The external environment is considered to be a far environment, therefore can neither be controlled nor influenced. This environment consists of Social, Legal, Technological, Economical and Political factors.
For Manchester Airport these are: -
1.Social – Demographics, Seasons, environmental issues.
2.Legal – Legislations.
3.Economic – Boom/bust cycle, interest rates, taxation and Government expenditure. 4.Political – The Government and legislation.
5.Technological – Information technology.
Fig 1, Current environmental issues
The social factors include population factors of age, occupation, lifestyle and wealth distribution. These can all have major impacts on businesses. Age population can determine whether people will travel close to home or further away, as younger people have families, which means there is a budget attached to their spending. Older people tend not to have a young family to cater for and have a larger disposable income.
Occupation determines a person’s lifestyle through their earnings and thus their wealth distribution.
Seasons affect the travel industry as most people prefer to travel in the summer for the warmth; therefore it is seen as a peak period for Manchester Airport.
Environment issues arise as the Airport wishes to be seen as caring for the local area to boost popularity. Therefore concern over pollution must be regarded as a priority.
Legal factors for the Airport include legislations on security, noise, air pollution and waste management by the Government and EU Directives. This does has implications on operations through the cost involved. For example, the EU Directive on the maximum weekly working hour of 48 hours per employee and waste management, resulting in overall performance being influenced.
The Economic factors of the boom/bust cycle are the affects of the 8 year cycle of national economies going into recession. This means production shrinks, so jobs are lost and people have less disposable income to spend.
Interest rates rising tend to reduce demand as mortgage and credit charges rise.
Taxation increases (or expenditure cuts) mean there will be less money for consumers to spend resulting in a shrink in demand.
Expenditure increases (or reductions in taxation) result in more money for the economy and rise in demand.
Politically the Airport needs to respond to the prevailing political climate and adjust the marketing policy accordingly.
EU laws are hard to influence or control, but Politicians can be influenced by lobbying over their laws.
Security laws must be followed to ensure the safety of customers. This does bring high expenditure as stated in Flying to the Future, B202 DVD.
Technologically Information Technology is vital to the smooth running and communications of the Airport at all levels. The system needs to function well, be reliable and staff need to be fully trained in this, which brings more cost.
Fig 2, Micro- and Macro-environmental forces diagram, Essentials of Marketing, Third Edition by Jim Blythe.
The macro-environment issues can have a huge impact on the company and its micro-environment and it tends to be difficult to influence. This is why the Airports policy should be seen as operating within a rapidly changing environment and must monitor and react to any changes to ensure goals are met.
Marketing managers should be reactive to macro-environment factors. To do this effectively they need to analyse where they are by using a SLEPT situational analysis to examine the strengths and weaknesses of the Airport and opportunities and threats from the external environment. Once this has been...