The marketing environment
The macro-environment
A commonly
used method of quantifying the macro external environment is with a PEST
analysis. PEST is an acronym which divides the macro-environment into four
areas – Political, Economic, Social, and Technological, examples of which are
explained below.
Political environmental factors
Trading
agreements
Tax rules
Employment
regulation
Environmental
legislation
Legal issues
Economic environmental factors
Recession
Interest rates
Exchange rates
Rate of
inflation
Population
wealth
Growth of the
housing market
Social environmental factors
'Green'
behaviour
Eating habits
Shifts in
attitude
Population
demographics
Attitudes to
career
Technological environmental factors
Emergence of
new communications channels
Improved
production processes
Advances in
computing and the internet
New
technologies such as electric vehicles
Automation
Reduced cost
of materials
Micro-environment
The
micro-environment includes factors which are still not directly under the
control of the company, but more directly relevant to strategy such as consumer
trends, stakeholders, suppliers and competitors. Some example items are listed
below.
Summary of
your market segment
Market growth,
trends and competition
Potential new
markets
Direction from
shareholders
Supplier costs
and service quality
Changes in
consumer behaviour
Understanding
your customers and market
Ensuring a
thorough knowledge of the consumer is vital for successful marketing planning.
Use the primary and secondary (first and second hand) market research
information at your disposal to describe your customer. As your understanding
of the audience improves, you'll be able to design products which cater for
their needs better, and you will be able to communicate with them more
directly. If you have a broad customer base, you might need to split your
customers into groups (segmentation). Some examples are shown below.
Typical
customer demographics
Customer
profile
Market size
Market
geography
Understanding
your competitors
Who are your
competitors?
What are they
likely to be doing?
Strengths
Weaknesses
Reputation and
brand equity
How are they
using the marketing mix?
Infrastructure
and supply chain
Product
strategy
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