Comment on How Changes in Macro and Market Environment Forces Impact on the Level of Competition in an Industry.

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PART 2
Marketing Analysis
3 4 5 6 7 8 The marketing environment Understanding consumer behaviour Understanding organizational buying behaviour Understanding marketing ethics and corporate social responsibility Marketing research and information systems Market segmentation and positioning 72 108 145 180 216 259

CHAPTER

Change is the only constant.

3
1 2 3 4 5

A. TOFFLER



The marketing environment

LEARNING OBJECTIVES
After reading this chapter, you should be able to: describe the nature of the marketing environment explain the distinction between the microenvironment and the macroenvironment discuss the impact of political and legal, economic, ecological/physical environmental, social/cultural and technological forces on marketing decisions explain how to conduct environmental scanning discuss how companies respond to environmental change

Political and Legal Forces
The marketing environment
FIGURE

CHAPTER 3 73

marketing-orientated firm looks outwards to the environment in which it operates, adapting to take advantage of emerging opportunities and to minimize Macroenvironment potential threats. In this chapter, we will examine the marketing environment and how to monitor it. In particular we will Microenvironment look at some of the major forces acting on companies in their macro- and Economic Political / legal microenvironments. Suppliers Customers The marketing environment consists of the actors and forces that affect a company’s Company capability to operate effectively in providing products and services to its customers. As we saw in Chapter 2 it is useful to classify Distributors Competitors these forces into the macroenvironment Social/ Ecological / and the microenvironment (see Fig. 3.1). cultural physical The macroenvironment consists of a number of broad forces that affect not only the company but also the other actors in the microenvironment. Traditionally Technological four forces—political/legal, economic, social/cultural and technological—have been the focus of attention, with the result that the term PEST analysis has been used to describe macroenvironmental analysis. However, the growing importance of ecological/ physical environmental forces on companies has led to the acronym being expanded to PEEST analysis. The microenvironment consists of the actors in the firm’s immediate environment that affect its capabilities to operate effectively in its chosen markets. The key actors are customers, competitors, distributors and suppliers. The macro- and microenvironments shape the character of the opportunities and threats facing a company and are largely uncontrollable. This chapter will focus on the macroenvironmental forces—political/legal, economic, ecological/physical, social/cultural and technological—that affect marketing decisions. Later in the chapter the four dimensions of the microenvironment—customers, competitors, distributors and suppliers—will be introduced and then examined in greater detail throughout the book. The influence of customers on marketing decisions will be discussed in Chapters 4 and 5 and the changing nature of the supply chain examined in Chapter 5. Distribution and competitive forces will be analysed in Chapters 17, and 19 and 20 respectively. 3.1

A

Political and Legal Forces

olitical and legal forces can influence marketing decisions by setting the rules by which business can be conducted. For example, smoking bans in public places can have dramatic short- and long-term effects on the demand for cigarettes. Because of politicians’ power to affect business activities, companies try to cultivate close relationships with them, both to monitor political moods and also to influence them. Sometimes, sizable contributions to the funds of political parties are made in an attempt to maintain favourable relationships. Never has the relationship between political forces and business been more apparent than in the recent ‘credit crunch’, which has forced...
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