The Marketing Environment

The marketing environment includes all the factors that affect a small business.

The internal marketing environment refers to the company: its existing products and strategies;

culture; strengths and weaknesses; internal resources; capabilities with respect to marketing,

manufacturing, and distribution; and relationships with stakeholders (e.g., owners, employees,

intermediaries, and suppliers). This environment is controllable by management, and it will

present both threats and opportunities.

The external marketing environment must be understood by the business if it hopes to plan

intelligently for the future. This environment, not controllable by management, consists of the

following components:

• Social factors. For example, cultural and subcultural values, attitudes, beliefs, norms, customs, and

lifestyles.

• Demographics. For example, population growth, age, gender, ethnicity, race, education, and marital

status.

• Economic environment. For example, income distribution, buying power and willingness to spend,

economic conditions, trading blocs, and the availability of natural resources.

• Political and legal factors. For example, regulatory environment, regulatory agencies, and self-

regulation.

• Technology. For example, the nature and rate of technological change.

• Competition. For example, existing firms, potential competitors, bargaining power of buyers and

suppliers, and substitutes. [14]

• Ethics. For example, appropriate corporate and employee behavior.