Techniques for environmental Scanning

Knowledge of environmental factors is important. But what is more important is the ability of the marketer to forecast these changes. Forecasting skills therefore, also become important. Verbal and written information are other techniques. Sources of verbal information include:

1. Radio and television reports;
2. Firm’s employees like peers, subordinates and supervisors;
3. Customers;
4. Financial institutions;
5. Consultants;
6. Internet Surfing.

Written information is often available through trade and industry journals, business magazines and financial newspapers. Also, government publications are a good source of environmental information.

Another technique for environmental scanning is to design an appropriate marketing information system (MIS) and also to periodically conduct market research. Further, techniques like Delphi, Extrapolation and Regression analysis can also be used for forecasting environmental changes.

Spire approach: Integrating environmental forces into strategic decisions though a novel approach called SPIRE (Systematic probing and Identification of the Relevant Environment) is the essence of Klein and Newman’s recommendations to a strategist. This approach, which may seem tedious at times, reduces the risk of overlooking potentially important environmental factors. The probing and identification is extended to variables that have clear, operational meaning to managers. The aim of the approach is not to forecast environmental factor’s behavior, but is to flag the relevant environment and spell out its potential impact on identified operations. The steps involved in the SPIRE approach are:

1. Opening possible interactions through a matrix which sets out a detailed list of environmental variables and strategic marketing components.

2. The next stage in SPIRE is to identify these impact linkages between environmental variables and other strategic marketing components. The possible effect of each factor on each component is considered. In some cases, these impacts will be clear and strong. For example, the impact of technology in the form of Automatic Teller Machines (ATM) is clearly visible on the banking industry. Likewise the impact of this external variable is visible in electronics and consumer appliances industry. The identification of these impact linkages is the most time consuming but it is this step that builds up the bridges between the forecasts and strategic action plans.

3. The impact-linkages will reveal clusters when arrayed on the matrix. Some strategic components will tend to respond together and some environmental factors will influence all the components. These clusters form the basis of forecasts as they are the relevant environmental factors which need the attention of marketer and other decision makers in the organization.

4. An important aspect of this approach is the involvement of decision maker at all these stages.

The benefits of the SPIRE approach are that it increases sensitivity of decision maker; helps in generating creative ideas; forecasts can be used in actual decision making; and a framework is established for rapid assimilation of unexpected environmental changes.