Macro-environment - Marketing Management

We have considered those environmental forces and factors that are within the marketing function’s organizational boundaries or in its immediate task environment. The top level of environmental factors comprises broader factors in the wider macro-environment of the organization over which the individual company has little or no control. It is from changes and trends in these macro environmental factors that the most significant and far-reaching marketing opportunities and threats for the organization will stem. These are now discussed in more detail.

Socio-cultural environment

Changes and trends here present significant challenges to the strategic marketing planner. Basic beliefs, attitudes and values are shaped and conditioned by the society in which people grow up, and their general behaviour, including purchasing behaviour, is influenced by societal and cultural norms .

Cultural and social values are firmly established within a society and are difficult to change. If and when they do change, they do so only slowly. In the short term they should be treated as parameters within which marketing strategies are formulated. Over longer periods we can expect some social and cultural values to have changed and these include changes in attitudes towards credit, an increasing awareness of and interest in healthy lifestyles and changes in attitudes towards women in society.

Although core cultural and social values change relatively slowly some changes are more rapid e.g. attitudes towards work and leisure, the place of women in the home and at work, bringing up and disciplining children and sexual attitudes and behaviour. In some societies, political, religious and economic forces and factors still combine to limit the nature and speed at which social and cultural changes take place.

In the UK, Channel 4’s Big Brother programme has been very successful. The programme centres on continuously observing a group of selected people living together in a house, with each week a member of the group being nominated for expulsion by the others. The programme attracts large viewing audiences, while at the same time making its participants overnight celebrities even when they are expelled. The format has been imitated by other channels including the popular I’m a Celebrity: Get Me Out of Here.

The format of such programmes and their content would probably never have been envisaged, and certainly not have been as successful, even ten years ago. Essentially, the participants in the programme have no privacy whatsoever. The camera observes and records them 24 hours a day, seven days a week. This observation extends into the most private activities of the group, and is effectively an invasion of privacy.

The surprising success of the programme is in part due to the fact that it was a product of its time. There was a demand for this sort of voyeuristic entertainment. The somewhat ruthless nature of the expulsions satisfies some of the viewing public with regard to what is now a more aggressive and individualistic approach in society.

Political/legal environment

The outcome of political decisions can often be seen in the economic policies of governments. In the UK, major marketing opportunities and threats in recent years have stemmed from the policies and legislation of successive governments irrespective of their political hue. For example, Margaret Thatcher and then John Major’s Conservative Government with its belief in the free market mechanism created significant marketing opportunities for many companies and threats for others through its policies of privatization.

The Labour Government of Tony Blair and Gordon Brown which replaced it similarly created marketing opportunities through its policies regarding public–private co-operation and funding in many sectors of the economy. For the marketing strategist, what matters in a planning context is not whether these and other policies and the legislation which has accompanied them have been ‘right’, but more the implications for marketing strategy. Indeed, the ‘melt down’ of the world economy in 2009 caught all governments unawares.Not only must strategies be planned to take account of existing policies and legislation, but account must also be taken of likely future changes. It is important to realize that the political and associated legislative environment is of great significance to the marketer and is likely to have a direct bearing on the formulation of marketing strategy.

Economic environment

This is closely related to the political/legal environment and the marketing strategist must understand the variety of economic variables that can shape marketing plans. Rates of inflation, interest rates, exchange rates, industrial output, levels of disposable income and the balance of payments are some of the factors of concern to marketing management because these influence costs, prices and demand. Not just domestic, but international economic developments and trends must be considered.

The Euro issue still dominates economic debate in the UK, and although the Conservative arm of the Conservative/Liberal Democrat coalition Government favours keeping the Pound Sterling, the Liberal Democrats favour entry to the Euro, so commitment to enter the single currency still remains. Therefore, this aspect of the economic environment continues to be a subject of debate and an area of uncertainty for companies with regard to their future planning.

Technological environment

This is a major environmental influence on marketing strategy and its influence is manifested in terms of developments and breakthroughs in technology that are the basis for new products and even new industries. Home computers, compact disc players, video recorders, i-pods and electronic cameras are just a few of the products which have emerged in recent years. Biotechnology, information technology and energy conservation are some of the new industries.

Equally important is the fact that technology also affects the way marketing is practised; e.g. in the marketing research area questionnaires can be designed and administered directly via computer terminals. Such IT developments have enabled the use of sophisticated forecasting techniques. In retailing, electronic point of sale (EPOS) data capture is now used by retailers through laser checkouts and direct transfer of funds.

Technological changes affect the way products are produced. Robotics, flexible manufacturing systems and fully automated factories are examples of the ways in which the basis for competitive advantage can be changed. So ubiquitous and far-reaching have been these technological developments that virtually every area and aspect of marketing is affected and the modern marketer must be aware of such trends and changes together with the implications for their businesses.

The physical environment

Sometimes referred to as the ‘natural’ or ‘ecological’ environment, this element of an organization’s environment was, until the end of the last century, felt by many strategic planners to be of little direct relevance to the formulation of future strategies. This was primarily because it was assumed that it had little direct effect upon organizations. Recent trends and events have shown this assumption to be ill founded and myopic.

As long ago as 1962 Rachel Carson1 warned of the dangers to the physical environment from industrial and commercial activities. Frequently such warnings were dismissed on the grounds that they represented the views of a small number of ‘environmentalists’ who were misguided or overly pessimistic. This ‘small’ number of critics proved to be in the vanguard of what has now become a popular, powerful and global movement concerned to protect the natural environment in which we live.

We each have our views on issues such as the use of the world’s natural resources of minerals, forests and water as well as some of the most fervently contested contemporary issues regarding phenomena like the ‘greenhouse’ effect, and the depletion of the ozone layer. Regardless of personal views, they have become issues for the strategic marketing planner. We have witnessed adapted aerosol products that are now ‘ozone friendly’, and increasingly, products and technologies are designed to be energy efficient; degradable plastic packaging is now widely available as is recyclable packing, and car manufacturers are working towards completely recyclable vehicles.

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