External factors of marketing strategy can include competitive decisions and the economy.
There are a number of external factors that can affect a company's marketing strategy. It is crucial for marketing managers to account for these extraneous variables when writing their business plans. Additionally, marketing professionals should continuously research their industries so they can account for various external factors before they affect the business. Companies must be highly adaptable to survive in an ever-changing business environment.
Regulations
Both local and federal regulations can have an impact on a company's marketing strategy. On a small scale, local ordinances may prevent outdoor promotions in certain areas. On a national scale, the government often regulates certain industries more stringently than others. For example, federal regulations have restricted the advertising and promotions of the tobacco industry. Labeling laws covering food products have changed because of the fight against obesity. Also, foreign countries can impose embargoes on U.S. companies, which may hinder their exports to those particular nations.
Economy
The state of the economy can have a major impact on a company's marketing strategy. For example, premium-brand consumer products companies may find consumers switching to cheaper brands during economic downturns. Entire industries, such as the restaurant industry, may also experience decreases in sales because people are not dining out as much. Companies will often need to lower their prices during recessions. Conversely, economic boom periods may put a strain on a company's production and delivery times. Marketers need to adapt their marketing strategies to account for various economic shifts.
Competition
Competitive strategies can also affect a company's marketing strategy. Therefore, it is important for company marketing managers to monitor their competitors on an ongoing basis. One way to monitor competitors is by using a SWOT (strengths, weaknesses, opportunities, threats) analysis. For example, companies can study the strengths and weaknesses of their competitors and compare them to their own strengths and weaknesses, according to a writer on QuickMBA, an online reference site. Company marketers can then use key strengths such as superior customer service or quality to ward off competitive strategies. For example, a company may beef up its own customer service department if a competitive company is focusing more on its own customer service.
Technology
Technology is another external factor affecting marketing strategy. All products have a certain life cycle, which includes the introduction, growth, maturity and decline stages. Products often enter the decline stage when new technologies are introduced to the market. Companies will need to decide if they will introduce their own new technology and still keep producing older products. For example, black and white televisions were still around after the introduction of color televisions. A company may even reduce the prices of older products and technologies when introducing new ones.
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