Digital marketing is a cost-effective methodology for reaching and connecting with large potential audiences or customers, targeting prospects, and promoting products and services. Therefore, businesses must understand the digital marketing environment better to make informed business decisions to achieve success.
Macro-Environment vs. Micro-Environment
The digital marketing environment consists of two key components: macro-environment and micro-environment. They can influence an organization’s performance, growth, response, existence, and success in a competitive market.
According to Dave Chaffey and Fiona Ellis-Chadwick’s book, Digital Marketing Strategy, Implementation, and Practice (7th ed., 2019), the macro-environment consists of external factors or forces such as technology, culture, political/legal, social, demographic, and economic beyond the organization’s control. Macro-environment can indirectly impact an organization’s success, strategy, decision-making processes, business performance and significantly influence digital marketing.
Moreover, businesses must stay abreast of and track changes relative to the macro-environment to create and improve strategies to conduct business operations and make informed business decisions efficiently.
The micro-environment focuses on the needs and wants of customers. Daily operational activities and marketing decisions are impacted directly by critical factors of the micro-environment, including customers, intermediaries, competitors, and suppliers. Furthermore, their role, interactions, and behaviors influence an organization’s response to demands and their performance in the market online.
Consequently, it is critical for businesses to gain insight and understand the changing needs and wants of their customers to develop and modify their digital marketing strategies to better satisfy their customer’s wants and needs.
While micro-environment and macro-environment appear to be contradictory, they are complementary and portray an overall view of the business’s marketing environment. Organizations need to consider both components of the digital marketing environment when making informed business decisions. Failure to do so may cost the business millions.
For instance, in 2006, when Walmart, an American multinational globally recognized retail corporation, decided to expand its target market in Germany, they failed or neglected to consider the German culture and interests, wants, and needs of the customers and audience in Germany in their marketing strategy costing the organization a loss in revenue in over $1 billion. Walmart brought in their product and American model into the German market without carefully considering the customers and their behaviors and interactions related to culture and the customer’s purchasing habits.
Culture is critical for businesses to understand customer behaviors and needs.
The components of the digital marketing environment enable organizations to identify their strengths, weaknesses, opportunities, and threats.
The digital marketing environment enables businesses to cultivate successful quality relationships with their customers.
Understanding and considering both components of the digital marketing environment, macro-environment, and micro-environment, can aid businesses to connect and build relationships with their customers, increase profitability, and improve a marketing campaign’s success and a brand’s reputation long-term efficiently and effectively.