Market is never same. It keeps on changing from time to time, place to place. This change is either due to marketing shifts or due to change in any other factor that drives and has the potential to create change in the marketing environment. Market is not static but is a constant flux. Although companies do thorough marketing analysis and marketing strategies, still the change in marketing environment is never predictable. Most of the time this change invites many challenges to the companies. The global market experienced a significant change in the last two decades. The market experts gave many reasons for this change such as S&D environment, rise in expectations, technical innovations, globalization, service marketing, micromarkets etc. As we see, the present marketing situations are more challenging and rapidly moving. The change can be both beneficial and a risk for the businesses. So it is important to monitor and measure the market changes with innovative approaches in order to embrace their dynamic and unpredictable nature.
Change in Marketing Environment
A business planning to cope up with the change in the marketing environment needs a futuristic approach to deal with the possible negative outcomes. As the change is not predictable, so is the nature of the change. Businesses must be careful while planning business strategies for market change. There are some factors which should be kept under consideration:
- Internal Factors:
- Managing Relationships
- Staying Informed
- Pro – activity
The response towards the change in marketing environment can be of three types – no response, proactive response and reacting response. There are various factors responsible for the change. Some factors are natural and some are driven by the customer or competitors. The basic factors which can influence Change in the market environment can are following:
Customer Needs: Change in customer’s needs, priorities, demands has a very significant role in the change in marketing environment. The customer’s taste keeps on changing constantly. This change leads businesses to make change in their services or products too. Change is either driven by the customer himself or by the company.
For example, before Apple’s iOS, there were many mobile operating systems in the market. But iOS changed the taste of the customers affecting the whole mobile phone market. How customer himself does the change in its taste, sometimes customer has many expectations from the company. Apple’s iOS was ruling the Smartphone business giving no space to any other company, which led to the origin of Android. This change in marketing environment posed challenges to Apple. Moreover, customer’s taste also changes with product’s features, styles, services etc.
Competition: Every business has a main strategy, to remain in the top, to be a successful business. This basic instinct gives rise to the competition in the market against others. This leads to the change in the market environment. For example, suppose there are three telecommunication companies in the market of Australia. I name them ComAus, TelShip and TalkSat. Now TalkSat did a market survey asking its customers what more do they need in the services? In the market survey, they came to know that customers needed better communication services with low prices. On 26th January, the company announced its low priced calling card. This created a challenge for rest of the two companies. Within twenty days, ComAus also introduced its reduced it’s calling rates. Now the turn was of TelShip. It reduced the prices, launching a new card with extra benefits. These activities created the competitive marketing and these activities are also responsible for the change in customer’s taste affecting the marketing trends. Apart from these, there are other factors that can influence the market trends.
Innovation: Innovation has affected not only the markets but also individual’s life. The innovation in the technology, innovation in the marketing trends has created a change the marketing environment. Digital marketing is one example which has almost changed the ways of market what it used to be earlier. Social media has changed the ways of communication, advertisement and promotions.
Governments hold much of the free markets. They plan the fiscal and monetary policies which directly affects the marketplace. It can either increase or decrease the interest rates to either speed up or slow the growth, which is known as monetary policy. The supply and the demand ratio also play a vital role in the change in marketing environment. If the demand is high and supply begins to shrinks, there will be rise in the prices. On the other hand, if supply increases but the demand doesn’t, the prices will fall. When the supply remains relatively stable, there can be price fluctuations, higher or lower depending upon the increase or decrease in the demand. Supply and demand affects the market, business as a whole. Other forces include political forces, cultural forces, economic forces, demographic forces etc. The entry of new business can also bring market change.
If we look at the history of market and business, we can find the biggest success and failure due to change. Recession is a big factor that has the potential to drive market changes. Recession made many business companies bankrupt and many companies have failed to grow up such as Borders Group, Inc, The Famous Barr Co., Marshall Field and Company, and Washington Mutual Inc etc. Most of the companies are either takenover by other bigger companies as well.
The change is driven by internal as well as external forces. Companies always focus and do marketing analysis, marketing research to know about the possible threats. Companies invest a big amount of the resource on doing research on the external factors and do internal research as well such as SWOT analysis. Once the factors responsible for change in marketing environment are known, it becomes comparatively easier to plan strategies against it. An effective strategy for change management benefits the company embracing the change. The business development should be focused on the change in the marketing environment keeping all the pros and cons in mind. While many companies fail to manage the market change and face failure, many other companies enjoy success with their effective management strategies. As change is a risk as well as treasure.