Set of conditions that exist in the economy as a whole instead of particular known as marketing macro environment. We may also say that the competitors and all of the other workers functions in a larger environment of factors that design the threats & opportunities to the business organization.
Factors of Macro Environment
Six major forces are include as factors of macro environment of business organization which are as below:
- Demographic
- Economic
- Natural
- Technological
- Political
- Cultural
(A) – Demographic Environment
The examination of human population in terms of location, age, size, density, occupation, race, sex and other statistics is referred to as demography.
This environment is of significant importance to the marketers because of the reason that it includes people and people compose the markets. There are changing trends in demographic environment which are as follow.
01 – The rate of population of the world is growing in an increasing rate that will quickly exceed the capacity to serve the population along with the supply of foods to the population.
See Also: Functions of Marketing
Poor countries face dangerous situation because of the poverty present in them. Emerging markets, just like China, are becoming more interesting from the global markets
02 – The changing age structure of the population is the most significant trend. Because of the increase in life expectancy and slowdown in the birth rate, the population is aging. Middle age group is the prime market. This group has many subdivisions which are as follow
- Generation X
In the shadow of the boomers, this group lies and there is deficiency of clear differentiating features. Ass all the problems influenced this group so this group is very cynical in nature.
- Echo Boomers
The large growing kid and teen market is included in this group. Different from generation X group, echo boomers is employed to affluence on part of their parents. One differentiating feature is their utter fluency and comfort with digital, computer and internet technology.
- Generational Marketing
Generational marketing is possible, however, carefulness should be employed to prevent generational alienation.
In recent era many members of family work in a remote office or at home by telecommunicating and performing their business activities by using internet, fax, cell phones and modem.
The population is getting much educated in general. The groups following this trend are attracted with the help of books and education services.
In the future, the technical skill like computer skill will become essential. The enhancing of racial and ethnic diversity of population is the final demographic trend. Diversity is the factor that should be properly acknowledged in the coming years.
See Also: Micro Environment and Its Factors
However business organizations should identified that diversity goes beyond ethnic heritage. In the coming future, the market of disabled people becomes important.
(B) – Economic Environment
The components that influence consumer purchasing power and spending patterns are included in the economic environment. United States contains the following main economic trends.
- Personal Consumption
Personal consumption has increased in 1980s and recession has appeared in early 1990s that has created modifications both corporately and personally in this country. Recently consumers shop more carefully.
- Value Marketing
In 1990s value marketing is quite serious strategy. The real income was rising again and the consumers were value conscious.
- Income Distribution
Income distribution was not smooth in the U.S and there is no shared prosperity in all classes. Furthermore, majority of consumer dollars are spent on food, transportation and housing.
Moreover two classes are emerged as a result of income distribution which is affluent and less affluent.
Economic changes should be properly monitored by the marketers in order to capable of prospering with the trend not suffering from it.
(C) – Natural Environment
Natural resources that are required as inputs by the marketers or that are influenced by the activities of marketing are included in the natural environment.
There was steadily growth in the environmental concern in last two decades. Following are some of particular aspects of concerns that are labeled by some trend analysts.
- Shortages of Raw Materials
Shortage of raw materials staples such as water, air and wood products have been potentially harmed and non-renewable like coal, oil and other different minerals that have been seriously consumed during industrial expansion.
- Increased Pollution
Increasing pollution has become worldwide difficulty. The environment is being seriously damages the industry. Smart business organizations are becoming environment friendly and are generating products which are recycle able, safe or biodegrade able.
These business organizations received positive response from public. However deficiency of proper funding has become serious issue especially in the third world countries.
- Government Intervention
The environmental concern in business and industry are becoming more practical and essential with the government intervention in the natural resource management.
For long term results, leadership is viewed as the best policy. The markers must assist to build solution to energy and material issues that are facing by the world, instead of opposing regulations.
- Environmentally Sustainable Strategies
The business organizations are forced or encouraged to develop strategies that are not simply environmentally friendly but also environmentally proactive by the green movement.
The connection between a healthy environment and a healthy economy is started to recognize by the business organizations.
(D) – Technological Environment
The forces that generate new product, technology and market opportunities are included in the marketing environment. The potentially dramatic force shaping our destiny is the technology.
New markets and opportunities are created by new technologies. The worth watching trends in this regard are as follow.
- At a faster rate, products are becoming technologically outdated.
- Unlimited opportunities are built on daily basis almost. View the expanding fields of industries of biogenetics, robotics, health care and space shuttle.
- The challenge is commercial as well as technical to generate affordable and practical versions of products.
- The regulations concerning the aspects of individual privacy, product safety and other areas that influence technological changes must be considered by the marketers.
- The marketers should also be attentive about any false innovation of their products that can arouse opposition and make any harm to the users.
(E) – Political Environment
Political environment contains government agencies, laws and other pressure groups that limits and effects different individuals and organizations in a given society.
Business is regulated by various forms of legislation. In order to guide commerce, government builds public policy which contains regulations and laws that limit business for betterment of society as a whole.
See Also: Basic Concepts of Marketing
Wide range of regulation and laws are existing for every marketing activity. Following are some trends in political environment.
01 – Legislation is increased to prevent business from one another and prevent consumers from unjust business practices. Furthermore, legislation is increasing to prevent interests of society against unrestrained behavior of business.
02 – New laws are developed along with their enforcement that will increase or continue.
03 – Enhanced importance on socially responsible actions and ethics. The long term interest of the consumers and environment are protected by the socially responsible business organizations which find different ways to accomplish this.
Managers of enlightened business organizations are encouraged to view beyond regulation and perform the right thing. The concern about social responsibility and ethics has increased by recent scandals.
New set of social and ethical problems has emerged by the boom in internet marketing and e-commerce. Concerns are security, access by unauthorized or vulnerable group and privacy.
(F) – Cultural Environment
The forces and institutions that influence the perceptions, basic values, behaviors and preferences of society are included in the cultural environment. Marketing decision making is influenced by certain cultural characteristics. Following are most dynamic cultural characteristics.
- Persistence of Cultural Values
There is enhancing degree of persistence of the core beliefs and values of people. Values and core beliefs are transferred from parents to children and reinforced by churches, schools, government and business. Secondary values and beliefs are more open to alteration.
- Shifts in Secondary Cultural Values
Marketers try to spot and be capable to capitalize the potential change as secondary cultural beliefs and values are open to alteration. The main cultural views of society are as follow.
People’s Views of Themselves: People change in their importance on serving others versus serving themselves.
The materialism and personal ambition enhanced dramatically in 1980s with important implications for marketing. The chief beneficiary was the leisure industry.
People’s View of Others: There is a shift in society about me-society to we-society, which is noted by the observers. More spending is done by the consumers on services and products that will enhance their livings rather than their image.
People’s View of Organization: People show interest to function for large business organizations but they require the business organizations to get potentially socially responsible.
Many business organizations are connecting themselves to value able causes. There is the condition of honest in appeals.
People’s View of Society: This preference affects the patterns of consumption. There is a problem of “Buy American” versus buy abroad that will emerge in the next decade.
People’s View of Nature: A growing trend is seemed in the shape of the people’s view about nature through technology along with the belief of the people that their nature is beautiful.
Nature is finite however. In the next several years, love of nature and sports connected with nature are believe to get important in the coming decade.
People’ View of the Universe: There is rise of studies of the religion, man and thought-provoking ad campaigns. Recently Americans are on a journey of spirituality. This will result in the shape of “spiritual individualism”.
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