One Component of the External Environment Marketing Managers Must Understand

question 22

Essay

One component of the external environment marketing managers must understand and react to is the economic environment. Briefly describe the four economic areas of greatest concern to marketers and the marketing implications of trends in these four areas.

---

Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses are deducted, indicating how much revenue is contributing to fixed costs and profit.

Automated Factory

A production facility that relies heavily on automated processes and machinery to manufacture goods with minimal human intervention.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, insurance, and salaries.

Variable Expenses

Expenses that change in proportion to the activity of a business, such as sales commissions that rise with increased sales or materials costs that rise with increased production.