External Marketing Environment Essay Example | Topics and Well Written Essays - 1250 words

External Marketing Environment - Essay Example A firm is frequently oblivious to the factors that affect its future. A marketer can comprehend the marketing environment through conducting a marketing research. Acquaintance to the environment assists an organization to modify its promotional mix and recognize new opportunities. Lamb et al (2011, p. 110) cite economic, cultural and social, business, legal and political and demographic elements as the constituents of the external marketing environment. Economic Environment There is no more significant component in the external environment affecting marketing than the economic environment. Lamb noted that the affects the operation of a company on both at micro and macro levels. Micro-level refers to the individual company while the macro level implies the broader industry, country or international. i. Supply and Demand When there is the absence of government intervention and control, supply and demand are the basic underlying forces of the economic dimension. Supply refers to the num ber of goods and services sellers and producers are willing to bring to the market at given prices at a given time (Lamb et al., 2011, p. 112). Demand, on the other hand, refers to the number of goods and services the buyers are willing to buy at a given price and time. ... When such a situation occurs, there is either a shortage or a surplus. In a competitive market structure, when a surplus or a shortage occurs, changes occur until equilibrium is restored. In the case of a surplus, the price is usually lowered to meet the demand level in the short run. In the long run, either the supply will decrease, as the quantities offered are decreased by some firms making production cuts or by other firms going out of business. When a shortage occurs, a company must carefully assess whether this condition id temporary or is actually a market need not being satisfied. ii. The Market and Exchange In every market economy there is a way for the market equilibrium price and quantity to be achieved. The mechanism for doing this by bridging the gap between supply and demand is the marketplace itself. Marketplace bridges the gap between what is produced and what is consumed, making the right quantity available to meet the market need (Lamb et al, 2011, p., 113) iii. Gen eral Economic Change The economic conditions in a country and the state of national economy change over time. Movements and fluctuations in the economy often follow patterns and have been described as business cycles (Lamb et al, 2011, p. 113). These cycles historically have consisted of four stages which include recession, prosperity, depression, and recovery. Cultural and social Environment In reference to Lamb et al (2011, p. 114), the cultural-social environment is replicated in the other four major environments external to the organization’s marketing mix.