Macro environmentPresented by Thabani Nkala

Business studies

201210178.University of Johannesburg

MACRO ENVIRONMENT

Any company operates in a larger macro environment of forces that shape opportunities and pose threat to the company.

There are six major forces in the company’s macro environment:

• Demographic• Economic• Natural• Technological• Political• Cultural

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The Company’s Macroenvironment

Demographic Environment

Demography is the study of human populations in terms of size, density, location, age, gender, occupation, etc.Demography environment is of major interest to marketers because it involves people and people make up markets.

• Mobile industries launches handsets based on occupation.• They also launches its product according to location.• Sometimes industries launches its product keeping gender factor in mind.

Economic Environment

Consumer Psychology

Income Distributio

n

Economic Environment

The economic environment consists of factors that affect consumer purchasing power and spending patterns. Marketers must pay close attention to major trends and consumer spending patterns.

• As far as mobile industries are concerned, the economic system is critical as it can control what the

  organization is to produce, how it should produce and the category of recipient who should use their end products.

• Nokia has launched new handset Lumia 1020 in US not in India as company is focusing more on low budget handsets for India.

6 ECONOMIC GROWTH

2 The Economic Problem

POLITICAL ENVIRONMENT

The political and legal environment consists of laws, government agencies, and pressure groups that influence and limit various organizations and individuals. Sometimes these laws also create new opportunities for business.

Two major trends in the political environment are:

Increase in business legislation Growth of special interest groups

Legal and Regulatory Environment

Laws and Regulations for safety for consumer protection to protect special interests

Dangers of litigation--anyone can sue, and juries often buy it!

Examples: Antitrust

Fair competition Pricing

“Truth in Lending”--have to tell people real costs of financing; car leases now regulated

Political Environment

This environment is also very important from company’spoint of view because marketing decisions are stronglyaffected by developments in the political environment.It consists of laws, government agencies and individuals ina given society. Any political decision can affect market.

For example:• In Egypt and Libya there are ongoing a political riot and in this situation Nokia company decreased their market.• Samsung violated a host of Apple patents and engaged in "willful infringement”.

Cultural Environment

The institutions and other forces that affect a society’s basic values, perceptions, preference, and behaviors.

Cultural Environment

Cultural factors strongly affect how people think andhow they consume.This environment is made up of institutions and otherforces that affect society’s basic values, perceptions,preferences and behaviors.

• Mobile industries operates in a diverse number of culture.• Mobile industry puts one local language in their handsets.• Marketing strategy depends sometimes on the culture.

Natural Environment

The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.

Mobile industries are continuously improving the environmental credentials of all their product like:• Improving energy efficiency.• Using renewable materials and smart packaging. • Making eco friendly products.

Mobile industries being eco-friendly

Energy efficiency: automatic screen brightness adjustment, battery saver feature, energy efficient charger.

Materials: free of PVC, Contains bio plastics & recycled metals, Free of nickel on the product surface.

Recycling: 100% recoverable as materials and energy.

Packaging: 100 % recyclable, minimized package made of renewable materials containing up to 60% recycled materials, Virgin wood fibers up to 100% certified.

Technological Environment

Most dramatic force now shaping our destiny.

Technological Environment

Today technological advances are perhaps the most dramatic forces affecting today’s marketing strategies.Forces that are creating new technologies are also creating new products and market opportunities.The mobile phone in our hand is now packed with advanced tools that let you do so much more.

• Nokia launched wireless charging phone.• Samsung launched phones with HD sensitive touchscreen.• Recently Nokia launched phone with 41 megapixel camera.• Sony launched a phone which is dust and water resistance.

Mobile industries being eco-friendly

Energy efficiency: automatic screen brightness adjustment, battery saver feature, energy efficient charger.

Materials: free of PVC, Contains bio plastics & recycled metals, Free of nickel on the product surface.

Recycling: 100% recoverable as materials and energy.

Packaging: 100 % recyclable, minimized package made of renewable materials containing up to 60% recycled materials, Virgin wood fibers up to 100% certified.

Globalization In India

Technological Environment

Accelerated pace of change

Unlimited opportunities

R&D Spending

SOCIAL - CULTURAL ENVIRONMENT

Society shapes the beliefs, values, and norms that largely define consumer tastes and preferences. People absorb, almost unconsciously, a world view that defines their relationships to themselves, to others, to organizations, to society, to nature, and to the universe. The diversity in the world is not only restricted to topography but also in the languages, cultures as well as religious beliefs. In this era of globalization, organizations cater to the culture of each country where it functions or operates.

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Gap Analysis

Difference between total market potential and total sales

The difference could be due to

Product usage gap - increase promotion, advertising, price etc.

Product line gap - lack of product variation; latent demand

Distribution gap - lack of appropriate coverage

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Market Share Market share is the percentage of total sales

that a company can expect to get from the total market.

Eg. there are 100 gadgets sold in a country and company A sells 43 of them, then company A has a 43% market share

you sold Gadgets for a total cost of $860 and the people in the country spend a total of $2,000 on the same widgets, then the market share is $860/$2,000 or 43%

5] Liberalization In India

Elimination of industrial licensing and registration.

Liberalizing the MRTP act.

Freedom for expansion and production.

Increase in the investment limit of the small industries.

Freedom to import capital goods.

Freedom to import technology.

Free determination of interest rates.

ACTIONS TAKEN DURING LIBERALIZATION

Environmental Scanning and Analysis

SCANNING ANALYSIS

ACTION

Source: Adapted from M. E. Porter, Competitive Strategy, Free Press, 1980, p. 4.

Threat ofsubstitutes

Potentialentrants

Threat ofentrants

Suppliers

Bargaining power

Substitutes

Buyers

Bargaining power

COMPETITIVE RIVALRY

Five forces analysis

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Walt Disney markets two distinct Pooh bears to match its two-tiered market.

References

Drēziņa, E.(2014). Macro. [Online],available: http://www.slideshare.net/elinadrezina/macro-31821756 07 March 2014

Fegade, A. (2013). Micro environment. [Online], available: http://www.slideshare.net/atulfegade/bom3/ 07 March 2014

Patel, R. (2009). Marketing environment. [Online], available: http://www.slideshare.net/raj1436/marketing-environment-1315233

Singh,P. (2013). Macro environment.[Online], available: http://www.slideshare.net/ParitoshSingh4/macro-environment-of-the-industry 07 March 2014 

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