Reference no: EM132401241

Mentoring Moment: External Forces

Marketing plans and strategies aren't determined unilaterally by any business. Rather, they are strongly influenced by powerful outside forces that are beyond the business's control. These forces can work in favor of your business and enhance its ability to meet customers' wants and needs (not to mention its ability to make a profit), or they can severely limit your company's offerings. 

These external forces in the marketing environment include the political-legal environment, the sociocultural environment, the technological environment, the competitive environment, and the economic environment. Let's take a quick look. 

• Thepolitical-legal environmentconsists of government laws and regulations that have an impact on businesses. Consider the "alphabet soup" of regulatory agencies here in the United States that enforce laws and regulations and impact marketing efforts: the EPA, the FCC, the CPSC, the FDA, and the FTC, to name just a few.
• Thesociocultural environmentalso impacts marketing. Changing social trends, consumer preferences, demographic shifts, and values force companies to develop and promote new products. For example, the increase in the number of two-working-parent and single-parent households has resulted in daycare businesses becoming one of the fastest growing industries in the United States.
• Thetechnological environmentcreates new goods and services and enables firms to produce products more efficiently and less expensively. Other technologies, like the Internet and social media, have significantly changed the way companies communicate with existing and prospective customers.
• In acompetitive environment, marketers must convince buyers that they should buy one company's products rather than another's. The more sellers of a similar product or service, the more competitive the environment in which the firm operates.
• Finally, theeconomic environmentinfluences businesses because factors like inflation, interest rates, unemployment, and economic growth rates impact the willingness and ability of consumers to buy goods and services.

Let's try this out.

Drag the factor into the correct portion of the external marketing environment. When you are done, click Submit.

1. Which environmental type?

Racial and ethnic diversity are increasing.

2. Which environmental type?

The Securities and Exchange Commission is ramping up cybersecurity requirements on financial services firms.

3. Which environmental type?

A manufacturing innovation has made it possible for your company to customize its products at very little additional cost.

4. Which environmental type?

The U.S. dollar is expected to weaken versus other foreign currency.

5. Which environmental type?

A competitor introduced a new product at a trade show.