A number of forces over which it has little or no control affect a company’s marketing activities. Taken together, they make up its external marketing environment , which includes regulatory and political activity, economic conditions, competitive forces , changes in technology, and social and cultural influences.
What are the five forces in the external marketing environment ? The five forces of the Marketing Environment are Political-Legal environment , Sociocultural environment , Technological environment , Economic Environment and competitive environment .
Environmental regulation may affect market structure by modifying, among other things, the possibility of entry of new firms, exit of incumbent firms and the relative competitive advantage of active firms.
The macro- environment can be divided into 6 parts. Demographic Environment . The demographic environment is made up of the people who constitute the market . Economic Environment . Physical Environment . Technological Environment . Political-Legal Environment . Social-Cultural Environment .
The factors that make up the macro – environment are economic factors, demographic forces, technological factors, natural and physical forces, political and legal forces, and social and cultural forces.
The Macro Environment consists of 6 different forces. These are: Demographic, Economic , Political , Ecological, Socio-Cultural, and Technological forces. This can easily be remembered: the DESTEP model, also called DEPEST model, helps to consider the different factors of the Macro Environment .
They include: Exposure to hazardous substances in the air, water, soil, and food. Natural and technological disasters. Climate change. Occupational hazards. The built environment .
To define strategy, analyze your firm in conjunction with each of Porter’s Five Forces . Threats of new entry. Consider how easily others could enter your market and threaten your company’s position. Threat of substitution. Bargaining power of suppliers. Bargaining power of buyers. Competitive rivalries.
Porter’s Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry’s weaknesses and strengths. Five Forces analysis is frequently used to identify an industry’s structure to determine corporate strategy.
However, there are some differences, many of which are centered on environmental factors which affect international marketing : (a) the economic environment , (b) the competitive environment , (c) the cultural environment , (d) the political/legal environment , and (e) technological environment and the ethical environment .
The Federal Trade Commission enforces false advertising laws at the federal level, and similar agencies have jurisdiction at state level. In light of these regulations, business marketing departments devise advertising campaigns to emphasize only truthful features or benefits of company products.
Environmental regulations have greatly improved air and water quality, especially in areas that were dirtiest before regulation . Reducing airborne particulates is especially beneficial, saving thousands of lives and preventing millions of illnesses each year.
Marketing environment is essential to marketers since it assists them to identify with the needs of their customers, especially regarding how consumers make decisions when purchasing products.
The market environment or business environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful customer relationships. External Micro environment – small forces external the company that affect its ability to serve its customers.
The term ‘ marketing environmental analysis ‘ refers to a strategic analysis tool that helps to identify internal and external environmental factors that affect the organisation’s abilities to work properly. Managers develop the organisation’s structure, culture as well as policies to give clear guidelines to employees.