Market Analysis and Segmentation. External Factors
Category: Marketing
Marketing Audit
Undertake a marketing audit of your business which comprises a resume of the external and internal influences on your justness.
External Factors
It is important to examine in detail those external factors (which are not directly within your company’s sphere of influence), that may have an impact on the future success of your business.
Some features associated with these factors are suggested below and in the succeeding pages but may be supplemented by other headings which are pertinent to your own company’s circumstances.
— Social
— Cultural
— Economic
— Technological
— Legislative
— Political
— Competitive
— Environmental
Social
Issues you should address include the following:
If you market consumer products, can you assess what impact the growth in out of town shopping will have on your business? How significant is shopping convenience to your customers? |« What influence will a rise in mail order business have on your service image? How important is time saving to your customers?
How will a progressively ageing population and/or reduction in numbers of school children influence your sector?
— How will green consumerism impact the popularity of your type of products and packaging?
— Do you expect any changes in the way your customers might buy? (e g, where, how often, how many)
Cultural
Issues you should address include the following:
— If you are selling in overseas markets, what cultural traits will impact the way business is conducted?
— How suitable are your products, packaging and presentation? How should they be modified?
— What influence do separate national traditions and language have and how will these elements affect the way you do business-? Do your product names or packaging colors convey a positive impression in overseas locations? What modifications should you consider? (Be careful of local taboos)
Economic
Issues you should address include the following
— What is anticipated in terms of inflation, materials shortages. interest rates and credit availability and how will this affect your domestic business?
— What impact will currency exchange rates have on your raw material purchases and on your export business?
— «How will developments in income, prices, credit and consumer spending affect you»?
Technological
Issues you should address include the following
— What major changes in product and process technology are taking place, and is the company geared to respond-? What technical specification changes will be required of your products or services to enable them to compete in foreign markets?
Legislative
Issues you should address include the following
— Are changes in legislation occurring which will have an impact on your business (product or service specifications)? What changes might take place?
— How will you be affected by future legislation determined in Brussels? (You should consult appropriate information databases on the Single European Market through your regional development agency)
Political
Issues you should address include the following
— Does the party in power at national regional or local government level affect your business? If so to what extent?
— Are your export markets politically stable? If not how will you be affected by changes in regime-?
— Has your industry sector traditionally been one which has been selected as being in the national interest? How could this affect you?
— Are you involved in supplying critical technology? Are export limitations likely to be imposed which will impact your plans for overseas sales penetration? If so to what extent?
Competitive
Issues you should address include the following:
— Who are your competitors and what are they doing?
— Who may become a threat to your company and what steps can you take to minimise the risks?
— Where does your company and products fit into the competitive arena-? Is your competition increasing? Are there any dark. horses you should monitor? How might you cope?
Environmental
Issues you should address include the following
— How will green considerations affect your products? (e g aerosols, refrigeration, toxic pollutants)
— How will future materials shortages impact your business? What substitutes are available to you?
— If you are a foodstuffs supplier to what extent are customers moving towards organically grown/natural ingredients? How are you positioned?
— Can you predict any changes or trends in transport methodology which should be addressed? (e g rail vs. road) What alternatives are open to you?
— In selling goods overseas should you be aware of long term impact of natural disasters on product demand? (e g floods drought pollution) What options are open to you to help spread your risk?