What Is a Marketing Environment?
A marketing environment is the sum total of the different components that make up a company’s marketing activities, encompassing all the elements that drive and impact that area of its operation. A company needs to be constantly in touch with its marketing environment, identifying potential opportunities—or challenges—in order to address them in a timely manner. Marketing environments are extensive, made up of a great many elements, some of which are more controllable than others, and all of which are subject to precipitous change. They include considerations such as advances in technology, industry regulations and buyer trends, as well as aspects connected to geographical and other demographic concerns. By staying on top of these factors, companies are better equipped to manage any threats or opportunities that might arise, while cultivating the ability to adapt in a rapidly advancing marketplace. This focused awareness enables marketing managers to make predictions based on prior performance, and to more finely tune future strategies.
As marketing specialist, Melina Miller, explains, “When a marketer can comprehend and break down the components of the digital environment, they can have much more control over the outcome of a campaign in the sense that they can tailor their campaigns to target their customers based on the factors that directly affect their decisions.” (https://melinakmiller.com). One such factor occurred during the COVID-19 pandemic, which asserted an unprecedented influence over nearly every aspect of the global economy. In response to this catastrophic event, companies had to initiate changes in order to adapt. These included changes in marketing communication strategies and in employee management, often necessitating a shift to innovative remote practices. The companies most successful during this unsettling time have been the ones whose grasp of their marketing environments allowed them the flexibility to adapt.
Macro and Micro Environments
There is general agreement among marketing specialists that the digital marketing environment can be broken down into two parts: the micro-environment, which directly affects the internal functioning of a specific company, and the macro-environment, which affects external factors common to all businesses. To succeed in today’s world, it is crucial for companies to cultivate a thorough knowledge of how these parts function. As marketing strategist, Donnicka Robert explains, “The digital environment of marketing can have a profound impact on businesses. It is possible to significantly influence the customer journey and the environment surrounding this path. To leverage the digital space, affect, create, and retain strong customer relationships, digital marketing providers must therefore have a solid understanding of the micro and macro environment components.” (https://brandzers.com).
The micro-environment can also be referred to as the operating environment. Its main areas of focus within a company involve considerations concerning customers, employees, competitors, the media, shareholders and suppliers. The micro-environment relates to the particular areas of a company’s operations directly impacting the day-to-day proceedings that enable a company to conduct its business effectively. Its spectrum of concerns ranges from societal interactions to resource allocation, with a number of steps in between, all of which contribute to the company’s goal of making a profit while offering value and quality to its customers. The macro-environment, also referred to as the remote environment, consists of factors external to specific companies, and describes how businesses operate, perform and make decisions as group entities. Macro-environmental issues go beyond the scope of what a single company can control, including economic factors, social and political factors, technological developments, legal aspects and environment forces. Another facet of the macro-environment can be found in the proliferation of opinions via social media platforms, by which points of view are instantly generated and communicated over global networks.
Analyzing Demand in Digital Marketing
It can be said that a company’s marketing is only as effective as its ability to analyze demand across digital channels. Historically, dating back to the earliest forms of marketing in human society, the concept of demand has been at the center of the equation. Marketing strategist, Kimberly Adadeo, offers this reminder: “Demand drives economic growth. Businesses want to increase demand so that they can improve profits. Governments and central banks boost demand to end recessions. They slow it during the expansion phase of the business cycle to combat inflation. If you offer any paid services, then you are trying to raise demand for them.” (https://www.the balance.com). With this in mind, marketers need to evaluate consumer demand by examining internet trends, especially when it comes to social media, since they exert such a strong influence on buying practices. This type of examination is best achieved by means of demand analysis research, which allows a company to identify the areas of its business reflecting the highest demand. Such an analysis can also determine how consumers are using its online services, and how they feel about them.
The first step in demand analysis is to identify the market and target audience, often by means of customer surveys that assess degrees of satisfaction. The next step involves an evaluation of a company’s business cycle, through three consecutive segments: the emerging stage, characterized by high demand and low supply, the plateau stage, where the supply of products meet the demand for them, and the declining stage, in which the demand begins to drop. After this is done, a company can strive to tailor its products to fit specific niches within the market, distinguishing them from those of its competitors. This also entails developing products that are designed to satisfy buyers’ needs and desires. Finally, a company must take a long and hard look at its competitors. This step is instrumental in determining the level of demand for products, and the relative probability of success in supplying them. The insights derived from demand analysis tools can positively influence decisions made in sales forecasting, in setting prices, in budgeting marketing expenses, as well as in all manner of other financial and production-oriented areas.
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OTIS KOPP
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