Focusing on just two external environmental areas from the economic, social, political and legal environments, analyse the key forces and trends that have taken place within these two environmental areas over the past decade.

Introduction

Marketing concept as outlined by Kotler and Levy (1969), is perceived by most as an undertaking to find and stimulate buyers to achieve a firm’s goals. The process entails product development, pricing, distribution, communication as well as continuous attention to the changing needs of the customers, and the development of new products to meet these needs. The implication of this change is that an organization is inevitably influenced by, and has to react to what happens outside the business.

There are several external environments that may impact an organization, including economic, social, political and legal factors. Organizations utilize environmental scanning processes to focus on identification of emerging issues, situations and potential pitfalls that may affect an organization’s future (Albright, 2004).

Analysis of the economic environment

The economic environment is very dynamic and complex in nature and is influenced by the purchasing power and spending patterns of consumers. The economic environment is also shaped by rates of unemployment, inflation, gross national product, trade cycles, economic resources and exchange rates. Information relating to economic trends or forces can enable organizations to prepare for changes in these and adjust marketing activity to suit evolving circumstances (Albright, 2004). Kalman et al. (1973) agree that economic conditions are of prime importance to organizations and the impact of changing economic conditions is reduced if the organization is prepared for them.

One of the key forces shaping the economical environment is economic growth and decline, which directly