Macroenvironmental Factors in E-Commerce

Macroenvironmental Factors

• Electronic commerce (e-commerce) involves using electronic communication for inventory, promotion, distribution, purchase, and exchange of products and services.
• Macroeconomic concerns include inflation and recession.
• Inflation leads to increased production and buying costs, potentially decreasing consumer purchasing power.
• Recession involves slow economic activity, rising unemployment, and decreased consumer spending.
• Regulatory forces, including laws, restrict business activities and influence marketing and business decisions.
• Competition protection and consumer protection are key areas of legislation and regulation.
• Consumerism empowers consumers to influence businesses and institutions.
• Social and national trends shape consumer values and influence marketing opportunities and threats.
• Green Marketing emphasizes environmentally friendly products and services.
• Privacy concerns arise from the abundance of accessible consumer information online.
• Time-poor societies face challenges in capturing consumer attention due to busy schedules and numerous media options.
• Health and wellness concerns are prevalent, especially related to children's health.

Competitive Forces

• Competition forms include pure competition, monopolistic competition, oligopoly, and monopoly.
• Pure competition features similar products from multiple companies, with distribution playing a key role.
• Monopolistic competition involves many sellers competing with substitutable products.
• Oligopoly occurs when a few companies dominate industry sales, often competing through non-price mechanisms like product quality or distribution.
• Monopoly exists when only one firm sells a specific product or service.
• Marketing plays a smaller role in monopolistic settings due to government regulation.
• Factors driving competition include entry barriers, bargaining power of buyers and suppliers, existing competitors, and substitution possibilities.
• Entry barriers can include capital requirements, advertising expenditures, product identity, distribution access, or switching costs.
• Powerful buyers exert pressure for price competition due to low switching costs or product significance.
• Intense competition exists in slow-growth industries for market share gains.
• Small businesses form the majority of the competitive landscape, contributing significantly to economic growth and job creation.
• Pure-play online competitors exist solely in the online space, often targeting specialized or niche markets.

Economic Environment Analysis for Marketing Strategy Development

• The global economy has experienced significant integration, with the European Union and North American Free Trade Agreement being highly integrated.
• Global competitors often replace or absorb local ones.
• Economic systems include Market Capitalism, Centrally Planned Socialism, Centrally Planned Capitalism, and Market Socialism.
• Market Capitalism relies on individual and firm resource allocation, private ownership, consumer-driven demand, and government promotion of competition.
• Centrally Planned Socialism features state control over resource allocation, production, and distribution, with limited consumer choices and minimal reliance on marketing strategies.
• Centrally Planned Capitalism combines command resource allocation with private ownership.
• Market Socialism allows for market-allocation within a state-ownership framework.
• Economic freedom rankings classify countries based on factors like trade policy, taxation, capital flows, banking policy, wage and price controls, property rights, and black market activity.
• The World Bank categorizes economic development stages based on Gross National Income (GNI), including Low-Income Economies, Lower-Middle-Income Economies, Upper-Middle-Income Economies, and High-Income Economies.
• Gross National Product (GNP) or Gross National Income (GNI) represents the total value of goods and services produced by a country's residents.
• Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders.