POLITICAL ENVIRONMENT
The political environment simply refers to the way a country is being run in terms of politics. The political environment includes all laws, government agencies and lobbying groups that influence or restrict individuals or organizations. All marketing firm may not give same degree of importance to track political trends, however marketing strategies are firmly influenced by development in the political environment. Elected political parties may have negative attitude towards a firm or its industry are more likely to create or enforce regulations that are unfavorable for the firm.
This provides a framework on laws, regulations and government policies relating to legal or regulatory set up. Various regulations and law influences marketing plans. The purpose of these laws and regulations drives many marketers to abide and accept these laws as a predetermined aspect of market planning. It is not right to say legal environment limits for business operations sometimes these laws also create new opportunities for business. Egs: Mandatory Helmets has increased sale of helmets and this has led to creation of plenty of new companies.
COMPONENTS OF POLITICAL ENVIRONMENT AND ITS IMPACT ON MARKETING
- POLITICAL SYSTEM
A political system is a combination of various members of a social organization who are empowered to form the government to make policies, administration, maintaining of order and sanity in the society. There is various form of political systems such as single party, two party and multi-party.
Impact on Marketing Function
Single party government are usually considered as more stable and in most of the case, multiparty and two-party government are unstable i.e, there may be frequent, dramatic and unpredictable regime changes and political unrest. When this happens, companies suffer huge losses as normal bus: Operations may be suspended.
- POLITICAL RISK
Political risk means difficult situation encountered by organization and government as an outcome of political decisions or disruptions that may hurt an investment or business.
Impact on marketing function:
Political risk can have a substantial impact on firms in form of actions like confiscation, nationalization and domestication.
- POLITICAL IDEOLOGIES
Political ideologies refer to way of perceiving, expressing and comprehending views and includes set of ideas, expectations and actions of a political party.
Impact on marketing function
Political parties depending on their ideologies may have negative attitudes towards a firm or its industry are more likely to create or enforce regulations unfavorable for the firm.
- INDICATORS OF POLITICAL INSTABILITY
Political stability is the condition of the government of a country resulting in propensity of an imminent government change, is not directly observable. Political instability is a situation where-by a country is currently going through political turmoil.
Impact on marketing function
The political instability can be ascertained with indicators such as social unrest, attitude of people and policies of the government and may result in death of people and in many cases the country declines in terms of its economic progress. Political instability poses greater risks to business.
- MONOPOLY CONTROLS AND LEGISLATIONS
Monopolies controls are primarily initiated by government in an attempt to regulate, in the public interest. The objectives on controls also include no person or business could monopolize trade or could combine or conspire with someone else to restrict trade. However, this move from the perspective of business may not be so viable.
Impact on Marketing Function
Competition commission of India is a body of the Government of India responsible for enforcing The Competition Act, 2002 throughout India and to prevent activities that have an adverse effect on competition in India.
