About Marketing Environment

Companies are surrounded by actors (people) and forces (dynamics of situations), that put pressure on both the micro-environment (factors affecting one specific company) and the macro-environment (factors affecting many companies).

The actors in the micro-environment are company groups, stakeholders, competitors, general public and customers, while in macro-environment the actors are the leaders in society, politics, economics, technology development, finance and law.

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The forces in the micro-environment are competitors, channel partners, changes in consumer behavior, while in macro-environment the forces are the trends in globalization, technology and media.

A very important part of marketing process is environmental scanning, a process used to understand competitors' moves. Environmental scanning provides a good understanding of potential changes in the environment and facilitates strategic thinking.

Social and cultural factors that affect consumer society derive from cultural values and demographic groups like age, education level, income level, marital status, occupation, religion, birth rate, death rate, family composition, and more.
People are living and working longer, therefore there are many more opportunities for companies to offer products and services to older people.

Another dominant demographic trend is the increasing proportion of the population from Hispanic, Asian, Black, and multiracial backgrounds.

The American household is varied, therefore marketers must focus on what people do (behavior data) and what people are (demographics).

The marketing strategy is influenced by developments in technology and ecology. There are many concerns on ecological issues and they are interpreted differently by different demographic groups. Some of these concerns are:

• increased pollution
• destruction of natural habitats for plants and animals
• climate change due to global warming

Technological and ecological concerns are interconnected, as resources needed for one affect the other. The use of raw materials in the manufacturing processes, or the disposal of technology can affect the natural environment. Marketers must design their strategies to target specific target concerns.

Marketers are also affected by economic trends and political/legal conditions that require compliance with all applicable laws. Economic conditions affect consumer purchasing. As economic environments vary greatly within regions, marketers track economic indicators to predict the consumer purchasing behavior.

Some economic factors are:

• inflation (rapid increase in prices that outpaces wages)
• deflation (falling prices and wages)
• and changes in income

Economic conditions affect how much consumers can purchase. The economic cycle stage (prosperity, recession, or recovery) affects consumer demand. Marketers' environmental scanning is using economic indicators to predict changes.

Regarding foreign markets, marketers must scan the culture, technology, ecology, economics, and political/legal factors specific to that part of the world, in order to understand the local environment. The growth in emerging economies like India and China has created great opportunities for marketers.

Hope you find this article useful, as I did some research to put all definitions together and make sense of marketing environment subject, which I had to study for my BA.