The

Macroenvironment
The Macro-environment

Demographic, socio-cultural, economic, technological, political, legal

and ethical and natural environmental factors form part of the macro-
environment of organisations. These are the factors over which
organisations have practically no control but which nonetheless
influence their marketing activities. Successful marketers will be those
who are able to acknowledge the changes that are taking place and
make effective adjustments.
The Macro-environment

Demographic factors
• Monitoring the changing demographics can be a matter of life or death for many
companies. Demographics describe the observable characteristics of individuals
living in a country or forming part of a particular culture. Demographics include our
physical traits, such as gender, race, age, income, occupation, education, marital
status, and so on.

Economic factors
• Various economic factors influence a firm’s ability to compete and consumer's
willingness and ability to buy products. For instance, the state of the economy is
always changing. Interest rates rise and fall. Inflation increases and decreases.
Consumers' ability and willingness to buy changes. The economy thus goes through
fluctuations very often.

• Two aspects of the economy are consumer's purchasing power and the business cycle.
The Macro-environment

Activity 2

To enhance your own understanding, identify and explain

(i) Consumers’ purchasing power

(ii)The business cycle
The Macro-environment

Technological factors
• You are already aware that the technology available in the world is changing
the way people communicate and the way firms do business. We are all
affected by technological changes and ATMs, the Internet, and mobile
phones are just a few examples of how technology is affecting businesses and
consumers. Many consumers get information, read the news, use text
messaging, and shop online. As a result, marketers have begun allocating
more of their promotion budgets to online ads and mobile marketing.

All organizations must make assumptions about the future in

technology and its impact on their business activities. The results of
technology cannot be ignored.
The Macro-environment

Activity 3

•Everyone enjoys thinking about the future and the kinds of technology
that will evolve.

• Fast forward a few years to see what opportunities technology might open up
for marketers, for instance regarding advertisements, medicines/medical
equipment, household appliances etc.
The Macro-environment
Social and cultural factors
•The social and cultural environments include demographic characteristics, which
you have already come across in section xxx, social trends, such as people’s
attitudes toward fitness and nutrition. Trends in the social environment might
increase or decrease the size of some markets or even contribute to develop new
markets.

•As for the cultural environment, it consists of institutions and the basic values and
beliefs of a group of people. The values can also be further categorized into core
beliefs, which are passed on from generation to generation and are very difficult to
change, and secondary beliefs, which tend to be easier to influence.

•A natural evolution that occurs in any culture is the emergence of subcultures, for
example, the Generation Y and the environmentally concerned people. As a
marketer, it is important to know the difference between the two and to focus
your marketing campaign to reflect the values of a target audience.
All these factors are changing the global marketplace. Fitness,
nutrition, and health trends are affecting the product offerings of many
firms. For example, more women are working, which has led to a rise in
the demand for services such as house cleaning and daycare. This also
means that women spend less time at home and in the kitchen. Firms
are responding to the time constraints their buyers face by creating
products that are more convenient such as, microwave ovens, frozen
meals and nutritious snacks and so on.
The Macro-environment

Activity 4

•Two examples of subcultures have already been provided above.

Identify two or more subcultures and explain their implications to
marketers.
The Macro-environment

Political, Legal and Ethical factors

•All organisations must comply with government regulations and understand the
political, legal and ethical environments in which they do business. The political
environment includes all the laws, government agencies, and groups that influence
or limit organizations and individuals within a society. It is important for marketers
to be aware of these restrictions as they can be complex and can change quite
often. Regulations must be understood by marketers to avoid negative public
perception or sanctions.

•Organisations conducting business in international markets must understand the

regulations and laws in the countries they are operating in as these will have an
impact on their marketing strategies. For instance, in terms of advertising,
distribution, etc.
The Macro-environment
Activity 5

•Think of some recent regulations (in the local or international

contexts) that have caused changes in the marketing practices of
businesses during the past few years, such as in distribution,
advertising, packaging, etc.
The Macro-environment
• Ethics is an important and growing consideration within marketing,
from the perspective of both marketers and consumers. Marketing
ethics question whether particular marketing activities can be
considered morally right or wrong. Ethics is normally referred to as
the set of moral principles or values that guide behaviour. Fairness or
justice is one of the key issues raised by ethics. Developing this
perspective further, Marsden (2007) suggests that a consideration of
marketing ethics should involve:

• recognising and describing moral issues that arise from marketing activities
• using ethical theories and frameworks to critically assess these moral issues
• establishing a set of codes, rules and standards for assessing what is right or
wrong regarding the marketing activity being under.
The Macro-environment
Activity 6
Consider these marketing examples that raise ethical issues. To what
extent are they acceptable to you and why?
(i) A manager gives an extra discount to a customer who is a personal
friend.
(ii) An organisation charges a higher price to less wealthy customers on
the basis that they buy less from the organisation.
(iii) A hospital or health insurance provider refuses to provide a drug to
cancer patients on grounds of cost while neighbouring authorities
provide it.
http://www.open.edu/openlearn/money-management/marketing-th
e-21st-century/content-section-2
The Macro-environment
Natural factors
•As you are aware, the manufacture of many products involves processes
that could be harmful to the natural environment. In fact, organisations are
increasingly being forced to review their production processes to take into
consideration such factors that are likely to cause any negative impact on
the natural environment.

•The natural environment includes the natural resources that a company

uses as inputs. As raw materials become increasingly scarcer, the ability to
create an organisation’s product gets more difficult. Today, many firms are
doing more to engage in “sustainable” practices that help protect the
environment and conserve natural resources. Actually, we are now
witnessing the rapid emergence of green marketing and the societal
marketing concept.
The Macro-environment
Activity 7

Explain the ‘green marketing’ concept and provide examples of green

marketing practices implemented by some organisations you are
familiar with.
SUMMARY

• This Unit has stressed the importance of understanding the marketing

environment as it changes constantly and has implications on
marketing activities. You would have observed that several factors
constitute the marketing environment of organisations. Some of
these factors (Micro environmental) are controllable whilst others are
beyond the control of organisations (Macro environmental factors),
thus the importance of continuously scanning and monitoring the
marketing environment.