Topic One: The Marketing Environment
1. What is meant by the term marketing environment?
The marketing environment consists of the actors and forces that affect a company’s capability to operate effectively in providing products and services to its customers. It is useful to classify these forces into the micro-environment (customers, competitors, distributors and suppliers) and the macro-environment (political and legal, economic, social/cultural, technological, environmental, legal forces). These shape the character of the opportunities and threats facing a company and yet are largely uncontrollable. 2. Explain the difference between the macro and micro marketing environments. The micro-environment consists of the actors in the firm’s immediate environment that affects its capabilities to operate effectively in its chose markets. The macro-environment consists of a number of broad forces in the firm’s immediate environment that affects not only the company but also the other actors in the microenvironment. 3. Outline and explain the difference elements of the macro marketing environment Traditionally four forces—political/legal, economic, social/culture and technological, ecological/physical—have been the focus of attention. However, the growing importance of ecological/physical forces on companies has led to the acronym being expanded to PEEST Analysis 1). Political and legal forces can influence marketing decisions by setting the rules by which business can be conducted. In Europe, marketing decisions are affected by legislation at EU and national levels. EU laws seek to prevent collusion, prevent abuse of market dominance, control mergers and acquisitions, and restrict state aid to firms. 2). The economic environment can have a critical impact on the success of companies through its effect on supply and demand. Companies must choose those economic influences that are relevant to their business and monitor them. Key factors are economic growth,...
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