Final answer:
The marketing system indeed covers major interacting components that are both internal and external to a firm, such as internal marketing strategies and external factors like market structures, technology, globalization, and competition.
Step-by-step explanation:
The statement "The marketing system identifies the major interacting components, both internal and external to the firm" is indeed true. The marketing system of a firm is broad and multifaceted, encompassing various internal components like the firm's marketing strategy, product development, and customer relations, as well as external components such as market structures, competition, globalization, technology, supply and demand, and trade regulations.
Market structures and competition are critical external factors. In a competitive market, the forces of supply and demand determine prices and available quantities of goods and services. These structures can vary based on the degree of competition, influencing a firm's power over product pricing. Moreover, the concept of absolute and comparative advantage encourages specialization and facilitates global trade, which, when coupled with the removal of trade barriers, impacts marketing strategies.
Technological advancements and globalization are transformative trends in how markets are defined. The internet has widened the consumer base and intensified competition, even for localized retail businesses. The rise of online 'business-to-business' platforms further exemplifies this shift, offering firms the ability to engage with suppliers and customers worldwide. All these external components significantly influence a firm's marketing system, alongside its internal components.