5.1 Introduction
In this module, we look at one element that is vitally important and yet often overlooked: the marketing environment. This can involve a number of key and rather interesting ideas and it makes sense that anybody seeking to make their mark in their particular market does so only after they know what it is that they are competing against and what is expected of them by their customers.
5.2 What We Mean by the Marketing Environment
In basic terms, the marketing environment is in itself a marketing term coined to describe the micro and macro factors that have a direct impact on the ability for a marketing strategy or plan to be as effective as it should be. There are various aspects that will make a difference to the results that you will be able to achieve with your marketing. Understanding these influencing factors will make it easier for you to take them into account in advance, so that it lessens the potential impact that they have on your ability to reach your desired goals.
In most instances, it specifically refers to the ability of a company to maintain a successful relationship with their customers by various means, as building that relationship is extremely important for the long term success of the company in question. The marketing environment will often be linked to both the micro and macro environment and having an understanding of what both of these are will play a key role in your ability to predict the future and recognise areas where your marketing may struggle, and then counteract them before anything negative is able to happen.
The macro
Generally speaking, the macro factors are those outside your control and yet they still have a major impact on your ability to market yourself to the correct people. For example, macro factors would include social and economic changes and possibly changes in the law that could have an impact on your services or products. In short, the macro environment refers to changes that can occur but yet are not something for which you are personally responsible. Therefore, you need to be able to make the appropriate changes.
The micro
If macro is linked to outside influences that you cannot control, then it stands to reason that the micro factors are slightly closer to home. This often relates to issues such as your employees, your competition, or changes with your suppliers, customers or client dynamics; indeed anything related to the actual running of your business that will have an impact on the potential relationship with your customers.
However, when we refer to the marketing environment, there is something else to consider and that is the context within which your marketing plan and business are going to be operating. It is accepted that there are several environmental contexts to which you can belong to and, of course, it makes sense that you are able to belong to several at any given time.
*Businesses
*Consumers
*Employees
*Government
Of course, each individual context will have sub-groups but just being aware of the circles in which you are moving can help you better understand how to market your business. For example, B2B (Business to Business) requires different forms of marketing compared to that generally required between B2C (Business to Consumer). That is due to different needs or wants and the subtle differences in how you market your products, services, and often even your price.
In other words, the marketing environment is all about understanding your placement in the market as well as the various forces that can have a direct impact on your ability to market your business in an effective and efficient manner.
5.3 Understanding Your Competitors
As we have already looked at the link between the marketing environment and being able to understand your competitors, it will make it easier for you to move forward with your marketing strategy. It is important to realise that your competition is an external factor which may potentially hinder the relationship that you have with your customers, and that is something that has to be overcome with your strategy.
For example
If you look at a business that sells the same products and is targeting the same market, then it is important that you are aware of what they are doing with their marketing and the price for the products or services that they are providing. This will allow you to look at your own business and determine if you are pricing things at the correct level. If you see a business struggling, then it may be that they are doing something wrong in terms of their products or services, or setting the wrong price point. However, there are a number of other important points to be discussed regarding marketing and your competitors.
What are they doing?
When we say that you should be aware of what they are doing with their marketing, it does not mean that you should replicate their methods and techniques. Instead, you should do this in order to perhaps get some inspiration or to even learn from their mistakes. Look at what is going on, see the difference it is making to their business and then take your own plan and make it unique to your business or products.
Are they successful?
Being aware of whether or not a competitor is successful with regards to their marketing is something that will prove useful to any marketer for a business. This is not about trying to be 'bigger and better' than them, but seeing what is working within a particular market or industry and then determining how you can apply it to your own approach. If you are aware of a failing marketing strategy, then why use that same method, in order to reach the same people in the same market? Learning from the competition should be seen as a very elemental thing to do.
Can you determine their goals?
Even though goals are unique to each business or marketing plan, there is no doubt that you can often ascertain what they are aiming to do and, from this, you can begin to glean whether or not they are being successful in their approach.
The reason this is possible is because you will be focusing on the same people. But as such why would you want to make life harder for yourself by trying to focus on the exact same goals as your competitor? It is better and easier for you to change things, for by doing so you will alter your own approach to marketing which will force you into creating a different strategy that may pay dividends In other words, understanding your competitors is key to your market research since they influence your ability to either be a success in your business or potentially fail. By looking at what they are doing, you will be able to have a better grasp of your marketing environment which should shape your entire marketing strategy, relevant to the information that you uncover during your research. Ignore your competitors and you are in effect ignoring a substantial part of your own business.
5.4 How to Place Yourself Within the Correct Environment
Now that you have a better idea of the basics of the marketing environment, we will now look at how to go about placing yourself in the correct location. Here market research is key and failing to conduct any research prior to either launching a business or creating a marketing strategy would be a big mistake. Researching your market leads to you correctly identify the people on whom you have to focus your attention simply because it allows you to shape your methods and techniques, in order to get the best possible return on your investment thanks to your marketing.
Failure to do this will cause costly mistakes as your marketing will not include information deemed as being relevant to those individuals whom you hope to convert to customers. So how do you place yourself in the correct environment? The answer to that is a simpler than you think.
Understand every aspect of your business.
How can you correctly market your business or understand your own particular marketing environment if you do not fully understand every aspect of your business? It is not sufficient to just say that you are aiming for a specific market, if that market is widespread and does not deal with any specifics.
Research, research and research.
This is something that cannot be stressed enough but market research is vital. It is therefore easy to understand why some companies prefer to use people that are experts in this field, rather than trying to work out on their own how the market stands. Research will inform about the demographics, the economics and the most important thing of all: if there is actually a market out there that can eventually lead to you having a sustainable business.
Test the waters.
If there is any uncertainty as to the decisions that you are making, it is reasonable that you look to gently test the waters, in a way that will not prove negative for your business or products. Put out some feelers, see if anything comes to fruition and then begin to develop your strategy from thereon in. If you get nothing back or receive a negative response, at least you have identified that you are not quite in the correct environment and thus it is easy to change things accordingly.
When it comes to dealing with the marketing environment it is advisable to double check everything, never rush into making decisions and do not launch yourself wholeheartedly into a situation until you have some indication as to whether or not it will prove to be a viable solution. For some, this may sound like a long winded way of doing things but marketing is all about finding the perfect solution for your particular needs and, when you consider what is at stake, it stands to reason that you should take all of the necessary safety precautions to protect yourself at all times.
5.5 Key Mistakes to Avoid Making from the Outset
Placing yourself in the correct environment is clearly important; however, one thing that is even more important is making sure that you avoid certain key mistakes from the outset because this will have a major negative impact on your ability to get the best results from your marketing exploits. Don't just look at other businesses to get your answers.
It may be tempting to look at those companies deemed to be your competitors and use them as inspiration for you to better understand the marketing environment, but that in itself is a mistake. This is because the environment and external factors that can impact your marketing and business will be unique to you. It is important to remember that only your business has your goals and, even though your competitor may be moving in the same marketing circles, they will have different goals driving them forward on a day to day basis.
Never be blind to other markets.
Often a company will primarily deal with one marketing context, but there is no reason for you to be blind to other opportunities from time to time. For example, if you focus on B2B (Business to Business), why ignore B2C (Business to Consumer)? Being blind to other potential markets shows that your focus is far too narrow-minded, which is never a good thing when it comes to the potential for a successful marketing plan. We agree that there has to be a main focus in terms of where you believe most of your customers will come from but it makes poor marketing sense to completely ignore every other possibility.
Never believe that money is the answer to everything.
If you realise that you are in the wrong environment, do not believe that throwing money at the situation is going to resolve matters. This will never be the case and you will only make things worse; which will be difficult to rectify later. Instead, this is a situation whereby you are best to 'cut your losses' at that moment in time, accept your mistakes and start again in the correct marketing environment.
Mistakes happen but it is how you handle them that is important. With this in mind, placing yourself in the correct environment is key because it will determine the potential future success of your entire business - never rush into it.
FACT
40% of salespeople still use informal means such as Microsoft Excel or Outlook to store its lead and customer data
Source: hubspot.com
5.6 How to Put All of the Information into a Marketing Strategy
Apart from understanding the marketing environment in which you find yourself, you need to be able to take the information that you have gleaned and incorporate it into your very own marketing strategy. In doing so, you will be in a far superior position to enable you to take full advantage of being put in front of the correct people and, of course, to thus see a boost in the turnover of your business. We have stressed the importance of your research and throughout your study of the marketing environment it is important that you take notes to put to use later on in your marketing strategy. To do this, you should consider the following points.
It is never a bad thing to have too many notes.
If you find that you have a lot of notes, do not worry. However, the key is to work through the notes to identify the most pertinent points and to only include those within your strategy. A failure to have notes on your research is a failure in your entire approach and will mean that you are unable to identify your market.
Organize Things in Advance.
As you work through the notes that you have taken regarding your business and marketing strategy you need to be organized or chaos will ensue. You cannot hope to have a quality strategy without strong organization. Your research will generate all kinds of details and you never initially know what will be 'the gem' that could make all the difference. Look at the details; think about them; step back for a moment then see how they are capable of producing something that will be viable. These are the two main things to which you need to pay attention when you are looking at what you have ascertained about the marketing environment for incorporating it into your strategy.
MODULE SUMMARY
In this module, we have looked at the concept of the marketing environment and how to include this in your plans for your own business. It may not be easy to do so for those that are new to marketing but, at the same time, it does make a difference to the potential success of whatever it is that you are marketing. In the next module, we will discuss the different forms of marketing that you may have to consider using, in order to increase your chances of becoming a success.
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