Principles of Marketing MGT301 Assignment No.1 Fall 2020

 

Economic Environment:

Economic factors have a significant impact on how an organization does business and also how profitable they are. Factors include - economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses and so on. The economic environment of a business will play a pivotal role in determining the success or failure of a business. Let's first consider some macroeconomic factors. If interest rates are too high, the cost of borrowing may not permit a business to expand.

Technological Environment:

Technological environment refers to the state of science and technology in the country and related aspects such as rate of technological progress, institutional arrangements for development and application of new technology, etc. Technological environment changes very fast. Businesses are affected by changes in the technological environment. Technological change offers risks, opportunities and threats to businesses. Some businesses can leverage changing technology to improve products and processes or even create new products and processes that will expand markets and profits.

1.      New ways of producing goods and services

2.      New ways of distributing goods and services

3.      New ways of communicating with target markets

Political and Legal Environment

The political environment may determine what laws and regulations affecting specific marketers are enacted and how much the government purchases and from which suppliers. It can also be important in helping organizations secure foreign markets. These changes can be economic, legal or social and can include the following factors: Tax and economic policies: Increasing or decreasing rate of taxes is a good example of a political component Government regulations may raise the tax rate for some businesses and can lower the same for others due to specific reasons.

Cultural Environment

Cultural environments are a remarkable cultural, social and economic resource. They are important for the identities and well-being of people. Guttural environments and the features particular to them provide a unique edge to regions and places, serve as the foundation of the development of local communities and create business opportunities. The cultural environment is made up of institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors. Certain cultural characteristics can affect marketing decision-making. Persistence of cultural values. People's core beliefs and values have a high of degree of persistence. Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government.