Discuss the external environment of marketing and explain how it affects a firm.
The external marketing environment consists of social, demographic, economic, technological, political and legal, and competitive variables. Marketers generally cannot control the elements of the external environment. Instead, they must understand how the external environment is changing and the impact of that change on the target market. Then marketing managers can create a marketing mix to effectively meet the needs of target customers.
What is the purpose of environmental scanning? Give an example.
Environmental scanning is a process through which environmental information is regularly collected and evaluated. The external environment in which a firm operates is very dynamic. Its elements keep changing. Environmental scanning helps firms in analysing these changes so that they can create a more effective marketing mix.
For example, the external market elements are analysed to determine the optimum ways to influence the target market of a firm. Upon analysis of the external market the firm changes and molds its marketing mix so that it better suits the needs of the target segment.
The purpose of environmental scanning is to identify market opportunities and threats. For instance, the political , legal, demographic and economic scenario of the market is analysed to identify suitable business opportunities.