Macro Environment

For any decision there is n number of factors which influences the decision. Be it a decision related
to any organisation, any business concern or even an individual. Thus it is per se very much
necessary to understand the influence of each parameter. The factors which influence a decision are
also termed as its environment. The environment can be Internal, can be controlled by the
organisation; Micro, specific to the industry and is different for different industries; and lastly Macro,
generic in nature and impacts the whole business environment.

The Macro Environment includes all the factors which are external to the firm and which cannot be
controlled by the organisation. And also they are not specific to any industry but influence all the
firms but the influence may be at different level. As a Marketing manager, on musty have knowledge
of different factors which influences the marketing decision of a firm, And also since they are not
controllable, one must adjust the decisions as per the changes in the environment.

The Important factors comprising the Macro Environment of Marketing are Demographic, Economic,
Socio-Cultural, Natural, Technological and Political-Legal. Influence of each factor shall be discussed
in detail in the following parameters.

DEMOGRAPHIC ENVIRONMENT
Demographic, as the name signifies is related to population and population mix. It is people who
make market. It is they who contribute to demand and also it is manpower which helps in produce
and supply. Thus as a marketer, on must understand the demographics on the nation and also due
to globalisation, global population also influences the decisions.

Population Growth:
India is being ranked second in terms of population after China. The population as per Census
estimates as in July 2009, were 1.17 Billion with growth rate of 1.58%. This provides an exceptional
opportunity for business. The high population growth has attracted many FMCG firms and retailers
in countries like China and India whose markets are yet unexplored.

Population Mix:
Not only the Growth but also the composition of population is important. For instance in country like
Japan, where major proportion of population is aged has attracted Pharma firms. And similarly In
India where population is composed of Youths has made the firms to position themselves as pro-
Youth, like MTV, Adidas, Coke etc...

Household pattern:
The household pattern, like Large Families, small families or nuclear families, also influence the
marketing decision. In rural areas of India where still the trend of large and joint families is pertinent,
the purchasing decision is influenced by most of the family members and in case of urban India
where Nuclear families are in trend, the decision is taken by a single user.
Geographical Shift:
In country like India, where a language changes every 100 miles, a culture changes every 10 miles,
the marketer must have knowledge of the culture and language of the region to position its product
in better way.

ECONOMIC ENVIRONMENT
As we know demand is defined as Desire for a product backed by willingness and ability to pay. Thus
it is not only the people but also their ability to buy a product is vital for a marketer. Ability to pay
can be measured in terms of Income distribution, economic condition of the nation, Credit
availability.

India being an emerging economy with a GDP of $1.22 Trillion and Percapita Income of $2932 (PPP
Terms) has lots of potential for the markets. This also impacts the general economic conditions of
the economy. The availability if Infrastructure, the business development, the policies etc...

The Distribution of Income is also one of the important parameters that shall be considered. A high
unequality in distribution will lead to limited potential as the market is widely controlled by few rich
as they have the purchasing capability. India with Gini Coefficient of 0.72 which implies there is 72%
inequality.

Credit availability and saving trends in an economy has an influence on the purchasing ability of the
consumer. The availability of Hire purchase options, availability of Home loans and other loans has
boosted reality sector as well as White goods market in India. Similar cases can b of USA where
realty sector was at a high boom because of sub-prime lending which exponentially increased the
credit availability options.

SOCIO-CULTURAL ENVIRONMENT
Culture is set of beliefs and customs pertinent in a society. A marketing campaign must be in tandem
with the beliefs. The market should adjust the disicions with respect to the cultural and social;
beliefs. For Instance McDonalds had to stop its products containing Beef as cow is regarded as
goddess in India. But in many cases firms are able to dilute the cultural beliefs by exposing them to a
new culture. This can be validated by the fact that Archie’s ha made its market in India by promoting
different occasions like Valentine’s Day, Fathers Day and friendship day.

Also the companies who are in tandem with the cultural beliefs and who promote the culture is able
to attract the loyal customers more easily and can retain them more effectively.

NATURAL ENVIRONMENT
Nature is the source of raw material for the production a product. The raw material may be
renewable, infinite or depleting. In all the cases the raw material shall be preserved and wastage
must be minimised.
Also the pollution should be minimised to preserve the ecology. Marketers in the current scenario
try to Go Green and promote the Eco friendly Concept. For Instance Idea promoted Save Paper, and
many companies are promoting Go Green campaign.

TECHNOLOGICAL ENVIRONMENT
It is technology changes every fort night. Obsolesce has become faster than it is spelt. Thus a
marketer must be aware of recent technological updates. Being technologically upgraded and using
the latest technology provides competitive advantage over the competitors. There are unlimited
opportunities for Innovation and every competitor tries to exploit the new usage of the product. The
innovation can be in terms of new usage, new package, new material, and new method of
production or even new kind of promotion. The recent era has seen many indescribable Innovations
like Tata Nano, Apple I phone, Kindle E-reader, M-Commerce, Micro Credit and the list continues.
Thus there are unlimited opportunities to discriminate the product by using technology.

POLITICAL AND LEGAL ENVIRONMENT

It consists of Government Regulations, policies, social groups etc... Any kind of business must be
abided by the legal policies of the nation. The Law is for the purpose of protecting customers from
exploitation by the business man, to protect interest of society and also to protect companies from
unfair competition. There are various kinds of laws in India like Consumer Protection Act,
Environment protection Act Indian Contract Act, Competition Law etc... Apart from this every citizen
is required to be abided by the Indian Constitution.

Policies like Displaying the Expiry date, MRP, and Green Circle on a Vegetarian Food product also
influence the marketing decision.

Also there exist a Special Intrest Groups like NGOs who oppose any unethical acts by the business. In
recent history we saw opposition by large customer group against Cadbury as worms were found in
one of its products. Also Coca-Cola suffered lots of opposition as pesticides were found in its Cold-
Drink.

The Growth of Consumerism movement has made the business Pro-Consumer and made the market
Consumer Driven Market.

CONCLUSION
Thus as A Marketer one must understand each and every parameter of the Macro Environment and
be flexible to the changes in the environment. As these factors are external to the business and
cannot be controlled, ability of being flexible to the changes in these factors will provide competitive
advantage to the firm.