What are the trends in the natural environment that are affected by marketing activities?

The marketing environment is everything your company must take into consideration when developing and presenting a new product. The elements of a marketing environment include, but are not limited to, the changing preferences of customers, your competition, the legal, political and regulatory environment, your own resources and budget, current trends and the overall economy. All these components within the marketing environment affect your marketing decisions – or at least they should, because all of them influence your prospects.

Tastes and Trends

Understanding and managing consumer preferences is critical to business success, suggests Penpoin. A marketing plan should be based on research that shows evolving consumer preferences and emerging market trends. For example, many large retailers have decided to adapt to consumers' increasing enthusiasm for social media by establishing corporate Twitter accounts and opening online storefronts in Facebook.

Consumers no longer need to visit a retailer's main website to buy; some platforms allow them to make the purchase without ever leaving Facebook. Companies that fail to take major trends into account may find their sales lagging behind competitors'.

Budget and Economy

Your budget plainly has a role in your marketing strategy. It dictates how much advertising you buy and where you can afford to place it. However, access to lower cost social media platforms helps small businesses mitigate this challenge.

Another key component within the marketing environment is the health of the overall economy. The state of the economy has a massive influence on your marketing decisions. If you're marketing in a down economy, your consumers won't be willing to pay a premium for your product.

If the economy is sluggish, your advertising should probably point out that the product saves your customers money, costs less than your competitor's product, or lasts a long time and is therefore a good value. In a strong economy, your strategy probably will change. You'll be able to charge more, and your ad message may stress the pleasure or convenience your product offers your customers.

Strength of Competitors

Prudent marketing decisions must factor in competitors. Researching how many you have and how good they are at what they do will affect your marketing plans. If, for example, your competitors are able to offer their product for a much lower price than yours, your marketing strategy must stress the fact that your product is of a higher quality,

Business.com suggests carving out a niche in a tight market. For example, you can gain an advantage by advertising that your warranty is better or that your product lasts longer. If you have few or no local competitors, you're free to expand into new markets. You may choose to broadcast your ad on a Spanish-language television station, for example.

Legal and Political Considerations

Changes in the political and legal environment can restrict or even end certain marketing activities. The tobacco industry is a case in point. The U.S. government first mandated cigarette warning labels in 1965, and, as evidence of cigarettes' harmful health effects grew, it battled the tobacco industry more and more vigorously.

These battles culminated in the passage of a 2009 law that gave the federal government the authority to regulate tobacco, which also includes its marketing and labeling. Before offering a product, you should consider whether it is a candidate for legal or regulatory trouble.

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Growing customer base

The world’s population will grow from 7.8 to 8.2 billion by 2025¹, with the majority coming from Asia and Africa. The elderly and the Chinese are expected to account for 50%² of global consumption growth from 2015-2030, leading to new product innovation to support their needs and an increased focus on this region.

Local brands will be even more relevant and trusted for consumers leading to strong growth for local and regional companies in emerging markets.

¹ https://population.un.org/wpp/Download/Standard/Population/
² McKinsey

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Living longer and more responsibly

Consumers are seeking products that support their physical and mental health and wellbeing, and are demanding greater transparency and questioning of labels.

In taste and wellbeing, we see key health, nutrition and wellbeing trends driving consumer behaviour for food that provides positive nutrition; that supports living longer and healthier and that increases wellbeing and performance. The global food system continues to be under pressure from the demand of feeding a growing population of up to 10 billion people with diminishing resources.

For fragrance and beauty, consumers are looking for products that provide essential hygiene protection, support their wellbeing, and allow them to look younger for longer. The current coronavirus has also sharpened the criticality of hygiene products to protect people’s health, and we expect this to continue over the short to medium term.

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Sustainability is of high concern

As the climate crisis looms and social inequalities rise, consumers are looking to vote with their feet and support businesses that they believe act responsibly and play their part in addressing these societal challenges.

They are looking for products that are produced in a way that does not cause harm to the environment leading to greater transparency on sourcing and responsible innovation.

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The impact of COVID-19: E-commerce, self-care and localisation gain importance

The impact of the COVID-19 pandemic has surfaced new additional trends, for the short and longer term. The expansion of e-commerce is changing the shape of retail, and is growing faster than expected as a result of the pandemic.

Consumers’ health and wellbeing has risen even more in importance and they are looking for solutions that enhance and support this. There is also increased localisation of production¹; supply chains need to find ways to overcome potential future supply and trade restrictions.

¹ McKinsey industry survey (N=30); Euromonitor; EY GBG2020

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