The Marketing Environment

Successful marketing planning depends on a clear understanding of the environment. Companies and organisations operate in the macro and micro environments. The understanding of these 'environments’ is essential in the overall appreciation of how marketing operates within our contemporary and dynamic world. A critical issue is that these environments are not static. They are in a constant state of fluidity.

The fluidity of these environments illustrates one of the dilemmas facing companies (both nationally and globally) nowadays. A company must realise and be able to monitor environments in the attempt to be both proactive and reactive to changing conditions. Otherwise, it may face either a reduced market share, or at the worst total extinction. Such marketplace dynamics are not new. As an example, the British shipbuilding industry, proud builders of mighty passenger and battleships during the first half of the 20th century, was virtually extinct by the 1970s. It had failed to analyse the changing dynamics of shipbuilding management and the emergence and consolidation of highly skilled European and Fàr Eastern shipyards. While the United Kingdom maintains a pre-eminence in luxury powerboats, it is unlikely to ever see the resurgence of the heavy shipbuilding industry.

Business and marketing activities are influenced and controlled by a combination of external and internal factors. These are referred to as the macro and microenvironments. The macro environmental factors feed into the micro environmental factors. However, it is necessary to note that the micro environment also feeds back into the macro environment. For example, both employees and major companies have the power (especially through lobbying and the ballot box) of 'influencing' government activities to a greater or lesser extent. However, in other areas such as extreme weather conditions, micro environmental influences currently have very little or no power to control extreme weather conditions.