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 of the leading strategists of the modern era:
Organizations that monitor and adapt their marketing strategy on a continuous basis have a competitive advantage in the marketplace.
The six major forces include:
- Demographic
- Political/Legal
- Economic
- Social-cultural
- Technological
- Natural (ecological)
Demographic Factor
The demographic factor involves insight into the population and its current growth patterns, ethnicity, age mix, education, and household patterns.
Demographic Factors – Potential Affects
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.
Economic Factors
The economic factors consist of items such as consumption patterns, availability of credit, disposable income, and interest rates provide useful information.
Economic Factors – Potential Affects
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.
Social-Cultural Factors
The social-cultural environment includes insight into the needs and wants of societies and changes in work values, religions, ethics, and geographic population shifts.
Social-Cultural Factor – Potential Affects
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.
Political-Legal Factors
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.
Political-Legal Factor – Potential Affects
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.
Technology Factors
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.
Technology Factor – Potential Affects
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.
Natural Factors
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.
Natural Factor – Potential Affects
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.
IBM – Winning with Marketing Strategy
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 monitored and considered the six major factors to create a solid strategy. IBM was flexible enough to respond to the previous recession from 2007-2009 while cultivating customer equity with marketing and branding strategies and differentiated business model.
Hewlett Packard (HP)
HP, on the other hand, suffered greatly during and after the recession. The recession brought to light critical deficiencies including marketing, business model, technology and economic trend forecasting. Other areas of weakness included channel partner issues. All of these factors were unaddressed during peaks and expansion.
In contrast, IBM had addressed all of the factors prior to the recession, and HP did not. Now, IBM is enjoying a significant competitive advantage over the competition, having achieved their marketing and business objectives.
Summary
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 many companies that did not prepare properly for impending recessions that suffered greatly, while many with proper strategic planning continue to succeed.
Common failings of organizations include a failure to target their audience and provide messages that resonate increasing engagement or lack a solid plan for a potential change in legislation.
During more recent times, companies have failed to consider 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.
