Page 82 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 4: Retailing Structure

cannot always affect environmental forces. However, smart managers can take a proactive, Notes
rather than reactive, approach to the marketing environment. As marketing management collects
and processes data on these environments, they must be ever vigilant in their efforts to apply
what they learn to developing opportunities and dealing with threats. Studies have shown that
excellent companies not only have a keen sense of customer but an appreciation of the
environmental forces swirling around them. By constantly looking at the dynamic changes that
are occurring in the aforementioned environments, companies are better prepared to adapt to
change, prepare long-range strategy, meet the needs of today’s and tomorrow’s customers, and
compete with the intense competition present in the global marketplace. All firms are encouraged
to adopt an environmental management perspective in the new millennium.

Did u know? Being successful means (1) being able to adapt the marketing mix to trends
and changes this environment. (2). Changes in the marketing environment are often quick
and unpredictable. (3). The marketing environment offers both opportunities and threats.
(4). The company must use its marketing research and marketing intelligence systems to
monitor the changing environment. (5). Systematic environmental scanning helps
marketers to revise and adapt marketing strategies to meet new challenges and
opportunities in the market place.
The external environment of the Arm consists of those factors outside the retail firm that affect
the success of the retail business. The external environment can be divided into the
macroenvironment and the microenvironment. The macroenvironment comprises the wider
political, economic, social, cultural and technical forces that affect the industry and the way
people shop. These factors are summarized in the table given below:

The Greek Alphabet

Table 4.1: Macroenvironmental Influences

Factor Includes
Political and legal Consumer protection, equal rights, safety at work, working hours, the
minimum wage
Economic Disposable income, gross domestic product, unemployment, interest
rates, inflation
Sociocultural Social class, reference groups, culture, subculture
Technological Products, processes, production, information handling, management
Demographic Age, sex, marital status, household size education, geographic
location
Physical Product availability, air and water quality, visual clutter, noise
pollution

The micro environment comprises those factors that originate outside the retail firm, but which
the retailer can affect through its management processes. They include the actions of suppliers
and other intermediaries and the location, accessibility and size of customer markets. These
factors determine the number of customers in a gore, but a retailer such as Theo may attract
more customers by offering a better level of service than its competitors. Table below summarizes
these.

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