About the Marketing Environment
Today I am learning about the marketing environment. When marketing a product, a company has to consider both the immediate environment and the external environment. The immediate environment includes the people, groups, and companies that directly influence the business. These are the actors a company interacts with most directly: intermediaries, employees, shareholders, customers, competitors, and suppliers.
The external environment includes broader forces that affect not just the company, but also everyone in its immediate environment. These are things like economic conditions, technology, laws, cultural shifts, and natural forces. A company cannot control these factors, but they still have a major impact on how it operates and how consumers respond.
There is a handy mnemonic device for remembering the different types of external forces: PESTLE. It stands for Political, Economic, Social, Technological, Legal, and Environmental. This is probably not a complete list, but it covers a lot of the big-picture forces that companies need to monitor and understand.
Thinking about all the different actors involved reminded me of the Irish drinking song The Barley Mow. In the song, the singer wishes good luck to all the different cask sizes—quart pots, barrels, half-barrels—and to the people who helped get the drink into their hand: the landlord, landlady, brewer, and so on.
"Here’s good luck to the quart pot,
Good luck to the barley mow...
Half-gallon, gallon, half-barrel, barrel,
Landlord, landlady, daughter, dreyer,
Bookie, brewer, company..."
It is kind of the perfect metaphor for the marketing environment. Everyone along the way plays a role in getting a product from its origin to the consumer.
After learning about the marketing environment, we also started looking at how companies analyze and respond to it. This includes environmental scanning, which is the process of observing what is happening in the world around the business, spotting patterns and trends, interpreting what they mean, and using that information to make better decisions. It is not just about reacting. It is about predicting and preparing.
The basic steps of environmental scanning include observing, identifying trends, interpreting, predicting, analyzing, and strategizing. To support this process, businesses use tools like Google Alerts, The Economist Intelligence Unit, OECD reports, and government sources such as Census.gov and the Bureau of Economic Analysis to stay informed.
Once a company understands the environment it is working in, it can respond with strategies such as adaptation, innovation, strategic planning, and risk management. Success in marketing often depends on how well a company understands and adapts to change.
Up next, we are diving into SWOT analysis, which looks at a company’s Strengths, Weaknesses, Opportunities, and Threats.
