THE MACROENVIRONMENT

THE MACROENVIRONMENT

Demographic Environment: Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. Changes in the world demographic environment have major implications for business. Thus, marketers keep close track of demographic trends and developments in their markets, both at home and abroad.
Changing Age Structure of the Population
Author Douglas Coupland calls them Generation X. Others call them the “baby busters.” Increasing parental divorce rates and higher employment for their mothers made them the first generation of latchkey kids. The GenXers developed a more cautious economic outlook, and are a more skeptical bunch. Millennials (also called Generation Y or the “echo” boomers). Born between 1977 and 2000, these children of the baby boomers number 83 million or more. This group includes several age cohorts: Tweens (age 10–12), Teens (age 13–18), Young adults (age 19–33). Millennials are fluent in and comfortable with digital technology. It is a way for life for them.

Generational marketing: Rather than risk turning off one generation in favor of another, marketers need to form precise age-specific segments within each group. It may be more useful to segment people by lifestyle, life stage, or common.

Economic Environment

The economic environment consists of factors that affect consumer purchasing power and spending patterns. Industrial economies constitute rich markets for many different kinds of goods. Subsistence economies consume most of their own agricultural and industrial output, and offer few marketing opportunities.  In between are developing countries, which can offer outstanding marketing opportunities.

Income Distribution: Income distribution in the Sri Lanka is highly skewed. The rich have grown richer, the middle class has shrunk, and the poor have remained poor. This uneven distribution of income has created a tiered market.

The Natural Environment: The natural environment involves the natural resources that are needed as inputs by marketers, or that are affected by marketing activities. Trends in the natural environment:
Growing shortages of raw materials, Increased pollution and Increased government intervention. Companies are developing strategies and practices that support environmental sustainability

Technological Environment: The technological environment is perhaps the most dramatic force now shaping our destiny. Technology has released such wonders as antibiotics, robotic surgery, miniaturized electronics, smartphones, and the Internet. These new technologies can offer exciting opportunities for marketers.

The Political and Social Environment: Marketing decisions are strongly affected by developments in the political environment. This consists of laws, government agencies, and various pressure groups.

Legislation Regulating Business: Governments develop public policy to guide commerce. Increasing Legislation. Legislation affecting business around the world has increased steadily over the years. Business legislation has been enacted for a number of reasons: To protect companies from each other, To protect consumers from unfair business practices and To protect the interests of society against unrestrained business behavior. Because government agencies have discretion in enforcing laws, they can have an impact on a company’s marketing performance.  Increased Emphasis on Ethics and Socially Responsible Actions

Socially Responsible Behavior: Enlightened companies encourage their managers to “do the right thing.” The boom in Internet marketing has created a new set of social and ethical issues. Cause-Related Marketing. To exercise their social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes.