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Marketing Environments – Explained

Image displaying a typical marketing word environment to denote the environments in which marketing exists.
Marketing environments make up the factors and forces from within a brand and in wider society that affect marketing functions. Image Credit: Unsplash: Ant Rozetsky.

Marketing environments are fundamentally concerned with the factors and forces that affect an organisations functions and relationship with consumers and society. These factors and forces are both internal and external. The internal environment is concerned with the resources, structures and planning of the organisation itself. It can be usefully categorised and analysed as the Five M’s of Marketing: Manpower, Material, Machinery, Minutes and Money.  Throughout the sectional analysis that the Five M’s focuses, SWOT – Strength, weaknesses, opportunities and threat analysis is often deployed.

Image showing a occupied place of work to denote staff.
Staff can both be directly involved in marketing functions as well as affect them indirectly. Image Credit: Unsplash: Alex Kotliarskyi.

Five M’s of Marketing:

Manpower – Staff 

Manpower is simply the human resources required to perform marketing functions that stem from the organisation’s marketing strategy. Although, the organisations staffs who are or will be assigned to complete a task or the focus this is not exclusive. Part of this analysis is also the impacts on and productivity of those staff who aren’t directly engaged in a specific campaign related task. Fundamentally, this allows the organisations how to orientate their general operations to support and complement their core marketing functions.

Image showing a factory production line to denote production within a business.
The relationship between production and marketing is key for brands to effectively communicate their operational purpose. Image Credit: Unsplash: Carlos Aranda.

Material – Production 

This section of analysis is focused on the overall organisational operations and core supply chain which forms the organisations operational functions. It focuses on the manner in which suppliers and processes add value to their overall marketing strategy. This can be specific, with a focus on individual component value or more general considering collective output and its relationship with marketing strategy

Image showing a typical professional range of equipment and technology in an office setting.
Digital resources are increasingly core to businesses operations and in marketing functions. Image Credit: Unsplash: Annie Spratt.

Machinery – Equipment and Technology 

Fundamentally, these are assets which are directed for the delivery and implementation of an organisations marketing strategy, this has broadened significantly in recent years from physical assets to include digital resources. This ranges from basic marketing software to information infrastructure such as servers. The focus of this analysis is how effectively these range of mechanised resources are being used.

Image displaying a smartwatch to denote the concept of time.
The speed by which a business that produce products offerings or adapt and refocus is central to its marketing functions. Image Credit: Unsplash: Mitchell Hollander.

Minutes – Time 

This is an analytic focus review of the time allocation and focus marketing planning process, at an individual and organisation wide level. This considers the reactive speed of the organisation to develop and bring to market products or services. It also evaluates the timeliness of organisations ability to adapt to market forces and trends. 

Image showing a financial statement/analysis to denote the financial core of business.
The financial viability of marketing projects is central. Image Credit: Unsplash: William Iven.

Money – Finance

The fifth element of the 5 M’s of Marketing looks at the financial component of marketing functions and related budgetary matters.  This considers and evaluates the current strategic project’s return on investment and the financial success and viability of present and future strategic marketing activity.

Image depicting a cityscape to denote wider economic and societal forces and factors.
Implementing a successful marketing strategy requires a wide-ranging strategic framework, this is provided by a PESTLE Analysis. Image Credit: Unsplash: Justin Merced.

External Environment

Organisations operate in a fast paced and ever-changing world. External forces have a significant impact on the trading environment and society organisations operate within. This ranges from international trade issues to localised cultural sensitivities.  As such external factors and forces are things outside an organisation but have an impact on the organisation. This impact whether positive or negative needs to be planned for it is the reaction a business can rarely control the external factor or force itself. Implementing a successful marketing strategy requires a wide-ranging strategic framework, this is provided by a PESTLEE Analysis.

Image showing a downing street sign to denote political factors and forces.
An organisation must consider and plan for the ways and manner in which a government intervenes in the economy. Image Credit: Unsplash: Jordhan Madec.

Political Factors

An organisation must consider and plan for the ways and manner in which a government intervenes in an economy and its impact on organisations. This includes: Government spending, political stability, environmental regulations, trade polity, tariffs and taxation policy. The vast range of political and policy areas that impact on the way organisations operate make planning for any potential impact essential. Organisations need to possess an ability to adapt and change their operations, and crucially adapt their marketing policy and functions.

Image showing a screenshot of the FTSE 100 to denote economic factors.
Economic factors have a significant impact on how an organisation conducts its operations and their profitability. Image Credit: Unsplash: Jamie Street.

Economic Factors

Economic factors have a significant impact on how an organisation conducts its operations and their profitability. These factors can be usefully categorised into macro and micro-economic factors. Global, national and government level economic factors are macro while micro factors are focused on the factors that influence the way the consumer engages with organisations and their spending power. This is particularly relevant for business to consumers (B2C) centric organisations. Economic factors include: Interest rates, inflation, minimum wage level, unemployment figures, cost of living, and credit availability.

Image showing a group of people and a text reading 'community' to denote social factors.
Organisations must respond to society in order to stay relevant and keep consumers engaged. Image Credit: Unsplash: William White.

Social Factors

These factors are orientated around the culture norms and expectations of workers, consumers and society. They’re concerned with the attitudes of the population and their shared beliefs. These factors include age distribution, population growth, health consciousness and career attitudes. Organisations can use these factors to understand the consumer they serve and the climate in which they operate.

Image showing a credit board to denote technological factors on organisations.
Innovation and change means organisations need to understand technology will affect their operations to optimise their marketing functions. Image Credit: Unsplash: Alexandre Debiève.

Technological Factors

Ever-emerging technological innovation and change means organisations need to understand technology will affect their operations. Organisations try to understand the impact the way they market products. Technological factors affect the delivery of marketing and communication as well as the production and/or nature of products.

Image showing a stack of legal books to denote legal factors.
Organisations must adhere to general legal and advertising standards to maintain operational viability and longevity. Image Credit: Unsplash: Mikhail Pavstyuk.

Legal Factors

Organisations have to understand and adhere to laws in order to successfully function. This is particularly relevant to organisations that operate globally who have to adhere to multiple jurisdictions individually and often unique rules and regulations. Legal factors include – data protection, health and safety, equality legislation, consumer rights, advertising standards and product standards.

Image showing a solar farm to denote environmental factors.
Environmental issues have increasing societal and legal relevance. Image Credit: Unsplash: Zbynek Burival.

Environmental Factors

The twenty-first century has seen an intensified focus on environmental issues from government, business and society. Such issues have become increasingly relevant because of consumer environmental expectations, pollution targets, sustainability issues, governmental environmental regulation and the increasing scarcity of raw materials. Consumers and government are increasingly demanding organisations to maintain and project a high ethic and sustainable standard. As such organisations regulatory and society expectations in their overall operations and marketing functions are a central consideration.  

Image showing promotion of ethically sourced products to denote ethical forces and factors.
Ethical issues are that of legality, morality and humanity. Image Credit: Unsplash: Tim Foster.

Ethical Factors

The most recent addition this sectional analytic marketing environment framework is ethical factors. These are concerned with issues of morality and humanity in relations to organisational practises and consumer expectations. Issues such as fair trade, slavery and human trafficking and child labour laws, corporate social responsibility, animal rights and tax practices are considered.

Summary of Marketing Environments

Analysis of the internal environment focuses on accessing the capabilities and the constraints an organisation possesses. It fundamentally considers the organisations available resources and the necessary resources to achieve strategic objectives. While also considering internal departmental and resources weaknesses and/or barriers to success.

An organisation cannot assess its marketing strategy and function’s internal or external environment in isolation. The internal environment must be orientated to the external environment in order to fully implement a successful marketing strategy.  

Analysing the external marketing environment is central to facilitating successful organisational operations and functions, PESTLEE analysis provides a simple framework to achieve this. This simple strategic framework provides a holistic understanding of the business environment in a micro and macro sense. Engaging in this strategic analysis will also support and improve stakeholder’s ability to deploy strategic thinking and analysis in other areas that can be beneficial to the organisation.

At a basic level this enables an organisation to develop a self-awareness that is a building block for which to build, adapt and grow. Focusing not only on specific organisational strengths and weakness but threats that a globalised world provides is central to strong organisational planning. More than this, external analysis identifies opportunities and allows organisations to fully utilise them.

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