A marketing environment contains the elements that influence how businesses and individuals buy and sell products and services. These elements may vary by location, industry, product and market, but they usually include social influences, such as demographics and culture; economics; and political and legislative trends. Businesses try to anticipate trends and changes in the marketing environment to establish positions in new markets, withdraw from shrinking markets and introduce new products and services to emerging markets. Businesses that fail to adapt to changes in the marketing environment often struggle to compete effectively.

Demographics

Demographics tell marketers details about who is buying or should be buying their services and products. Ethnicity, age, lifestyle, housing, household composition, income and education are just a few demographic points that marketers track, and to which they must respond. For instance, a demographic trend toward rural living creates new market opportunities and may influence site location decisions for brick-and-mortar retailers. Those retailers may decide to offer different products, such as livestock feed and farm implements, to customers in these new rural markets. An aging population may cause mortgage lenders to introduce reverse mortgages into their portfolio of services.

Culture

Cultural complexity in large markets such as the United States often drives product and service diversity, says Prof. Bill Bearden of the University of South Carolina. The fashion industry may find opportunities in the growing numbers of children of immigrants, who adopt American lifestyles while retaining some of the traditional dress of their homelands. In the Northeast and Northwest, a large, young self-sufficiency movement has influenced decisions by some seed companies to offer heirloom and open-pollinated seeds and to start up seed exchanges among their customers. Campbell Soup Co. downsized its marketing efforts in Poland when cultural preferences for homemade soup proved too strong to overcome.

Economics

Economic trends can be local, regional or even global, and may cause marketers to increase or decrease spending depending on the buying power in each marketplace. In the United States, burgeoning student loan debt among young people, coupled with the foreclosure crisis of the mid to late 2000s, is a long-term economic trend that has prompted furniture makers to reduce their marketing emphasis on expensive home furnishings and produce and market more inexpensive, apartment-sized furnishings. A fast-growing middle class in India prompted marketers of such brands as Frito Lay, Coca Cola, Motorola and Walt Disney to shift marketing resources into that country to reach some 250 million potential new customers.

Legislative Influences

Politicians can create and eliminate market opportunities through embargoes, treaties, tariffs and regulations. Some industries, such as pharmaceuticals, are heavily regulated to protect consumers. Marketers may have to respond quickly to legislation imposing limits on advertising and promotion, as occurred with tobacco products, and find new, legal ways to reach potential customers. When politicians facilitate market activity -- for instance, dropping the trade embargo against South Africa -- marketers must decide quickly how to enter which new markets with what products at what price using what media.