What are the key environmental factors to be considered when entering a new market?

There are two elements within the external marketing environment; micro and macro. These environmental factors are beyond the control of marketers but they still influence the decisions made when creating a strategic marketing plan.

Micro Environment Factors

• Suppliers: Suppliers can control the success of the business when they hold power. The supplier holds the power when they are the only or the largest supplier of their goods; the buyer is not vital to the supplier’s business; the supplier’s product is a core part of the buyer’s finished product and/or business.

• Resellers: If the product the organisation produces is taken to market by 3rd party resellers or market intermediaries such as retailers, wholesalers, etc. then the marketing success is impacted by those 3rd party resellers. For example, if a retail seller is a reputable name then this reputation can be leveraged in the marketing of the product.

• Customers: Who the customers are (B2B or B2C, local or international, etc.) and their reasons for buying the product will play a large role in how you approach the marketing of your products and services to them.

• The competition: Those who sell the same or similar products and services as your organisation is your market competition, and the way they sell needs to be taken into account. How do their prices and product differentiation impact you? How can you leverage this to reap better results and get ahead of them?

• The general public: Your organisation has a duty to satisfy the public. Any actions of your company must be considered from the angle of the general public and how they are affected. The public has the power to help you reach your goals; just as they can also prevent you from achieving them.

Macro Environment Factors

• Demographic forces: Different market segments are typically impacted by common demographic forces, including country/region; age; ethnicity; education level; household lifestyle; cultural characteristics and movements.

• Economic factors: The economic environment can impact both the organisation’s production and the consumer’s decision-making process.

• Natural/physical forces: The Earth’s renewal of its natural resources such as forests, agricultural products, marine products, etc must be taken into account. There are also natural non-renewable resources such as oil, coal, minerals, etc that may also impact the organisation’s production.

• Technological factors: The skills and knowledge applied to the production, and the technology and materials needed for the production of products and services can also impact the smooth running of the business and must be considered.

• Political and legal forces: Sound marketing decisions should always take into account political and/or legal developments relating to the organisation and its markets.

• Social and cultural forces: The impact the products and services your organisations brings to market have on society must be considered. Any elements of the production process or any products/services that are harmful to society should be eliminated to show your organisation is taking social responsibility. A recent example of this is the environment and how many sectors are being forced to review their products and services in order to become more environmentally friendly.

Wrap Up

Micro and macro environments have a significant impact on the success of marketing activities, and therefore such environmental factors must be considered in-depth during the process of creating a strategic marketing plan. Considering these factors will improve the success of your organisation’s marketing campaign and the reputation of the brand in the long term.

If you are interested in learning more about micro and macro environments, and strategic marketing as a whole, then you may be interested in the CIM Diploma in Professional Marketing. The marketing course is ideal for individuals looking to build practical skills in marketing management and broaden their strategic perspective. For more information about studying with Oxford College of Marketing, call our team today on (0)1865 515 255 or email .

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