The Influence of the External and Internal Business Environment on the Marketing Strategy and Their Impact on the Marketing Performance

Hery Erdi ,R Bambang Bc

doi:10.7176/ejbm/13-7-06

Abstract

One of the challenges faced by palm oil companies in Indonesia is how they can maintain and increase sales of palm oil at a price and acceptable manner. For this reason, one of the efforts the companies must take is to adopt an effective marketing strategy that is in line with the company’s business objectives. Marketing strategy has a strategic role, however, research on the factors influencing marketing strategy adoption and its impact on marketing performance is still relatively limited. This study aims to examine the influence of the external and the internal environment on the adoption of marketing strategy and their impact on marketing performance. This study used a survey method and a questionnaire to collect data relevant to the research objectives. The samples involved were 125 oil palm companies located in South Lampung Province of Indonesia. The findings indicate that both the external and the environment have a significant positive effect on marketing strategy and performance. The finding is in line with the notion that the business environment, marketing strategy, and marketing performance are positively correlated. The findings also indicate that product, price, promotion and distribution-based marketing strategies have a positive effect on the marketing performance. The findings imply the importance for companies in aligning their adopted marketing strategy with the external and internal environmental aspects in an effort to reach their goals effectively. Keywords: business environment, marketing strategy, marketing performance, Indonesian palm oil companies DOI: 10.7176/EJBM/13-7-06 Publication date: April 30 th 2021

Highlights

The main objective of a company’s operations in general is to increase its profits from one period to the because an increase in revenue will increase the sustainability of the company
This study aims to examine the influence of the external and internal environment on the adoption of marketing strategies and their impact on marketing performance in oil palm companies in South Lampung Province
The findings of this study indicate that the legal-political conditions, national economy, socio-culture prevailing in the community, and global technological developments have a significant positive effect on the marketing strategy and performance of oil palm companies in South Lampung Province

Summary

Introduction

The main objective of a company’s operations in general is to increase its profits from one period to the because an increase in revenue will increase the sustainability of the company. The increase in profit is highly dependent on the firm performance through its functional performance, such as marketing, finance, and human resources performance. The combination of these functional performance will determine the firm performance on the whole. Business performance is influenced by the business environment, as well as by the human resources quality working in the company. These businees environment includes economic, social and culture, government policy, law, economic globalization, and use of technology (O'Cass & Julian, 2003). Such conditions have forced many companies to develop strategies in accordance with their environmental conditions in an effort to improve company performance in order to compete in the market (McCarthy et al, 2012)

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