All businesses work in the same environment, which is connected by numerous global forces. Some of them have a direct impact on an organization’s activities, others are passively affected, but all of them have to be considered for marketing to be successful. The aspects of business-customer relations are diverse both in quantity and quality. Understanding which layers the global marketing environment incorporates is essential in ascertaining the importance of their consideration for global marketers.
Definition of Global Marketing Environment
The global marketing environment is the multitude of factors and forces which affect customer relationships. The goal of any business is interaction with clients who require the goods or services produced by an organization. For customer relations to be successful, several factors have to be favorable. The forces that influence business decisions are multivariate and depend on the size of an organization, as well as the target audience.
The larger the scope of a business is the more external factors influence it. If a company does not extend its operations beyond a certain area, then all focus is placed on the local environment. Similarly, a multinational corporation has to consider global issues because they have an immediate effect on the organization. In both cases, the forces, which compel companies to pursue a particular course of action with customers, constitute the marketing environment.
The first layer of marketing environment factors is the internal one. It comprises aspects that are directly controlled by the organization. Management can change, alter, or eliminate them if they deem it necessary. The main characteristic of these aspects is that they are not shaped by outside forces or influences. All decisions are made from within the business; thus, the layer is named internal.
The variables of the internal layer include strategy, structure, processes, and resources. The strategy is the overall plan of how a business approaches its customers. The chosen direction determines the structure that is necessary for promoting products. The processes incorporate the actual steps taken to reach customers. Finally, any initiative relies on resources at the organization’s disposal. All these variables are controlled by management without any influence from outside forces.
The external layer is the most multifaceted because it incorporates a broad range of outside forces impacting the business’ marketing activities. The layer is divided into two sublayers – macro and micro. The microenvironment represents variables that can be influenced by an organization that does not control them. For instance, suppliers, distributors, customers, competitors, and other stakeholders are all relevant in marketing decision-making. Business managers can affect them, but they exist regardless of the organization’s input.
The opposite is true in regards to the macro environment, which is entirely independent of the organization’s actions[UU1]. Nevertheless, all these factors should be considered by marketers because they determine the context within which the business functions. For example, the existing political system may prohibit some actions and allow others, thus forcing the company to adjust its marketing accordingly. In the same manner, both domestic and international laws determine the legal restrictions concerning marketing endeavors.
Among other macro-environmental variables are the economic aspects surrounding the region in which a company operates. They include the degree of planning in the economy, specifics of trade rules, and relations between the business’ country and those that host the organization’s affiliates. One more important variable is socio-cultural differences as some marketing practices may be seen as inappropriate and prohibited in other nations. Technological advancement should also be considered since business activities involving customers can be hinged by the lack of sufficient equipment in a hosting country. Overall, all macro and micro-environmental factors constitute the external layer, which is largely uncontrolled by the management of the organization.
Global Social Issues
The final layer consists of factors that influence the world at large. It is a natural continuation of the external layer in terms of the organization’s input. The difference is that micro and macro variables are specific to a region within which the business operates. Global issues are relevant irrespective of the geographical location of the organization. Their impact may be passive, but it is felt throughout society.
Global variables include climate change, ethics, migration, and other forces which extend beyond a single region or a group of people. For instance, global warming forces governments to adopt environmentally friendly policies. In their turn, such regulations oblige companies to follow specific standards, which are subsequently relayed through corporate marketing. Similarly, migration causes ethnic diversity to rise. Companies have to correct their promotional materials to cater to minorities and foreigners in the targeted area.
The aforementioned issues are widely known because of extensive media coverage. It also means that marketing heavily relies on global problems to promote products, raise the corporate image, and attract customer interest. The more globalized a company is, the more directly worldwide issues impact such business. As enterprises become more powerful, the expectation of their global awareness also rises. Firms are supposed to function concerning their corporate social responsibility and take steps to resolve worldwide problems.
Importance of Marketing Variables
All layers of the global marketing environment are involved in the competition between businesses. Organizations have to understand that all variables give marketing advantages and disadvantages. Some factors may increase the risk of failure, whereas others can set the groundwork for success. Marketing is built on small details, which vary from region to region and from customer to customer. The ability to recognize the environment and decide what the correct course of action will be is the distinguishing trait of an efficient marketer.
In practice, by evaluating the variables, enterprisers can assess the risk of working with customers. Based on the analysis, management devises a business strategy, which may be flawed if variables are interpreted incorrectly. At the same time, a sensible assessment of variables will help the organization save time and resources, which would be lost without the analysis of the marketing environment. Therefore, evaluation of variables is essential in conducting business and should be approached with respective attention and thoroughness.
Altogether, it should be evident that the complexity of the global marketing environment is justified by the abundance of variables that influence marketing decisions. Each layer has factors that should be considered by marketers. The more global the scope of the variables is, the less control over them management has. The internal layer consists of factors, which are managed from within the organization, the external layer has more independent regional forces, and global issues influence the entire society. All variables are crucial because they reduce the business’ risk of marketing failure.