Having a product or a service to offer in the market and enough source of funds are not guarantee to become successful in the market.There are many opportunities in the market but it’s needed to conduct a research to understand the business environment.
Analyzing the Market Environment
The market environment is very wide that requires you to make an effective marketing strategy before launching your product and service.
The marketing environment of a business consist primarily of two elements:
1. Internal Environment – This refers to the business itself.
• What you offer in the market
• Source of funds
• Organizational structure of the company
• Marketing strategies
Assessing the internal environment is a vital step to determine the company’s strength and weaknesses to perform better in the market.
2. External Environment – These are the different forces outside that affect the business which the marketer has little or no control. There are two types:
a. Micro Environment – This refers to immediate industry in which the company is doing business. This includes:
1. Suppliers – This party provides sources needed by the company. They have the capabilities to affect the company by demanding a higher price especially if the company is too dependent in their suppliers. They can also enter the market and be a competitor to the company.
2. Competitors – This is expected in a market environment. A company who offers the same kind of products and target the same market is a big threat to the company.
3. New Entrants – There will always be another entrant in the market that may offer better products or services and steal your market share.
4. Substitutes – Not all your potentials customers are qualified. There are some although interested but can’t afford the price of your products or services that results in finding alternatives and cheaper prices that other businesses offer.
5. Buyers – Demanding a cheaper price can be requested by buyers especially if the customers sense that the company greatly depend on them.
b. Macro Environment – This is also known as the broad environment. The external factors may affect the industry as a whole but don’t have direct effect in the business.
PEST Analysis
The PEST Analysis is the most common approach for considering the external business environment. PEST stands for political. economic, social and technological analysis.
Company must adapt to the changes in the society. This requires the company to develop or change existing marketing strategy for a better relationship between the company and other stakeholders.
POLITICS
There are some pieces of legislations that may affect the business. Most recent is President Duterte considering China Telecom to be one of the internet providers in our country which can greatly affect the businesses of the same market position.
ECONOMIC
Is the inflation rate increasing? Employment rate? Is the economy continuing to grow?
SOCIAL
Population as one major example. What are the interest of the biggest age bracket? How can you apply these data in your business? What are the different trends now in Filipino lifestyle? What products or services can you offer to this trend?
TECHNOLOGICAL
We can see many opportunities when it comes to technology. Adaptation with these advancements will surely bring added income and value to your company. How can you use technology in communicating with your target market? What are the different software can you develop to make it easier for your customer to access your products and services?
What is the importance of analyzing the Marketing Environment?
1. Planning
Analyzing your market environment is essential in making your road map. You can identify the kind of products your capable to offer and who will be your best target market.
2. Identifying Opportunities and Threat
It’s always a matter of competition in business, you can’t just stand and watch as other move their feet to steal your market share. Analyzing the market environment will help you to determine threats to your business ahead of time and also taking the opportunities available in the market for growth and expansion.
3. Understanding Customers
In my last post I mentioned there that marketing is communication. Providing valuable products to the customers is our major role. The more you understand your customer the more you know what products and services to offer.
There are many big opportunities in the market but most of us are afraid to try. Doing research and analysis on its environment will make us equipped on whatever threats ahead.
Thanks for reading!
Related topics:
https://steemit.com/steemitdiversify/@ishteldalosa/marketing-basic-concepts
References
https://www.feedough.com/marketing-environment/
http://smallbusiness.chron.com/microenvironment-marketing-22920.html
https://pdfs.semanticscholar.org/7fde/e2395679e8d930d3ebf601faa84313098af6.pdf