Marketing Environment

All firms, whether they recognize or not, have a marketing policy and is dealing all the time with a whole series of variables:
1. National economy. Boom or recession, growth or stagnation, a developed or an under-developed economy, will have a huge impact on what is possible and on how marketing can operate;
2. Customer needs. The level of development of a society as well as the social climate will affect the needs customers feel to be important;
3. Competition. What competitors are doing will significantly affect what is possible;
4. Technology. The introduction of a new technology like new plastics, electronics or information technology, will completely transform the existing situation;
5. Legislation. Governments are always intervening in the mechanisms of the market place and changing the commercial environment in many ways and the impact of government interventions are not necessarily positive for the business community.

These are just the most important factors and many unmentioned other will all change constantly, both independently of each other and in reaction to each other. Collectively, they have a domino effect; if one factor changes, the others will also change causing constant changes of the total marketing environment. Going on with doing the things always done will sooner or later lead to a situation where yesterday’s answers will be applied to today’s problems, and disaster will most certainly follow.

Companies must be aware of these changes and react to them. Marketing is concerned with what people will do tomorrow; it is always risky and uncertain. Risk means that we know that certain actions may have a number of different outcomes. It is imperative to calculate the odds in favor of the outcome desired. Uncertainty, in turn, reflects the other areas which are simply unknown. There can never be total knowledge about the future. However, make sure that the present situation is known and where trends appear to be leading. Information is an extremely valuable commodity in all business activity, but more so in marketing.

The factors listed here are often called the ‘non-controllable variables.’ Companies and individuals cannot control them, but still have to design their marketing plans. It is the marketing mix which actually contains the controllable variables which can be changed to provide the appropriate response.