The business environment refers to forces that affect the business’s ability to build or maintain relationships with customers. Marketing activities can be significantly impacted by two levels of the environment, micro, and macro environments. These environmental factors must be given in-depth consideration during the creation of strategic marketing plans to improve the business’s success and the brand being reputable.
Microenvironments are small forces that affect the business’ ability to serve customers. For example, this could be suppliers, competitors, stakeholders, government, or regulating body. These factors are usually local to the business, and so business owners are aware of them.
Macro environments are larger societal forces that affect the microenvironment. These are generally outside of the business’s control and are of a larger scale, such as economic and industry viewpoint.
Analyzing demand for digital marketing services is essential in ensuring the business’ success. Marketers must understand the trends and levels of use of the internet as well as other online services. It is also crucial that they understand how customers utilize digital services available to them, quantify the potential use and value for the business from online customers, and conduct a qualitative analysis of online channels’ perceptions.
Steps in market demand analysis:
In this market demand step, the business identifies its product/service’s target market. The company may choose research tools such as surveys or feedback questionnaires to determine customer satisfaction. Dissatisfied comments can be considered and, in some cases, utilized to implement improvements to enhance the satisfaction of the customers.
The next step would be to assess the business cycle stage each market is undergoing (emerging, plateau, or decline). A good indication of a market in the emerging stage is high consumer demand and a low supply of products and services. In the plateau stage, the market demand is met by the supply of goods/ services. There is little consumer demand for the goods/ services offered by the business in the declining stage.
The business must then tailor their services or develop products that meet their niche’s specific needs in the market. They must be differentiated and unique so that they can stand out amongst peers in the market and meet the target consumer’s needs, thus creating a high demand for the good / service.
The business must look at its competitors in the final step and determine the number of competitors and their current market share. If the market falls within the emerging stage of the cycle, the company may have fewer competitors leading to a higher profit margin.
Companies implement demand analysis to understand the level of demand for a product or service. This allows them to determine if they can enter a market and be successful in generating profit to advance their operations.