Different environment components

The Internet introduces new facets to the environment that must be considered by marketers since strategy development is strongly influenced by considering the environment the business operates in. Figure 2.3 illustrates the key elements of a business's environment that will influence the organisation. Many authors such as Porter (1980) on corporate strategy or Kotler et al. (2001) on marketing strategy make the distinction between

Micro-environment

Specific forces on an organisation generated by its stakeholders.

Macro-environment

Broader forces affecting all organisations in the marketplace including social, technological, economic, political and legal aspects.

micro-environment and macro-environment. The micro-environment, sometimes known as 'the operating environment' is the immediate marketplace of an organisation. For development of Internet marketing strategy, the most significant influences are arguably those of the micro-environment. This is shaped by the needs of customers and how services are provided to them through the competitors, intermediaries and upstream suppliers within the marketplace. The Internet and electronic communications have major implications for organisations and these must inform their Internet marketing strategy. We consider the changes to the micro-environment and their implications in this chapter.

Macro-environment

International

Economic factors Legal constraints • Cultural factors

Technology

Micro-environment

Organisation

Organisation

Country specific

• Economic factors

• Legal constraints • Cultural factors

Society

• Public opinion i Moral constraints Ethical constraints

Suppliers

Suppliers

Competitors

Intermediaries

Customers

Customers

Figure 2.3 The Internet marketing environment

The macro-environment is sometimes known as 'the remote environment'; its influences which we study in Chapter 3 are broader, being provided by local and international economic conditions and legislation together with acceptable business practices. The Internet and electronic communications have also introduced major changes to the macro-environment. Reviewing the relevance of technological innovations to an organisation is vital in providing opportunities for superior services to competitors and to changing the shape of the marketplace. Another significant macro-environment influence is legal, specific laws have been enacted to control online marketing and of course the influence of new technologies.

In the current chapter, the impact of the Internet on the different elements of the micro-environment illustrated in Table 2.1 will be reviewed in turn. In the next chapter we then review the constraints and opportunities of the Internet macro-environment. For each of these elements we will highlight the issues that a marketing or Internet marketing manager needs to consider when developing e-marketing plans.

Table 2.1 Factors in the macro- and micro-environment of an organisation and Internet-marketing-related issues
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