Assignment

Of
Marketing Management

Topic:
Macro – Environmental
Forces

Submitted to: Submitted by:

Prof. Ruchi Sharma Saayana .S. Prakash

Section A
 Macro – Environment Factors:
In order to strategically manage a company, analysts often perform a
DEPEST analysis, which identifies the demographical, ecological, political,
economic, socio-cultural, and technological factors in the macro
environment that can affect how companies operate. These six factors are
defined as follows:

1) Demographic Factors: Demographic factors are about the characteristics of

the population in a specific area and include multiple factors like age, race, income, etc.
Further, most businesses find the data with respect to these factors within the targeted
demographic variable of interest as it can affect the growth and success of a business. For
example, Clothes or apparels at any company are made according to the gender, size, and
age factors. Such as Global Desi, Zara, H&M etc. all these brands and many more make
apparels according to the demographic factors.

2) Economic Factors: The economic conditions of the economy and the performance of a
business have a very close relationship. A business depends on the economy for all its inputs
and factors of production. It also sells its products and services in the same market.
A market is never in one stable condition. It is always in a flux. If there is a boom in the
market then all businesses will benefit from the favorable conditions. The income will be
higher, rate of interests will be low, new capital will be available etc. Also, the opposite is
also true in case of a bust. For example, Coca-Cola operates at the global level, and the
universal condition of the economy is not much strength in the current times. Also, it is
expected that the worldwide growth of the economy will slow down by 2.6 % by the end
of this year. Along with this, fluctuations in the exchange rate of various currencies also
affect the working of coca-cola at the global scale. In addition to this, there are rising
prices of different raw materials such as plastic and oil may affect the result in lower
profit margins to Coca-cola.

3) Socio – Cultural Factors: The Socio-Cultural forces link to factors that affect
society’s basic values, preferences and behavior. The basis for these factors is formed by
the fact that people are part of a society and cultural group that shape their beliefs and
values. Many cultural blunders occur due to the failure of businesses in understanding
foreign cultures. For instance, symbols may carry a negative meaning in another culture.
For example, when GAP unveiled its new logo design in the fall of 2010, it was
immediately disapproved with substantial criticism. The mistake made by the company
was that the choice Helvetica font and people also quite reacted to the sharp of the blue
cube jabbing into the curve of the letter ‘P’.
4) Political-Legal Factors: The political environment of a country will mainly depend on
the political beliefs and ideologies of the party in power at the state and central levels. The
legal environment refers to the rules, laws, regulations, and judgments etc. that affect the
functioning of a business. And this will also include the taxation laws and the Budget for the
given year. So stable legal and political government is really important if the business and
the economy as a whole has to succeed. For example, Nike is globally recognized athletic
apparel, footwear, sports accessories and equipment. Nike has been very fortunate as the
government of the United States have formulated such policies that will foster the growth
of businesses. The company is enjoying stable currency and low-interest rate conditions
along with very competitive tax arrangements that help the company in advancing
growth. US government has taken initiatives with respect to transparency in the global
value chain and Nike has greatly benefited from this. However, Nike is facing hard times
in its outsourced manufacturers in other regions like Indonesia, Thailand and Vietnam
where there is an increase in political unrest.

5) Technological Factors: In the times we live in, technology is constantly changing it is

important that the business can keep up with the changes. Technology does not only confine
to computers and IT services. It includes products, manufacturing processes, techniques etc.
The technological developments can be a huge advantage for a firm. But at the same time of
the technology used by the firm becomes obsolete due to such developments, then it can
also be a threat to the firm. For example, Technological Factors Affecting Starbucks are
the development and adoption of mobile technology presents many opportunities for
Starbucks. They have already teamed up with Apple to use their devices as a platform for
presenting ads/discounts. The growing desire for internet connectivity has given
Starbucks an opportunity to rebrand their coffeehouses and stand out from the
competition by providing free WiFi. Mobile payments are slowly being introduced,
which might make a morning cup of coffee more attractive to many customers (and in
doing so increase their potential market).

6) Ecological/Natural Factors: Ecological, or natural forces in the Macro

Environment are important since they are about the natural resources which are needed as
inputs by marketers or which are affected by their marketing activities. Also,
environmental concerns have grown strongly in recent years, which make the ecological
force a crucial factor to consider. For instance, world, air and water pollution are
headlines every marketer should be aware of. For example, environmental Factors
Affecting Marriott is falling fuel prices might increase business, thanks to cheaper travel.
Conversely, increased fuel prices would reduce business — especially that funded by
international tourists who travel by airplane. Over a greater span of time, climate change
might affect the appeal of various resorts.