Discussion has concentrated on reviewing the significance of environmental factors as well as a format for classifying different levels and factors associated with each level. These may impact on different industries in different ways and to a different extent. Environmental trends or changes may affect an organization and its strategic marketing planning in different ways from other organizations. Trends and changes in the environment give rise to marketing opportunities and threats. These observations suggest the requirement for an effective environmental scanning system: effective, in the sense of improving the process of strategic marketing planning. These requirements are:
The last of these requirements is not only a requirement of an effective environmental scanning system, but also part of a broader set of issues involving the ability of the organization to cope with environmental change, encompassing organizational resources, flexibility and the quality of management. This final element is included because it illustrates the point that the sole purpose of a system of environmental scanning is that is should improve strategic marketing plans in the sense of improving the opportunity for organizational success. We now focus on requirements for an effective environmental scanning system.
Organizational practice and environmental scanning
One of the earliest studies on environmental scanning in organizations was that conducted by Francis Aguilar2 and published in 1967. Based on a sample of selected chemical companies in Europe and America, Aguilar identified four basic patterns for scanning information about the environment:
Aguilar’s study showed there was a lack of a systematic approach to environmental scanning in the companies he studied, with few conducting formal searches.
Over time, more and more companies have come to develop formal scanning systems. By the mid-1980s, a study by Jain3 suggested that although still evolving, more and more companies were beginning to develop formalized environmental scanning procedures. Jain identified four distinct phases in this evolution, namely:
Phase 1: Primitive where information is noted with no purpose and effort to scanning and little discrimination used to distinguish between strategic and non-strategic information;
Phase 2: Ad hoc where there is no formally planned scanning, but increased sensitivity to information on certain issues or events which may be explored further;
Phase 3: Reactive where scanning is still unstructured and random, but often specific information is collected with a view to making appropriate responses to markets and competition;
Phase 4: Proactive where scanning is structured and deliberate using pre-established methodologies with a view to predicting the environment for a desired future.
Perhaps the overriding reason for the slow development of formal environmental scanning and appraisal systems is that it is difficult to achieve. However, modern companies have developed skills in this area. In addition, although it was once a neglected area in the planning literature, Johnson illustrate how environmental appraisal is now the subject of more research as its importance to strategic planning has become appreciated. The development of more ‘proactive’ appraisal systems requires the establishment of systematic procedures designed specifically to input into strategic marketing decisions. We now consider one such system.
A framework for appraisal
A number of frameworks for environmental appraisal have been developed. In our view, one of the most useful of these is that proposed by Jain5.
The six key steps are as follows:
Environment appraisal and strategic planning
This framework for environmental appraisal represents a structured and logical approach to this procedure. Moreover, it fulfils many of the requirements outlined earlier for an effective appraisal system. However, there are still practical problems in this appraisal process which we need to consider further.
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Marketing Management Tutorial
Development Of A Strategic Approach To Marketing: Its Culture; Internal Macro- And External Micro-environmental Issues
Markets And Customers: Consumer And Organizational Buyer Behaviour And Marketing Strategy
Markets And Customers: Market Boundaries; Target Marketing
Product And Innovation Strategies
Channels Of Distribution And Logistics
Customer Care And Relationship Marketing
Marketing Information Systems And Research
Analysing The Environment: (opportunities And Threats) And Appraising Resources (strengths And Weaknesses)
Evaluating And Controlling Strategic Marketing
Strategic Marketing Planning Tools
Services Marketing And Not-for-profit Marketing
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