Things that effect the Environment of Your Business
It is important to identify the competition in any market. Competition is when one business works against another business for sales. Cricket and Pocket were big competitors in the cellular phone market. They both offered the same phone plans and easy pay options that were becoming more popular. At either company you could get a free phone just by switching from the competitor. The two companies eventually merged to make one good cellular company. By reducing the competition the company can better control the price of their cellular services. While this is great for the business, it hurts consumer who can no longer change companies in order to find a more competitive price.
Since the economy influences the price of products, it is important to take into consideration the economic environment of the marketplace. Just in the United States, for example, there are differences in economy from region to region.
As people’s tastes change, businesses must also modify their marketing strategies or revolutionize their products to stay viable. Businesses must be able to quickly adapt to changes consumer tastes in order to stay productive. That is why identifying changes in sociocultural environments is important for businesses. One drawback of our ever-changing society is that companies spend a lot of money on new marketing strategies to keep up with our tastes; however it is the consumer who pays the price for this. Sometimes, like in the case of New Coke, the majority of consumers aren’t even happy with the change.
New technology can change markets rapidly so every business should be aware of these variables. Rise of new technology makes old technology obsolete. As well, marketing of new technology in areas that lack the infrastructure just doesn’t make sense.
Political legal environment in which a business operates effects the way businesses are ran in many ways. Many governments have strict controls over imports and exports as well as marketing strategies. There are also lobbyist and other social groups that work together to sway political opinion.
Demographic variables such as the sex, age, or race of your target consumer effects marketing strategies. Paying close attention to demographics allows companies to reach a target audience more easily.
The natural environment includes natural resources, like natural gases, crude, cotton, livestock etc. The price of crude has an enormous influence on the nation’s gas prices.
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