Competition among the key industry players – both local and international – is rapid. D’ Aveni (1995) considers the global market to be in a mode of hypercompetition and its rate is increasing as technology and industry concentration further heaps on. As a result, every business organization needs to develop a competitive advantage strategy and approach against their identified rivals. This competitive advantage is rooted on the ability and resources of the business organizations to significantly stay in the market in a considerable span of time and reap positive results. There are many issues that are needed to be addressed and solved in opening a business. For the case of international companies, they typically answer the questions as to which foreign market will they be entering, how will they enter it and when will be the best time to enter it (Gaba et al., 2002). For local operations involving small-medium enterprises, the main consideration of the marketing conditions such as product, price, placement and promotion is elementary.
Among the primary considerations upon starting up an entrepreneurial activity is the placement or place wherein the business will be situated. Marketing management concepts particularly that of marketing mix recognizes place, together with product, price and promotion (4Ps), as essential element in formulating an effective marketing strategy. The market where the product or service will be placed, when analyzed through the strategic window, is a very complex entity (Proctor, 2000, p.188). To start properly, one way of doing this is by analyzing the marketing environment where the business wishes to invest on. It is important that business entrepreneurs are aware of the distinct features of each marketing setting. In this way, the investor will have sufficient understanding on how to address the risks in the most effective way possible. Thus, analyzing the role of environment in marketing is important. This paper discusses the role of environment in successful business enterprise. It primarily details the relationship of formulating marketing strategy and environment as linked with progressive business performance. It argues that the role of environment in successful business operations is rooted on the idea that consideration of the marketing environment is essential in the effective formulation of strategy for marketing as well as management functions.
DISCUSSION
Similar with the other remaining components of the marketing mix, decisions involving the place for distribution of product or service are fundamental managerial objective particularly in terms of meeting the needs and demands of the target market. Along with key changes that occur in the general business setting, are essential forces that affect the organizations within the context of their business operations and performance. These comprise forces located at the outer surface of organizations and come from the external environment, plus forces contained by the organization itself or the internal environment (Mukherji & Mukherji, 1998). While products can be designed and marketed so as to have a more or less general appeal to most members of a market, the role of environment in identifying customers and their varying wants and needs are expected to complete a better competitive advantage by producing a number of different offerings to meet the needs of specific segments (Proctor, 2000). Further, the role of environment is inherent to the nature of market segmentation – the process of clustering people with similar needs into individuals and identifiable groups (Neal & Wurst, 2001; Jain, 2000), as it serves as the primary determinant. The environment constitutes a significant variety of people who probably are the future consumers of the product of service. It serves as the main source of information and knowledge for marketing decision making and strategy formulation and execution.
In reference to external environment, its impact is comparatively consistent in the short run or unchanged over time and these environment forces consist of increased competition, obsolete technology, and unexpected discontinuities (Mukherji & Mukherji, 1998). The environment plays as the strong factor that affects business organizations especially by the many powerful changes in the external environment. In contrast, internal environment have to some extent larger control over environmental forces and, in many cases, can be proactive in handling and managing these forces. Mukherji and Mukherji (1998) identified these proactive actions including “training, development, redesign, recruitment, compensation, investment in plant and equipment, modernization, joint ventures, contracting, mergers and strategic reorientation” (p.267). Both external and internal forces that are inherent to the environment are indispensable elements and potent sources of information for devising an effective marketing approach.
The environment brings about the place or channels of distribution. Channels of distribution are the paths that products take in moving from the producers and to the consumers and eventual consumption (Jain, 2000). There are many factors to consider when choosing location where the product or service will be sold to the consumers, and a variety of channel distribution necessary to bring the product or service among the members of the target market. Elements of distribution channel include the packaging, storage facilities, transportation, and the members of the channel itself (e.g. producers, brokers, retailers and households) (Porter, 2000). It is always relevant to choose a channel pattern that is suitable for the target market needs. In relation to environment, the selection of most applicable channel for distribution is dependent on environmental characteristics. These characteristics are seen in almost consumer markets such as demographic, socioeconomic, psychological, consumption patters, and perceptual factors (Hitt et al., 2003). There is a need for business organizations to consider environmental factors so as to effectively serve the increasingly specialized niches of customers with unique needs and interests.
On the case of Pizza Boyz, the role of environment implies the availability of presence of location where they can sell their product or service. Since it is a business in a pioneering stage, Pizza Boyz used an appropriate placement strategy. They selected the Foxton Beach Motor Camp for their product or service placement where there is a considerable number of people who will purchase their offering. The simple process of selecting a place for product or service is tantamount to the potential expansion or growth of their business and its operations. While they selected the perfect marketing environment for business operations, they needed to anticipate changes among the external and internal environment. The changing marketing strategies in the marketing environment must be taken into advantageous position while opportunities that exist within it should be manageable into useful smaller units at which it can direct its relevant resources and capabilities.
Furthermore, Pizza Boyz is able to employ the basic principle of marketing mix, that is, selection of appropriate product (service) and place for distribution. In place of distribution, Pizza Boyz can consider the increase in its retail network granted that there should be a clear market positioning standards. All these suggestions are inherent to the results of research and development (R&D) efforts. As this business activity requires significant resource allocation, it must then ensure that it is capable of overcoming possible risks and will be able to achieve success. Businesses like Pizza Boys need to be committed not just on superior product or service quality in their strategies but also need to put in place environmental considerations to enable their staff or the entire management to deliver product or service to their consumers. Environmental factors – both external and internal particularly those that have direct effect to the business should be taken into deliberate attention.
CONCLUSION
The role of environment in successful business operations is rooted on the idea of effective formulation of strategy for marketing as well as management. Uncertainty about the marketing environment is the fundamental problem with which top-level organizational administrators must deal with. To constantly stay in a highly competitive market or to continue with a pioneering economic enterprise, there is a necessity to reevaluate the changes being forced on business organizations due to the dynamics of the entire business environment.
The business marketing environment directly influences the business organization and its underlying operations. This includes the suppliers that deal directly or indirectly to the people within the business organization, the consumers who demand for the products or services offered, and other local stakeholders who influence the decision-making and taking process or anyone affected by the business decisions made by the firm itself. As such, the marketing environment of a particular business describes the relationship between business itself and the driving forces that control this relationship.
Managing the immediate business environment is very basic for starting businesses. The most difficult part is discovering the factors that are inherent to the identified environment that, in one way or the other, have potential beneficial as well as detrimental effect. Effective consideration and evaluation of marketing trends within an specified environment will bring out successful achievement of objectives that will eventually reflect success and productivity.
REFERENCES
D’Aveni, R. (1995) Coping with Hypercompetition: Utilizing the New 7S’s Framework, Academy of Management Executive, 9(3): 46.
Gaba, V., Pan, Y. & Ungson, G. (2002) Timing of Entry in International Market: An Empirical Study of U.S. Fortune 500 Firms in China, Journal of International Business, 33(1): 39+.
Hitt, M. A., Ireland, R. D. & Hoskisson, R. E. (2003) Strategic Management: Competitiveness and Globalization, 5th ed., Singapore: South-Western.
Jain, S. C. (2000) Marketing Planning and Strategy, Cincinnati: South-Western College Publishing.
Mukherji, A. & Mukherji, J. (1998) Structuring organizations for the future: analyzing and managing change, Management Decision, 36(4): 265-73.
Neal, W. D. & Wurst, J. (2001) Advances in market segmentation, Marketing Research, 13(1):14-18.
Proctor, T. (2000) Strategic Marketing: An Introduction, London: Routledge.
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