Skip to main content
SpringerLink
Log in

Understanding the Market Environment and the Competition

  • Chapter
  • First Online:
Marketing Management

Part of the book series: Springer Texts in Business and Economics ((STBE))

Abstract

An understanding of the environment is important for the marketer. Social, technological, economic, political, and ecological factors can have a major impact on the firm’s opportunities and threats. Key social and cultural elements to consider are the redefinition of occupations, a societal trend toward postmaterialism, and major demographic shifts. In the area of technology, the outlook for marketers is likely to be thoroughly changed by transformations in information processing and the subsequent shifts in business practices as well as the emergence of new materials, new biotechnological products, and growing environmental concerns. In the economic area, increasing globalization, regional integration, and exchange rate effects represent major influences on marketing practice. The political environment is characterized by legislative and regulatory actions that influence the firm but that can also be influenced by the firm. However, the political arena is also increasingly defined by the activities of special interest groups whose actions can have a major effect on firms. Furthermore, the marketer is likely to be required, either by regulation or by good marketing sense, to take into account various stakeholders beyond the shareholders if the firm and its products are to remain acceptable to society at large. The ecological background of the target market also needs to be considered, in order to satisfy the contemporary ethical customers.

To deal with the environment, the firm must first analyze and understand it. Such analysis can be accomplished by environmental scanning, Delphi studies, and scenario building. To understand the competition, however, the firm must evaluate more specific issues such as market structure, products and production processes, and industrial changes taking place.

After understanding these dimensions, the firm can achieve a successful strategic position through economies of scale, political clout, and captive distribution systems. Firms that are unable to win the competitive battle in the field of commerce in particular are increasingly seeking victory in the halls of government. Building and maintaining a successful position also require an understanding of the likely competitive response from adversaries and the different strategies that leaders and followers can employ. Overall, you should remember that as difficult as it may be to maintain a leadership position, it is even harder to be a profitable follower.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 109.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 139.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. Lieberson, S., & O’Connor, J. F. (1972). Leadership and organizational performance: A study of large corporations. American Sociological Review, 37, 117–130.

    Article  Google Scholar 

  2. Czinkota, M. R., & McCue, S. S. (2001). The Stat-USA companion to international marketing. Washington, D.C.: U.S. Department of Commerce.

    Google Scholar 

  3. Reich, R. B. (2010). The work of nations: Preparing ourselves for21st century capitals. New York: Knopf.

    Google Scholar 

  4. Dickson, P., & Czinkota, M. R. (1996). How the U.S. can be number one again: Resurrecting the industrial policy debate. Columbia Journal of World Business, 31, 76–87.

    Article  Google Scholar 

  5. Inglehart, R., & Appel, D. (1989). The rise of postmaterialist values and changing religious orientations, gender rules and sexual norms. International Journal of Public Opinion Research, 1(1), 43–78.

    Article  Google Scholar 

  6. Laroche, S. (2017). Cause-related marketing in five unique culture (honours dissertation). Texas: Texas Christian University.

    Google Scholar 

  7. Bonetto, L. (2015). The ethical consumer – US – July 2015. Mintel Academic. Mintel Group Ltd.

    Google Scholar 

  8. Choi, J., Chang, Y. K., Li, Y. J., & Jang, M. G. (2016). Doing good in another neighbourhood: Attributions of CSR motives depend on corporate nationality and cultural orientation. Journal of International Marketing, 24(4), 82–102.

    Article  Google Scholar 

  9. Chen, Z., & Huang, Y. (2016). Cause-related marketing is not always less favorable than corporate philanthropy: The moderating role of self-construal. International Journal of Research in Marketing, 33(4), 868–880.

    Article  Google Scholar 

  10. Krishna, A. (2011). Can supporting a cause decrease donations and happiness? The cause marketing paradox. Journal of Consumer Psychology, 21(3), 338–345.

    Article  Google Scholar 

  11. Grolleau, G., Ibanez, L., & Lavoie, N. (2016). Cause-related marketing of products with a negative externality. Journal of Business Research, 69(10), 4321–4330.

    Article  Google Scholar 

  12. Koschate-Fischer, N., Stefan, I. V., & Hoyer, W. D. (2012). Willingness to pay for cause-related marketing: The impact of donation amount and moderating effects. Journal of Marketing Research, 49(6), 910–927.

    Article  Google Scholar 

  13. Heidbreder, L. M., Bablok, I., Drews, S., & Menzel, C. (2019). Tackling the plastic problem: A review on perceptions, behaviors, and interventions. Science of the Total Environment, 668, 1077–1093.

    Article  Google Scholar 

  14. Nace, T. (2019). Thailand supermarket ditches plastic packaging for banana leaves. Forbes. https://www.forbes.com/sites/trevornace/2019/03/25/thailand-supermarket-uses-banana-leaves-instead-of-plastic-packaging/#3aeb02c87102. Accessed 29 June 2019.

  15. The Independent. (2018). Agreement signed to produce jute-made ‘Sonali Bag’. http://www.theindependentbd.com/post/168851. Accessed 23 May 2019.

  16. Peerallya, J. A., Fuentes, C. D., & Figueiredo, P. N. (In Press). Inclusive innovation and the role of technological capability building: The social business Grameen Danone Foods Limited in Bangladesh. Long Range Planning. Published online ahead of print: https://doi.org/10.1016/j.lrp.2018.04.005.

  17. Gates, B. (2009). Business @ the speed of thought: Succeeding in the digital economy. New York: Warner Books.

    Google Scholar 

  18. RFID technology is best suited to box and pallet. Microscope (2004, May 24), p. 12.

    Google Scholar 

  19. Fallon, J. (1994). U.K. Is seen ahead in ECR, technology: Efficient consumer response. Supermarket News, p. 11.

    Google Scholar 

  20. Change at the check-out. Economist (1995, March 4), p. R3.

    Google Scholar 

  21. Peterson, L. (2016). What are some famous or great examples of internal branding in a company? Quora. https://www.quora.com/What-are-some-famous-or-great-examples-of-internal-branding-in-a-company. Accessed 12 June 2019.

  22. Clemons, E. K., & Row, M. C. (1992). Information, power, and control of the distribution channel: Preliminary results of a field study in the consumer packaged goods industry. Semantic Scholar. https://pdfs.semanticscholar.org/952c/8aa10ccdf4a48e4fb262f967eb7d5ac552d9.pdf. Accessed 2 July 2019.

  23. Mazur, L. (1994). Evolution in the workplace. Marketing, p. 6.

    Google Scholar 

  24. Shareefa, M. A., Mukerjib, B., Dwivedic, Y. K., Ranac, N. R., & Islamd, R. (2019). Social media marketing: Comparative effect of advertisement sources. Journal of Retailing and Consumer Services, 46, 58–69.

    Article  Google Scholar 

  25. Fukukawa, S. (1989). The future of U.S.-Japan relationship and its contribution to new globalism (pp. 10–11). Tokyo: Ministry of International Trade and Industry.

    Google Scholar 

  26. Day, K. (1995). Biotech’s other benefits. Washington Post, p. H1.

    Google Scholar 

  27. Foster, R. N. (1988). Innovation: The attacker’s advantage (p. 35). New York: Summit Books.

    Google Scholar 

  28. Galbraith, J. K. (2007). The new industrial state (paperback ed.). Princeton: Princeton University Press.

    Book  Google Scholar 

  29. World Trade Organization. International trade. www.wto.org. Accessed June 2004.

  30. World Trade Organization. (2019). Global trade growth loses momentum as trade tensions persist. https://www.wto.org/english/news_e/pres19_e/pr837_e.htm. Accessed 19 June 2019.

  31. United Nations. (2020). 2002 World investment report. www.un.org. Accessed 15 June 2003.

  32. The Economist. (2012). The biggest transnational companies. https://www.economist.com/graphic-detail/2012/07/10/biggest-transnational-companies. Accessed 30 June 2019.

  33. The Guardian. (2019). What is China’s belt and road initiative?https://www.theguardian.com/cities/ng-interactive/2018/jul/30/what-china-belt-road-initiative-silk-road-explainer. Accessed 5 July 2019.

  34. Bank for International Settlements. (2001). Central Bank survey of foreign exchange and derivatives market activity. Basle: BIS 2003.

    Google Scholar 

  35. Mahmood, S. (2012). Why government so anti foreign students. New Statesman. www.newstatesman.com/blogs/staggers/2012/09/why-government-so-anti-foreign-students. Accessed 27 December 2012.

  36. U.S. Department of Justice. (2002). Foreign Agents Registration Act 2002 report. www.usdoj.gov. Accessed 11 August 2004.

  37. Oil platforms: Hollow shell. Economist (1995, June 24), p. 76.

    Google Scholar 

  38. www.sustainability.com. Accessed 11 August 2004.

  39. Copeland, T. E. (1994). Why value value? The McKinsey Quarterly, 4, 97.

    Google Scholar 

  40. Czinkota, M. R., & Woronoff, J. (1993). Unlocking Japan’s markets (2nd ed., p. 25ff). Rutland: Charles E. Tuttle.

    Google Scholar 

  41. Rosenberg, L. J. (1985). Revisioning marketing management for the new paradigm era. In Changing the course of marketing: Alternative paradigms for widening marketing theory (Supplement 2). Greenwich: JAI Press.

    Google Scholar 

  42. Wheeler, D. R. (1988). Content analysis: An analytical technique for international marketing research. International Marketing Review, 5, 34–40.

    Article  Google Scholar 

  43. Auster, E., & Choo, C. W. (1994). CEOs, information, and decision making: Scanning the environment for strategic advantage. Library Trends, 43(2), 38.

    Google Scholar 

  44. Winter, L. G., & Prohaska, C. R. (1983). Methodological problems in the comparative analysis on international marketing system. Journal of the Academy of Marketing Science, 11, 421.

    Article  Google Scholar 

  45. Delbecq, A., Van de Ven, A. H., & Gustafson, D. H. (1975). Group techniques for program planning (p. 83). Glenview: Scott Foresman & Co.

    Google Scholar 

  46. Mercer, D. (1995). Simpler scenarios. Management Decision, pp. 32–40.

    Google Scholar 

  47. Rutenberg, D. (1991). Playful plans. Queen’s University, working paper.

    Google Scholar 

  48. Jennings, D. F., & Lumpkin, J. R. (1992). Insights between environmental scanning activities and Porter’s general strategies: An empirical analysis. Journal of Management, 18, 791.

    Article  Google Scholar 

  49. Porter, M. (2008). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press.

    Google Scholar 

  50. Gruca, T. S., & Sudharshan, D. (1995). A framework for entry deterrence strategy: The competitive environment, choices, and consequences. Journal of Marketing, 59, 44–56.

    Article  Google Scholar 

  51. Andreasen, A. R., & Kotler, P. (2008). Strategic marketing for nonprofit organizations (7th ed.). Upper Saddle River: Prentice Hall.

    Google Scholar 

  52. Bowman, D., & Gatignon, H. (1995). Determinants of competitor response time to a new product introduction. Journal of Marketing Research, 32, 42–53.

    Article  Google Scholar 

  53. Robertson, T. S., Eliashberg, J., & Rymon, T. (1995). New product announcement signals and incumbent reactions. Journal of Marketing, 59, 1–15.

    Article  Google Scholar 

  54. Nayyar, P. R. (1993). On the measurement of competitive strategy: Evidence from a large multiproduct U.S. firm. Academy of Management Journal, 36, 16–54.

    Article  Google Scholar 

  55. Kotler, P. (2015). Marketing management (15th ed.). Upper Saddle River: Prentice Hall.

    Google Scholar 

  56. Slywotsky, A. J., & Shaprio, B. P. (1993). Leveraging to beat the odds: The new marketing mind set. Harvard Business Review, 79, 76.

    Google Scholar 

  57. Kotler, P., & Singh, R. (1981). Marketing warfare in the 1980s. Journal of Business Strategy, 2, 30–41.

    Google Scholar 

  58. Henderson, B. D. (1985). The rule of three and four. In Perspectives. Boston: Boston Consulting Group.

    Google Scholar 

  59. White, G. (1998). General motors to take nationwide test drive on web. Wall Street Journal, B4.

    Google Scholar 

  60. Simons, J. (1999). New FTC rules aim to protect kid web privacy. Wall Street Journal, B1, B4.

    Google Scholar 

  61. Howe, K. (1999). China’s Nascent managers, seeking fame and fortune, Shun factories. Wall Street Journal Interactive.

    Google Scholar 

  62. Tanouye, E. (1999). Web links give drug reps foot in doctor’s door. Wall Street Journal, B18.

    Google Scholar 

  63. Klein, A. (1999). As cheap printers score, H-P plays catch-up. Wall Street Journal, B1, B4.

    Google Scholar 

Further Reading

  • Chen, S. (2004). Strategic management of e-business (2nd ed.). Hoboken: John Wiley and Sons.

    Google Scholar 

  • Choo, C. W. (2001). Information management for the intelligent organization: The art of scanning the environment (3rd ed.). Medford: Information Today.

    Google Scholar 

  • Davenport, T. H. (2003). What’s the big idea? Creating and capitalizing on the best new management thinking. Harvard Business School Press.

    Google Scholar 

  • Gates, B. (2009). Business @ the speed of thought: Succeeding in the digital economy. New York: Warner Books.

    Google Scholar 

  • Krush, M. T., Agnihotri, R., & Trainor, K. J. (2016). A contingency model of marketing dashboards and their influence on marketing strategy implementation speed and market information management capability. European Journal of Marketing, 50(12), 2077–2102.

    Article  Google Scholar 

  • Meadows, D. H., Randers, J., & Meadows, D. L. (2004). Limits to growth: The 30-year update. White River Junction: Chelsea Green Publishing.

    Google Scholar 

  • Rowley, J. (2016). Information marketing (e-edition ed.). Abingdon: Taylor & Francis.

    Book  Google Scholar 

  • Strauss, J., & Frost, R. (2013). E-marketing (7th ed.). Upper Saddle River: Pearson Education.

    Google Scholar 

  • Tiwana, A. (2002). The knowledge management toolkit: Orchestrating IT, strategy, and knowledge platforms (2nd ed.). Upper Saddle River: Pearson Education.

    Google Scholar 

  • Uldrich, J., & Newberry, D. (2003). The next big thing is really small: How nanotechnology will change the future of your business. New York: Crown Business.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Graduate School and McDonough School, Georgetown University, Washington, DC, USA

    Michael R. Czinkota

  2. International Business and Strategy, University of Kent, Canterbury, UK

    Michael R. Czinkota

  3. Professor of Marketing and International Business, Waseda University, Tokyo, Japan

    Masaaki Kotabe

  4. University of Hawaii at Manoa, Honolulu, USA

    Masaaki Kotabe

  5. Professor of Strategic Marketing Management, Vice Rector for Faculty and Research, University of Nicosia, Nicosia, Cyprus

    Demetris Vrontis

  6. Senior Lecturer in Marketing, Newcastle Business School, Northumbria University, Newcastle upon Tyne, UK

    S. M. Riad Shams

Authors
  1. Michael R. Czinkota
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Masaaki Kotabe
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Demetris Vrontis
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. S. M. Riad Shams
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Michael R. Czinkota .

Rights and permissions

Reprints and permissions

Copyright information

© 2021 Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Czinkota, M.R., Kotabe, M., Vrontis, D., Shams, S.M.R. (2021). Understanding the Market Environment and the Competition. In: Marketing Management. Springer Texts in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-66916-4_3

Download citation

Publish with us

Policies and ethics

Search

Navigation