Another aspect of the Macro Environment that has to be studied is the Economic Environment. These are those factors that effect what the consumer buys, how much he buys and when he buys - these are known as buying habits. There are various factors that affect what purchases the consumer makes. The most vital of these is his income, that is - how much money he earns, this will in turn determine the amount of money he is able to spend. Budgets, inflation, deflation and if he has a job and also the type of job, influence the consumer's income. The spending power of consumers who use their credit card frequently on the other hand would be affected by credit limits and interest rates. The economic situation in the country will help the Company decide on the terms of payment, credit limit, etc.
The Social & Cultural Environment helps understand the behaviour of consumers. This includes 'values, perceptions, preferences and behaviours' - Kotler. This is significant because it helps the managers avoid any features in their product, which would not be accepted by the consumers in that particular country. This might be because it goes against their religion, culture or traditions. The Company might want to customise their product according to the country it is sold. For example, McDonald's serve corn soup and teriyaki burgers in Japan and pasta salads in Rome. While in India where cows are considered sacred, McDonalds sell Veggie Burgers instead of beef. To improve their image with their customers McDonalds gets involved in community activities, as it did in Russia where on the opening day of its first restaurant in Moscow it held a party for 700 Muscovite orphans. Apart from that it donated all the money from the day's sales to the Moscow Children's Fund.
The Demographic Trends are those which concern the human population in terms of size, density, location, age, sex, race, occupation and much more. Through this kind of information the Company learns more about its target customers, their approximate number, etc.
The Technological Environment is a fast-growing one. It has been evolving very fast and huge progress has been made in the past few years. This is causing products to have a shorter product life cycle. Thus more money is being invested in research and development and close attention is being given to minor improvements. It is crucial to monitor changes and developments in technology if a firm is to remain successful. To strengthen its position it must try and create new product opportunities and market opportunities properly.
The Natural Trends affect mostly the production and the marketing activities of the new goods. Trends in this environment include shortage or scarcity of raw materials and the increase in the cost of energy - which would alter the product's price. As the levels of pollution increase, the public, government and producers are becoming more environmentally aware. These trends are having a significant impact on organisation's marketing strategies. For example McDonalds is very keen on environmentalism. All its napkins, bags, tray liners, carry-out drink trays and even most of the stationery used at headquarters are all made out of recycled materials. Although it costs the company more than $1 billion to purchase recycled materials it helps keep the 'green' image which is so meaningful these days.
The macro environment refers to the larger forces that have an impact on society as a whole and not on just one or a few companies. One single firm cannot usually make significant changes to these forces and therefore it can only mold itself around these forces and adapt its marketing mix to compensate for the opportunities and threats that may arise.
Bibliography
- Leader W.G., Kyritsis N., Fundamentals of Marketing, Stanley Thornes Publishers Ltd, 1990.
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