Environmental forces: technological, economic, and social

¶ … marketing student, it is important to be aware of the forces that affect the world of business. The most important among them are environmental forces which include technological, social and economic forces. These are part of the external environment. The external environment refers to the forces outside of a person's immediate business concern. This environment affects business activities and has to be taken into account when a marketing campaign is being prepared.

Economic forces

For any business, the economic environment is the cornerstone of business activity. It has to be conducive to business environment in order to make a successful marketing campaign. As the economy passes through the different stages of boom, recession, recovery, the marketers have to adjust their marketing mix accordingly. Some of the major economic variables are business cycles, inflation, unemployment, interest rates, and income and any changes in major economic variables can have significant influence on the market. Interestingly income and spending has a very intricate link and this needs to be studied closely. According to Engel, if income increases, then spending on food decreases and spending on housing remains the same. This is an important relationship that helps marketers develop good marketing campaigns and adjust their marketing mix properly.

How people spend their money is of prime concern to marketers. When income increases or decreases, how it affects spending has to be taken into account. Income fluctuations lead to changes in savings and spending which result in either increased production or higher interest rates etc. When production has to be increased, marketers have to take demand and supply into consideration. When demand is high, it means spending is high as well and that gives marketers even greater opportunity to launch new products or increase the production of their existing products. They can even raise prices and charge a little more. This is because there is now increased supply of money in the market.

Social Forces

Social forces on the other hand refer to the changes in the social fabric of the country. Any social changes such as baby boomers generation or generation Y trends are important for marketers because they offer new opportunities. If suddenly there has emerged a trend among trends to eat out more at cafes, then marketers should be ready and prepared to take advantage of this. New cafes will spring up at lightening speed all over, new products will be made available and related trends will also be exploited in order to gain the maximum out of these social changes.

Technological Forces