L3 & 4 Marketing Environment Flashcards
What is environmental scanning
The process of continually acquiring info on events occurring outside the organisation to identify and interpret potential trends
What are the 6 PESTLE macro-environment forces
Political, Economic, Social, Technological, Legal, Environmental/Ecological
Define and describe political factor with an example
Political factors encompass government policies, stability, regulations trade restrictions and tariffs. For example change in trade policies like a reduction in tariffs can provide opportunities for businesses to enter new markets with lower costs
Define and describe economic factor with an example
Economic factors include interest rates, inflation, exchange rates, economic growth and unemployment rates. For example during a recession companies selling non-essential goods may experience decreased demand as consumers cut back on spending.
Define and describe social factor with an example
Social factors involve demographics, cultural attitudes, lifestyle trends and population growth. Shifts in these areas can shape consumer behaviour and preferences affecting demand for certain products.
Define and describe technological factor with an example
Technological factors include advancements, innovation, research, automation and access to digital platforms. Tech changes can lead to new product opportunities and disrupt existing industries. For example the rise of online shopping allows for retailers to reach a wider audience and for customers to shop more efficiently on a digital platform instead of in person.
Define and describe legal factor with an example
Legal factors involve laws, regulations, consumer protection, health and safety standards and employment laws. Businesses must comply with legal requirements for businesses to operate, and changes in laws can create new opportunities or risks. For example changes in labor laws could increase costs for labor intersive industries impacting profitability.
Define and describe environmental/ecological factor with an example
Environmental/ecological factors include weather and climate, environmental policies and pressures from NGO’s. For example a business selling a beach product has more opportunities coming up to summer while some business may be threatened by environmental regulations increasing costs.
What are Porters 5 Forces
- Threats of new products
- Threats of substitutes
- Bargaining power of buyers
- Bargaining power of suppliers
- Rivalry among existing competitors