Businesses are constantly faced with changes in the market controlled by various external forces. These changes can be viewed as a threat or an opportunity depending on how the company responds. If a business can anticipate changes in the market, they could find themselves in prime position to flourish. Conversely, companies that fail to respond appropriately can lose significant market share, or cease to exist. Environmental forces that can impact a marketing strategy are social, economic, technical, competitive and regulatory (Kotler, Keller, 2012)
Social factors can influence the marketing strategy by defining who the target audience is. Social forces include demographics and generational groups. A person’s age, gender, social status, and race can determine how the marketing message is crafted and what their buying patterns are (Kotler, Keller, 2012)
The local, national and global economies can also affect a business’s ability to sell products. When the economy is thriving, people have more discretionary income and sales are up. Businesses that sell necessities are less impacted by recessions, but an evaluation of the product line and price point may need to be considered (Morello, n.d.). There are two aspects of economic forces: the cost of doing business and the consumer’s household income.
Technological forces can have a major impact on a company. An advancement in technology can happen quickly and can drastically alter the demand for a company’s product or service (Morello, n.d.).
The competition can affect the overall marketing strategy. Competitive forces include the buyers and suppliers bargaining power, threats of new entrants, and competition among existing companies.
Changes in laws by the government are considered regulatory forces. If new taxes are imposed on an industry, it can affect the bottom line and cause a reduction in marketing efforts. Restrictions on purchases may alter the way a customer shops for a brand. Laws that govern consumer age limits or licensing can hinder selling opportunities (Morello, n.d.).
These five factors must be continuously revisited to ensure that potential threats are avoided and opportunities can be capitalized on.
Kotler, P., & Keller, K. (2012). Marketing Management, 14/e for Herzing University. Retrieved from https://online.vitalsource.com/#/books/9781256913566/
Morello, R. (n.d.). What Are Environmental Factors That Affect Marketing Decisions? Retrieved from http://yourbusiness.azcentral.com/environmental-factors-affect-marketing-decisions-22203.html