The external environment of a company includes all the factors that affect the organization but are not under the control of the organization. Normally the external Environment is divided into two parts which are:
- External Macro Environment
- External Micro Environment
The External Macro Environment influences the working of all the companies in an industry. These factors essentially belong to the environment of a country or a region. They can not be controlled or influenced by an organization or even a number of organizations. The various factors that comprise the external Macro-Environment are as follows:
- Political/Legal Factors
- Economic Factors
- Socio/Cultural Factors
- Technological Factors
- Competition in the industry.
Macro environment is all about the major environs around us. It gives us information regarding the main things with in an environment. A marketer must know the value of macro environment as it will give you high benefit in many ways. He must be habitual in working in micro environments but macro environment will give him exposure and more chances of success. This will help him advertise his product in a hi-fi market. This hi-fi market will be accountable for exploring himself in a better way. He must know hat he should be adept in getting habitual with macro environment as he will have more benefit from it.
It is easy to make your place in macro environment but time is a main factor. It always takes time to be specific and choosy in selecting the environment. If a marketer wants to get success in macro environment then he must be fast and efficient. It will be his efficiency and activeness which will pay him off. Let us take an example. If a person is a marketer and he is interested to take advantage of macro environment. He can do it by advertising his product in an efficient manner.
It is defined as large societal forces that affect the micro environment are known as external macro environment. It consists of:
It is the study of human population in term of size, density, location, occupation, age and other statistics. Geographical shifts in population and a better educated and whiter collar people are part of demography.
2: Economic force:
It affects the consumer buying power and spending pattern. In economic sense the key market influences consumer income. The management needs to be aware of the expenditure pattern of consumer at various income levels. Major economic variable such as income, interest rate, tax policy plays important role in determining the success of any company marketing system.
Economic forces related to consumer's upper class, middle class, working class and underclass as well to market inflation, interest rate and taxation policy.
It consist of brand competition for similar product for example Pepsi and coca cola, Sony and Philips, waves and dawlance etc. and also substitute products for example, petrol and CNG, tea and coffee etc.
4: Social and cultural forces:
It includes standard of living, religion, fashion, civilization, education etc. for example; vine is prohibited in social, cultural and religion. It changes from country to country and from province to province, from village to village and from particular region to region etc.