The economic and technological environment affects the way firmsand the whole economy use resources. The economic environment is affected by the way all the elements of the macro-economic system interact. The complex web of economic forces affecting business must be taken into consideration by marketing managers. The economic environment can change very rapidly. In periods of rapid business decline, even a well-planned marketing strategy may fail.
Interest rates are the charge for borrowing money lenders use to make a profit.
Interest rates can go up sharply in times of high inflation, which makes the cost of all goods more expensive. Even cash purchases are affected because the worth of cash in terms of buying power declines during high inflation. The economies of the world are increasingly connected. Whereas managers traditionally looked to their home countries for key competitors, now competition can come from almost anywhere. These rates change daily and their relative levels have implications for planning strategy in relation to profit, countertrade, and even barter.