Developing a marketing strategy can be a daunting task, especially when you think about the ever-changing business and marketing landscape leaving you feeling powerless. That’s why using a common-sense framework, such as the strategic management model helps organize what seems chaotic.
The strategic management model brings sense and organization with an approach that incorporates the six major forces that a firm must monitor.
When I develop a strategy I often think about this quote from Micheal Porter, one the leading strategists of the modern:
Organizations that monitor and adapt their marketing strategy on a continuous basis have a competitive advantage in the marketplace.
The six major forces include:
The demographic factor involves insight into the population and its current growth patterns, ethnicity, age mix, education, and household patterns.
The demographic factor must be monitored by a firm to understand the population and its current growth patterns, ethnicity, age mix, education, and household patterns.
Monitoring the demographic factors help marketers decide how to segment the market and assist in tailoring marketing messages that resonate with one demographic element or a combination of demographic elements.
The economic factors consist of items such as consumption patterns, availability of credit, disposable income, and interest rates provide useful information.
An organization must monitor economic factors such as consumption patterns, availability of credit, disposable income, and interest rates.
Economic factors provide useful information that influence consumer demand for a product or service and the company’s or individual’s access to capital resources.
The social-cultural environment includes insight into the needs and wants of societies and changes in work values, religions, ethics, and geographic population shifts.
Monitoring the social-cultural environment provides critical insight into the needs and wants of society and culture.
Social-cultural factors influence the segmentation, target consumers, and provide products and services that meet their needs and wants through understanding changes in work values, religions, ethics, and geographic population shifts.
The political-legal factors are the legal and regulatory conditions for the organization to operate that include factors such as legislation for taxation, pollution, pricing, employee protection, marketing practices, and environmental.
Monitoring political-legal factors influence the legal and regulatory boundaries for the organization.
Insight into legislation for taxation, pollution, pricing, employee protection, marketing practices, and environmental factors influence the marketing budget, message strategy in advertising and external communications, and pricing strategy.
Forecasts and technology trends include factors that influence the direction of the industry, innovation opportunities for products and services, improve efficiency (processes), and help to avoid obsolescence.
Forecasts and technology trends provide factors that influence the direction of the industry and help to avoid obsolescence and stimulate innovation with new products, services, or improved efficiency.
Environmental or natural concerns deal with environmental and ethical concerns that include items such as fossil fuels, greenhouse gases, human rights, global warming, and water conservation.
Environmental or natural concerns must be monitored to address environmental and ethical concerns.
Insight into consumer behavior assists marketers develop environmental and corporate social responsibility strategies that resonates with the target audience and at a minimum comply with and governmental regulation.
In my opinion, recession reveals the true leaders in an industry to see how they perform under stress. IBM is a large company with a long history that employs hundreds of thousands of people worldwide.
Without a doubt, IBM had foresight and strategy that monitored and considered the six major factors. IBM was flexible enough to respond to the previous recession while cultivating customer equity with marketing and branding strategies and differentiated business model.
HP, on the other hand, has suffered significantly during the recession. The recession brought to light critical deficiencies. The critical deficiencies included marketing, business model, technology and economic trend forecasting, and channel partner issues that were unaddressed during peaks and expansion.
IBM had addressed all of these factors prior to the recession. Now, IBM is enjoying a significant competitive advantage over the competition, having achieved their marketing and business objectives.
Keeping a pulse on the six major forces should be an essential component providing critical ingredients to an organization’s marketing strategy and overall business strategy.
We have seen companies that did not prepare for impending recessions suffer greatly, and some continue to succeed. Organizations have failed to target and provide messages that resonate with their target audience or plan for a potential change in legislation.
Also, companies have not considered technology trends and forecasts or underestimated their target audience’s concern for the environment and social causes.
In the current business and marketing landscape, assessing the past and having a strategic approach to your marketing is essential to your organization. The six critical forces can help ensure your marketing strategy is a success.