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WHAT ARE THE EXTERNAL FORCES THAT HAVE AN IMPACT ON MARKETING?

Decisions about the marketing mix are influenced by conditions that exist beyond the company’s control. Essentially, there are six key external influences: the economy, competition, social trends, demographic trends, technology, and laws and regulations.

HOW DO THE ECONOMY, COMPETITOR ACTIVITIES, AND SOCIAL CHANGE INFLUENCE MARKETING STRATEGY?

The general state of the economy will influence how aggressive or how conservative an organization’s marketing strategy may be. The marketer will adjust marketing strategies based on fluctuations in the economy (e.g., recession versus recovery). If the economy is in a recession the marketer will be more cautious and perhaps spend less on marketing. In recovery, the manager may be more aggressive and spend more on marketing.

An organization’s position or relative strength in a market (leader, challenger, follower, or nicher) also has an impact on marketing strategy. Leaders and challengers are typically aggressive with their marketing strategies. Followers and nichers tend to have fewer fi nancial resources and spend only what is appropriate to maintain their market position.

Healthier lifestyles and a societal desire for environmental conservation impact marketing strategies. Products that promote healthier living will be successful. Organizations that demonstrate social responsibility will also succeed. Consumers and the public at large are more accepting of organizations that support worthwhile causes and implement programs that show a genuine concern for the environment. Smart marketing organizations tell people what they are doing in these areas.

HOW DO DEMOGRAPHIC TRENDS, ADVANCING TECHNOLOGIES, AND LAWS AND REGULATIONS INFLUENCE MARKETING STRATEGY?

Demographic trends must be monitored closely. An organization must be aware that Canada’s population is aging, household formations are changing, the level of education is increasing, wealth and spending are concentrated among higher income groups, the population is now more ethnic in nature, and there is a trend toward living in urban areas. These trends present both opportunities and challenges for marketers and will guide the direction of future marketing strategy. Technology will have a strong and direct impact on marketing. More organizations will adopt database management techniques and implement customer relationship management programs. Marketing communications will shift in the direction of digital communications and away from the mass media. The growth of e-commerce strongly suggests that web-based marketing strategies be integrated into an organization’s marketing strategy.