Just like a natural environment, the digital marketing environment is built upon a delicate eco-system that can become unbalanced if the wrong elements are added or removed from it. This will determine whether or not a firm’s strategy will be successful or if it will diminish. In the digital marketing environment it consists of two main eco-systems, the macro and the micro-environment. These environments are built up by a number of different components which will directly impact an organisations strategic decision making. The image to the right provides a visual representation of the digital marketing environment.
Macro Environment
In marketing, the macro environment is the set of external factors and forces that can’t be controlled by a firm but will influence its digital progression. These factors include technological, economic, political, legal and social pressures. All digital marketers need to be well aware of any changes in the macro-environment, such as ‘changes in social behaviour, new laws, and technological innovation that could create potential opportunities and threats. Organisations that monitor and respond effectively to their macro-environment can create differentiation and competitive advantages that enable the business to survive and prosper’ (Chaffey et al., 2017). When first entering a new market, or reviewing an existing one, a firm will use a tool known as a PEST or PESTEL analysis to monitor and understand the current macro-environmental conditions. The following video explains and demonstrates why it is important for digital marketers to always analyse the macro-environment.
Micro Environment
The Micro-environment concentrates on the players that mould the immediate trading environment, also known as 'the operating' environment (Chaffey et al., 2017). Take a look at the image at the start of the blog, and you can see how the two environments are situated internally and externally. The factors in a firms micro-environment include customers, competitors, suppliers and intermediaries, such as resellers and search engines. For a digital marketer to create a successful marketing strategy, they must understand the behaviour and intercommunications between these factors. The micro-environment, in particular, aims to centre on the consumer's needs, wants and desires. To be successful, it is crucial to understand consumer and competitor behaviour and which suppliers and intermediaries offer services that help achieve digital marketing goals.
How does the Digital Marketing Environment Impact on a Firm's Strategic Decision Making?
The digital market is continuously evolving; therefore, it should be monitored at all periods to react to changes. Now that you have a broader understanding of the digital marketing environment, you might be wondering how consistently reviewing these factors can benefit a firm. Ultimately it comes down to an organisations strategic agility. Strategic agility is the capacity to innovate and gain a competitive advantage within a market place by monitoring changes, effectively evaluating alternatives, reviewing and implementing appropriate strategies (Chaffey et al., 2017).
In 2020 especially, it has been incredibly easy to see which organisations have placed an importance on being strategically agile with the consistently changing environment brought down by COVID-19. Click on my next blog titled 'Digital Marketing Strategies to Survive COVID-19' to read about how businesses has stayed strategically agile by consistently adapting to the challenges brought on by COVID-19, by continuously analysing of the digital marketing environment.
References:
B2U - Business-to-you.com. 2020. PESTEL Analysis (PEST Analysis) EXPLAINED With EXAMPLES | B2U. [online] Available at: <https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>
Chaffey, D., Ellis-Chadwick, F., Isaac, H., Mercanti-Guérin, M. and Volle, P., 2017. Marketing Digital. Montreuil: Pearson.
Oxford College of Marketing Blog. 2020. Micro And Macro Environment Factors | Oxford College Of Marketing Blog. [online] Available at: <https://blog.oxfordcollegeofmarketing.com/2014/11/04/the-impact-of-micro-and-macro-environment-factors-on-marketing/>
The Human Factor. 2020. Strategic Agility –The Next Big Thing Is Here - The Human Factor. [online] Available at: <https://thehumanfactor.biz/strategic-agility-next-big-thing/#:~:text=Strategic%20agility%20is%20the%20ability,t%20just%20happen%20by%20itself.>
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