Local marketing environment
It is general marketing environment which consists of political, economic, legal, social and cultural environments. All this elements have big influence on marketing decisions and their implementation. Very important characteristic of economic environment is GDP per capita. In Latvia it is about $16,000. But also very important is distribution of national income across social groups. It is often measured using Gini coeficient – ratio with values between 0 and 1. In Latvia it is 0.32, so inequality of wealth distribution exists, but it is not so high like in some African countries ( 0.6-0.7). For instance in Belgium it is 0.25 – income equality is higher. In some cases it is very important to estimate informal sector (moonlighting and non registered enterpreneurs). If you want to sell cigaretts in the East part of Latvia it is important to know that very big part of smokers buy illegaly imported cigaretts from Russia. Because they are much cheaper. Political environment is often associated with political risk: nationalization, contract revocation, repatriation of funds, threats to expatriate personnel etc. Democracy is generally concidered as the most favourable marketing environment, because consumers have freedom of choice. …
