The marketing environment is dynamic it is always changing. Whether the forces of the marketing environment fluctuate slowly or rapidly, they create uncertainty, obstacles, and opportunities. Marketers must constantly monitor the marketing environment to be prepared to capitalize on opportunities and minimize adverse conditions. To monitor changes in the marketing environment effectively, marketing managers must engage in environmental scanning and analysis.
Environmental analysis is the process of assessing and interpreting the information gathered through environmental scanning. A manager reviews the information for accuracy, ties to reconcile inconsistencies in the data, and interprets the findings. Analysis allows a marketing manager to discern changes in the environment and, if possible, or predict future changes. By evaluating these changes, a marketing manager should be able to determine possible threats and opportunities associated with environmental fluctuations. Knowledge of current and predicted environmental changes aids a marketing manager in assessing the performance of current marketing efforts and in developing marketing strategies for the future.
Approaches for Responding to Environmental Forces
In responding to environmental forces, marketers use one of two general approaches. In the first approach, marketing managers view the forces of the marketing environment as uncontrollable. According to this traditional approach, an organization can do little to alter the influence of the taking this reactive approach tries to prepare itself to respond quickly to changes in the environment. For example, although an organization has little power to alter economic conditions new regulations, or the actions of competitors, it can monitor the environment closely and adjust its marketing strategy to counter the effects of inflation, a new product safety law, or product improvements by competitors.
A second response to the marketing environment is to take a proactive, or aggressive, stance toward environmental forces. A growing number of marketing professionals argue that the forces of the marketing environment can be controlled, at least to some extent. They believe that marketing itself represents a significant force that can be used to create change and extend its influence over the environment. Through lobbying, legal action, advertising of key issues, and public relations, organizations can alter some environmental forces. For instance, a firm can control its competitive environment by using aggressive pricing or competitive advertising strategies to influence the decisions of rival firms. It can lobby political officials to repeal legislation that it believes will restrict its business. Likewise, a firm can use political skills and public relations activities to open foreign marketer to domestic business. Neither response to environmental forces is superior. For some organizations, the reactive approach is more appropriate; for other firms, the proactive approach leads to better performance. The selection of a particular approach is determined by an organizations managerial philosophies, objectives, financial resources, markets and human skills, and by the composition of the set of environmental forces within which the organisation operates.