In essence, there are three environments you have to consider when creating your marketing plan. On each of the environments you have more or less control and influence.
As shown below there are three dependencies:
- Internal,
- Micro
- and Macro.
Internal environment
It is inside your organization.
The degree of control you have is HIGH
The degree of influence you have is HIGH
Micro environment
You have economical relationship with them.
The degree of control is MEDIUM
The degree of Influence is MEDIUM
Macro environment
It is far outside your organization.
The degree of control is LOW
The degree of influence is LOW
Case:
You are the CEO of the Hilton Hotel Amsterdam.
How much influence and control do you have on the internal operation?
- Are you able to make changes in the services of the hotel?
- Are you able to hire and fire employees?
How much influence and control do you have on your micro environment e.g. business partners, like the hired cleaning company and the supplier of your food&beverages. Or how much influence or control do you have on your competitors?
- To what extent do you influence the delivery time and the pricing of the services and products supplied to your organization?
- How much control do you have over the working method of your supplier?
- How much influence doe you have on the pricing and offerings of your competitor?
And at last: How much control or influence do you have on your businesses macro environment?
- Are you able to change laws and regulations?
- How much impact has your organization on the demographics like aging in your country?
Purpose of internal, micro and mesa analyses
Mapping internal, micro, and macro threats and opportunities ensure that you can make well-considered choices in your task environment. It offers you the possibility to work proactively and improve the success of your business.
Macro environment
The broad environment is out of your control or influence. However it can have major impact on your business.
Take the Covid-19 crisis. The economy is changing by the lock-downs and the 1.5m law.
Another example is the aging population. Your hotel will have more active elderly people who expect more convenience and are willing to pay for it.
Technological changes can turn your business upside down. Newspaper and magazine publishers have had to firmly adjust their business model due to the internet’s.
The abbreviation DESTEP is a mnemonic for mapping the macro environment.
Summary:Market Environment
Keep in mind that your business has dependencies on three environments. Internal, Micro and Macro. On each of them you have more or less influence or control.
With the mnemonic DESTEP you are able to map the most important macro envirenment forces.
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