Any combination of methods used to gather information and better understand a company's target market is known as 'marketing research'. Businesses use this data to improve their product design, and user experience and to develop a marketing strategy that generates high-quality leads and improves conversion rates.
Analytics gives you the what, but research gives the why. Big data, user analytics, and dashboards can tell you what people are doing on a large scale, but only research can tell you what they're thinking and why they're doing it.
For instance, analytics can show that customers abandon your pricing page, but only research can explain why.
It can be hard to understand users without conducting research. Research keeps you from planning in a vacuum. It is good to understand who the users are and what they need; but to earn their loyalty, one must dive deep. Assumptions, trends and so-called 'best practices' are all defeated by research. Sometimes co-workers rally around bad decisions. You'll be less likely to get dragged in the wrong direction when listening to users and focusing on customer experience.
Obsessing over your users is the only way to win. If you don’t care deeply about improving user experience, you will lose potential customers to someone who does.
Watch the following video to learn how the internet can be used to research marketing.
Traditional market research is a much slower and more complex process than online market research. With a few mouse clicks, you can obtain all of the information you require. This is because everything a person does on the internet leaves a data footprint. With this data footprint information, you can make well-informed business judgements rather than deciding on the spur of the moment.
You will be able to learn specific information from market research, such as:
- what your customers want in a brand
- what they need from your brand, and what they expect
- what they don’t like about the brand
- what makes them repeat customers
- what are the latest market trends
- engaging with your audience
- letting your customers help steer your business.
After looking at the 'why' that market research gives us, let us now look at the what of environmental analysis.
What is marketing environmental analysis?
Marketing Environmental Analysis (MEA) is a tool for strategic analysis. This procedure assists in identifying the internal (micro-environmental) and external environmental (macro-environmental) factors that impact the organisation's ability to function correctly.
A business leader creates a company's structure, culture and rules to provide employees with clear guidelines. However, the success of a firm is determined by how it handles any external environmental consequences.
The 'environmental analysis' evaluates the external business environment to identify risks and possibilities. One way to monitor the environment is by doing a PESTEL analysis (illustrated below).
A PESTEL study (also known as a PESTEL analysis), is a framework or method for analysing and monitoring macro-environmental elements that can significantly impact an organisation's performance. This is an extremely valuable tool--particularly when launching a new firm or entering a foreign market.
As shown in the illustration above, the PESTEL acronym stands for:
- Political
- Economic
- Social
- Technological
- Environmental
- Legal.
We will take a look at each element of PESTEL analysis in detail below.
Political factors
These factors all have to do with how, and to what extent, the government intervenes in the economy or a particular business. This is how a government's influence on your business is defined.
Some examples of these influencing factors include:
- government policy
- political stability/instability
- corruption
- foreign trade policy
- tax policy
- labour legislation
- environmental law
- trade restrictions.
Furthermore, the government can significantly impact a country's educational system, infrastructure and health legislation.
All of these considerations must be examined when determining the desirability of a potential market.
Economic factors
Economic considerations influence how well a country's economy performs. Economic growth, exchange rates, inflation rates, interest rates, consumer disposable income and unemployment rates are all economic factors.
These factors may have a long-term direct or indirect impact on a company because they affect consumer purchasing power and may change demand/supply models in the economy. As a flow-on consequence, the resulting impact affects how businesses price their goods and services.
Social factors
Social factors represent the social variables that make up the organisation's macro-environment. This entails researching demographics as well as potential customers. These criteria aid in determining the market's potential size. It covers research into population growth, age distribution, career and attitudes, among other things.
Technological factors
As we all know, technology advances at an incredible pace and customers are eager to embrace innovations.
Understanding aspects such as technological breakthroughs, the rate at which technology becomes outdated (e.g. the operating system in mobile phones), automation and innovation are all part of the process.
You might be able to prevent your organisation from spending a lot of money developing a technology that will become obsolete very quickly due to disruptive technological advancements elsewhere if you know what's going on in the world of technology.
Environmental factors
Environmental factors have only recently become more prominent. They've grown in importance due to rising raw material scarcity, government pollution targets and carbon footprint targets. These elements include ecological and environmental factors (such as weather, climate, environmental offsets and climate change) which can significantly impact industries like tourism, farming, agriculture and insurance.
Furthermore, as people become more aware of the potential consequences of climate change, businesses are changing how they operate and what products they offer. As a result, many businesses are becoming increasingly active in corporate social responsibility and sustainability practices.
Legal factors
Legal factors include more specialised laws such as discrimination laws, antitrust laws, employment laws, consumer protection laws, copyright and patent laws, and health and safety regulations--any of which may overlap with political factors.
Companies need to understand what is and is not lawful to trade profitably and ethically.
When a company deals internationally, this becomes even more complicated because each country has its own rules and regulations. Businesses should be informed of any potential legislative changes and their implications for the organisation in the future. It is strongly advised to seek the advice of a legal counsellor or attorney to assist with these issues.
It is easy for a busy business to get caught up and lose sight of legal factors in the day-to-day operations of a business. If this occurs, they will open themselves up to 'risk' in the sense that (at a minimum) they may be:
- losing opportunities to help their business grow
- allowing threats (internally and externally) to undermine their products or services.
But the truth is also that, like brushing your teeth and paying your taxes, marketing research is a crucial ongoing activity that businesses should follow.
So, where do you start? There are multiple strategic marketing plans that businesses follow; however, we will look closely at the 7Ps strategy.
Why are you about to delve into the 7Ps in such detail? They are, after all, quite important. They serve as the foundation of any successful marketing strategy.
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These are the 7Ps of marketing--they make up the 7 primary factors of the marketing mix. This combination strategically positions a company in the market and can be deployed at different levels of force. This is done to guarantee that the target audience is satisfied, that the value perception is correct, and that the company stands out from the competition.
Implementing the 7Ps in the best way possible for your business can be incredibly advantageous, but you must first thoroughly understand each piece of the 7Ps puzzle. Let us have a look.
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Still interested in learning more about strategic Marketing or the 7Ps? Have a look at the following video for a visual explanation.
In order to lead the market and confront business competitors, the company needs to develop a strategy that confronts all competitive forces. This will not only protect the company from competitors but also ensure a reliable competitive position in the market.
A corporation can strategically and tactically use external data to establish core competency and competitive advantage in a given market by applying external analytical frameworks such as the PESTEL and the 7Ps to get a competitive edge in the market.
Look at the 3 new innovative products shown in the images below.
Choose one of the products and develop a marketing strategy for your chosen product by applying the 7Ps of marketing.
Share a summary of your strategy to launch this new product in the forum. Share some tips that we might have missed.