Understanding Marketing Environment: Importance, Analysis and Strategies

This article discusses the importance of understanding marketing environment, analysis techniques and strategies to adopt to changing environment. It covers topics such as micro and macro environment, competition, PESTLE analysis, marketing plan and SWOT analysis. The article also provides examples of brands that have successfully adopted these strategies.

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Business Environment

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Introduction
A business venture cannot survive on a standalone basis. There are various factor within the
business’s environment that significantly impact the business. Marketing environment must be
identified, analyzed and improved in order to ensure continued business success. Businesses are
impacted by micro environment existing within the business as well as macro environment
outside the business (West et. al., 2015). A business has no control over its macro environment
but this environment continues to impact the business. Through this course, we gained a deep
insight about the importance of understanding business environment and the strategies that
businesses adopt in order to do the same.
Marketing environment
Every business has its own marketing environment that has an impact on the business. Efforts
must be put by the organizations to understand that environment and ensure a positive impact of
the same. For example a start-up based on Australia is impacted by the political, economic or
technological aspect of country. India recently abolished its previous tax system and introduced a
single GST (Goods and services tax). This move had a massive impact on all businesses across
various industries. The prices of almost every product were altered.

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Source: 1 India Today
Importance of environmental analysis
Understanding business environment is essential for the business to survive the competition that
exists and understand consumer needs better. Environment analysis is done by breaking the
market environment into smaller parts and gaining a deeper insight about the same (Proctor,
2014). The environment that the organization can directly control is the internal environment.
Internal environment analysis helps in understanding if the business stakeholders are satisfied
with the business and ensure their long term retention. Analysis of external environment helps in
identifying competitors and gaining a deeper insight about the changing needs and demands of
the target market (Ingram et. al., 2015). For example an Ecommerce retailer would have to
understand the products sold by other retailers like Amazon Inc., their target market and the
prices quoted by them. If this retailer expands its operations to the United States then an
environment analysis will be done to understand the needs and demands of customers in the US
as well as the legalities of the country to avoid discrepancies.

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Source: 2 Yout Tube
Competition
Marketing environment is predominantly done to identify, understand and counter competition.
Organizations must put efforts to gain a competitive advantage over other players within the
industry. This can include competing on the basis of price, product offerings, place or innovative
promotions (Scarborough, 2016). Competition is a critical part of any business environment.
Nokia is a perfect example of the impact of competition on a brand. Nokia dominated the mobile
telecommunication industry during the era of 1990s. It was continued innovation and extensive
customer relationships management that ensure customer loyalty towards the brand. However,
during the early 2000s, various competitors emerged in the industry and replaced the leading
position of Nokia. Samsung, Apple, Motorola and various other brands emerged as they
understood consumer needs better and offered the same. This made Nokia obsolete and the brand
has never been able to regain that dominant position yet. Understanding competition at the right
time and identifying strategies to combat is essential for any business to survive the industry.

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Source: 3 Statista
PESTLE analysis
PESTLE analysis is a strategic management tool that helps organizations in gaining a deeper
understanding about their macro environment. This tool helps businesses in analysing the
environment from a political, economic, social, technological, legal and environmental
perspective (Schaltegger & Wagner, 2017). This tool is beneficial because it entails all the
factors within the macro environment of a business that would have a significant impact. Such a
tool not just offers a clear picture of various factors impacting the environment but also allows
time to strategically device a future course of action.
Globalization has changed the shape of the world and has made it a flat place. Today there is free
movement and transfer of people, resources, businesses, information and technology from one
country to another (Steger, 2017). When a business expands to another country, a PESTLE
analysis comes handy in understanding the business environment of that country. There are
brands from different geographical countries that are merging with one another. Such decisions

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can only be made effectively after a thorough analysis of the macro environment existing in that
country.
Marketing plan
A marketing plan helps organizations in devising a future course of action. A marketing plan
combines the organizational objectives along with the situational analysis of the environment
(Paley, 2017). This plan helps businesses in taking steps towards accomplishing their desired
goals in an effective manner. Apple Inc. has launched 18 models of iPhone. The launch, release
date, price, place and promoting strategies for every iPhone are different and strategically
designed to ensure high level of customer attraction. Similarly, a marketing plan helps businesses
identify the best strategy for optimised profitability.
Source: 4 Decisions
SWOT
SWOT analysis is a strategic marketing tool that helps businesses understand their internal
environment in a better manner. SWOT refers to understanding the strengths, weaknesses,
opportunities and threats that surmount a business (Suh, 2014). Starbucks is a leading coffee
brand that has a presence across 75 countries around the globe. This has been possible because
Starbucks conducted a thorough SWOT analysis and identified appropriate opportunities for its

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expansion. This SWOT not only helped the brand identify optimistic locations for expansions but
also helped the brand in adopting effective strategies to leave a significant mark in every country
it has entered.
Conclusion
Marketing environment within which the business operates is crucial to the success of a business.
This includes understanding the environment as well as devising strategies to adopt to the
changing environment. Environmental analysis helps organizations in understanding changing
consumer needs and evaluating competition within the industry. Effective awareness of
environment helps businesses in responding to it in a manner that leads to long term sustenance
and success.
References
Ingram, T.N., LaForge, R.W., Williams, M.R. and Schwepker Jr, C.H., 2015. Sales management:
Analysis and decision making. Routledge. United Kingdom.
Paley, N., 2017. How to Develop a Strategic Marketing Plan: A step-by-step guide. Routledge.
United Kingdom.
Proctor, T., 2014. Strategic marketing: an introduction. Routledge. United Kingdom.
Scarborough, N.M., 2016. Essentials of entrepreneurship and small business management.
Pearson. India.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Steger, M.B., 2017. Globalization: A very short introduction(Vol. 86). Oxford University Press.
United States.
Suh, J., 2014. Theory and reality of integrated rice–duck farming in Asian developing countries:
A systematic review and SWOT analysis. Agricultural Systems, 125, pp.74-81.

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West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage.
Oxford University Press, USA.