Navigating Uncontrollable Market Variables for Business Success
A company can be seen as a unit that expands as it develops relationships with its environment. This environment is characterized by instability. Changes are common, suggesting that marketing plans should be flexible enough to adapt to new situations.
The market environment consists of agents and forces beyond the company’s control, affecting its ability to develop and maintain successful transactions with target consumers. To succeed, a company must adapt its marketing mix to the evolving tendencies of this environment.
Uncertainties and constant changes in the market environment profoundly affect the company. Instead of slow, predictable change, the environment can produce significant surprises and shocks. The market environment presents both opportunities and threats, and the company must leverage its research (Market Intelligence System – MIS) to observe the environment and its changes.
Because these factors are outside the company’s control, they are dubbed uncontrollable variables. The force of these variables can be very strong, making adjustment difficult. Many companies fail because they do not adapt to actual market conditions.
Common Uncontrollable Variables
Political/Legal Environment
This environment is of fundamental importance, as our daily lives are affected by government changes and new laws. Government changes are accompanied by changes in reaction. Laws present another challenge to marketing professionals, influencing company performance and requiring close monitoring by administrators.
Socio-Cultural/Demographic Environment
Societal demands change over time. Consumers are becoming more informed and aware, leading to more demanding buying habits. Cultural aspects are also extremely important, determining the buying habits of many consumer groups. Demographic variables, such as changes in birth rates, buying habits, and population aging, also affect long-term company strategies.
Economic Variables
When the economy recovers, expenses increase, and businesses are generally reactivated by accelerating productive output. Inflation can have different consequences. Consumers may either cut back on spending or shop faster to avoid higher prices in the future.
Competition
Many companies launch new products to eliminate competitors’ products. Besides product competition, there is competition among companies. The entry of many competitors may lead to the removal of some retailers, at least in selected areas of action.
Technology
Manufacturers strive for better market positioning through products developed in their laboratories and techniques for improvement. Society is moving towards increased leisure time, leaving routine work to machines.