IGNOU : M.COM : MCO 6 : UNIT 2 : Q - 2. How do environmental factors affect marketing policies and strategies ?

Ans. You have studied that the marketing environment of a company comprises a variety of forces. Most of these forces are external to the company and may not be controllable by the marketing executives of the company. So the marketing system of the company has to operate within the framework of these ever changing environmental forces. This uncertain marketing environment offers both opportunities, and shocks and threats. Therefore, it is necessary for a company to scan the changing environment continuously, and change the marketing mix strategies in accordance with the trends and developments in the marketing environment.

The company responds to these environmental factors and forces by its policies depending on its own capabilities particularly the finance, sales force and technical facilities. Among all these environmental factors, some of them may be controllable by the organization to some extent, and others may be uncontrollable. Macro environmental factors are totally uncontrollable by the firm whereas micro environmental factors may be controlled to some extent. For instance, organization's internal environment can be controlled by the firm to a large extent. Similarly, the firm can exert some influence on suppliers, dealers and distributors by offering liberal terms. And through its advertising effort, a firm can influence the perspective and present consumers.

Each aspect of the environment has some relevance in marketing. It is easy to imagine how various environmental factors affect the demand and supply, the distribution and promotional policies, etc. For example, with the oil crisis there will be demand for more oil efficient machines. Similarly, the popularity of computers will create demand for more computer operators, voltage stabilizers, etc.

The following benefits of environment scanning have been suggested by various authorities -

• It creates an increased general awareness of environmental changes on the part of management. 
• It guides with greater effectiveness in matters relating to Government. 
• It helps in marketing analysis. 
• It suggests improvements in diversification and resource allocations. 
•  It helps firms to identify and capitalize upon opportunities rather than losing out to competitors.
• It provides a base of 'objective qualitative information' about the business environment that can subsequently be of value of designing the strategies.
• It provides a continuing broad-based education for executives in general, and the strategists in particular.