A2 External Influences
The external impact will have an impact on decisions that you make in marketing.
Social factors include lifestyles and behaviours of people who are your customers or potential customers. This may include people’s taste in fashion, food and diet choices and trends in going out to restaurants and cinemas.
Technological factors affecting business are the developments in IT and communications in the environment in which the business operates. This may include 5G, improvements to machinery and robotics, CAD/CAM, communications technologies such as mobile phones and software such as Zoom.
Economic factors refer to things that influence the flow of money in an economy. This may have an impact on your marketing costs or how much money your customers have available to spend on your goods and services. Examples of economic factors are inflation, interest rates, exchange rates and tax.
Environmental factors refer to aspects of the physical environment that have an impact on business activity. This includes weather, climate change, availability of resources, availability of non-renewable energy and exogenous shocks such as natural disasters.
Political factors refer to how government decisions and control have an impact on business. Laws affect the level of freedom and bureaucracy in a business. Governments can impose tariffs and quotas which affect trading internationally. Other political factors include political stability, freedom of speech and press and levels of corruption.
Legal factors refer to the laws that affect how a business operates. International businesses may need to understand the laws of many different countries. Different governments impose different laws, for example consumer protection law has an impact on marketing activities as it affects the way a business can promote and sell their products.
Ethical factors refer to the moral values and expectations of the community that a business operates in. This can have an impact on the way a business operates as people are increasingly expecting businesses to operate in an ethical manner and there is more attention being brought towards those businesses that don’t. Ethical expectations include fair treatment of staff, honest accounting and paying proper tax, consideration of the environment and fair treatment of suppliers.