MARKETING MACRO-ENVIRONMENTAL FACTORS: AN OPPORTUNITY FOR OR

THREAT TO THE TRAVEL AGENCY BUSINESS

Lorena Bašan, Ph.D., Assistant Professor

Faculty of Tourism and Hospitality Management
Opatija, Croatia
e-mail: Lorena.Basan@fthm.hr

ABSTRACT

Enterprises operating on the tourism market are faced with rapid and frequent change that affects
their performance from both the tourist demand side and the tourist supply side. The tourist demand side is
distinctly heterogeneous with regard to what customers want. Customer demands regarding services
involved in tourist trips are becoming increasingly personalised, and market segments with new
requirements and habits in satisfying tourism-related needs are emerging. Change in tourist demand
directly affects tourist supply. In this context, the ability of tourism enterprises to clearly identify their
market position and recognise newly emerging business conditions in their environment is vital to their
successful performance. To this end, tourism enterprises need to analyse their environment and, based on
this analysis, identify the types of environmental factors that exist, and determine in which way and to
what extent these factors affect their performance.

Factors of the marketing macro and micro environment affect the performance of enterprises. The
marketing macro environment consists of external factors, which are often referred to as uncontrollable
marketing variables, while the micro marketing environment comprises factors of the business
environment and internal factors.

The impact of macro-environmental factors on the performance of enterprises can present either
an opportunity or a threat. SCEPTICAL analysis was used in analysing the effect of macro-environmental
factors on the performance of travel agencies in Primorsko-Goranska County. SCEPTICAL analysis was
chosen as a framework for analysing the macro environment of travel agencies, taking into consideration
the specific features of the tourist market and the effect of a larger number of different factors in
comparison to other types of markets. Using SCEPTICAL analysis, research into the impact of macro-
environmental factors on the performance of travel agencies focused on the following groups of factors:
social, cultural, economic, physical, technical, international, communication and infrastructure,
administrative and institutional, and legal and political. Travel agencies of Primorsko-Goranska County
judged the major part of macro-environmental factors as being an opportunity for their businesses.

Keywords: marketing macro environment, external factors, SCEPTICAL analysis, travel agencies

INTRODUCTION

The marketing environment of any enterprise comprises a great number of factors that affect its
operations in a variety of ways and to different degrees. Compared with other markets, business on the
tourism market has special features. These special features primarily result from the characteristics of
tourism services, the “product” that is the object of exchange on the tourism market, as well as from the
fact that it is the customer/tourist who travels on the tourism market and not the product, as is the case on
other markets. The special traits of the tourism market and the tourism product call for a different concept
and a more comprehensive analysis of factors of the marketing environment that impact on the operation of
tourism enterprises. Analysing and monitoring how these factors affect operations, and to which extent, is
a precondition to ensuring that tourism enterprises are capable of making timely adjustments to new
demands and conditions in business.
 1. CHARACTERISTICS OF THE MARKETING MACRO ENVIRONMENT ON THE
TOURIST MARKET

An enterprise’s marketing environment comprises actors and forces outside marketing that affect
marketing management's ability to develop and maintain successful relationships with its target customers.
(Kotler 2008:179) When looking at the marketing environment in the context of its nature and how it
operates, two levels of the marketing environment can be distinguished: the micro environment and the
macro environment. (Kotler 2010:114)

An enterprise’s marketing micro environment can be seen through the enterprise’s internal factors
and its so-called close external factors (Meler 1999:36). The marketing literature often refers to internal
factors as “controllable marketing variables”, because of an enterprise’s ability to influence and control
these factors, which represent its marketing mix. For an enterprise to perform successfully in view of its
internal environment, it must have an efficient marketing department that is closely connected to all its
departments: (Kotler 2008:180) top management, the financial department, R&D, supply, production and
accounting. Unlike its internal factors, a tourism enterprise’s “close external factors” can be influenced
upon but cannot be controlled. Also known as factors of the business and industrial environment (Morrison
2002:111), they include suppliers, intermediaries, customers, competition and the public. (Kotler
2008:180)

In the marketing literature, an enterprise’s marketing macro environment is also referred to as

“uncontrollable marketing variables”, because an enterprise can neither influence nor control them. These
variables include external factors. PEST analysis (Moutinho 2005:35), which includes an analysis of
political, economic, social and technological factors, is frequently used to analyse what influence the
factors of an enterprise’s macro environment have. This analysis, however, provides too general a
framework for the tourism enterprise, considering its special features with regard to other enterprises.
These special features pertain primarily to the characteristics of a tourism product relative to the
characteristics of products on other markets, as well as to the way the tourism market operates in
comparison with other product markets (unlike other markets, on the tourism market it is the
customer/tourist who does the travelling and not the product). Hence, SCEPTICAL analysis (Moutinho
2005:35), which includes social, cultural, economic, physical, technological and international factors,
communication and infrastructure-related factors, administrative and institutional factors, as well as legal
and political factors, is considered as being a more suitable framework for analysing the macro
environment of tourism enterprises. Within these categories, a tourism enterprise needs to identify which
factors represent an opportunity for its business, and which, a threat. By exploiting the opportunities
identified in its marketing macro environment, together with the internal factors identified as its key
strengths, a tourism enterprise should seek to reinforce its position on the tourism market based on its
competitive advantage and devise marketing strategies that will enable it to accomplish its goals.

It is necessary to view the tourism product, which is the object of exchange on the tourism market,
in all three forms in which it manifests itself: (Senečić, Grgona 2006:49) the simple tourism product- a
single service; the elementary or basic tourism product – a hotel product consisting of a number of
individual complementary products; and the integrated product – a tourism package that consists of a
greater number of basic products comprised into a whole. However, services offered by a tourism
destination are not the key motivation for travelling to a certain destination. Instead, the key motivation is
a destination’s primary offering: (Senečić, Grgona 2006:49) its environmental values, the beauty of its
landscape, its pleasant climate, cultural and historical heritage, etc. Components of the macro environment,
such as a destination’s physical component, accessibility, cultural component and other specific features,
which are not important to enterprises producing products for other markets, are vital to tourism
enterprises. Therefore, a more detailed framework for analysing the macro environment of tourism
enterprises is required, such as that provided by SCEPTICAL analysis.

An analysis of the macro environment is a procedure consisting of several components. In

analysing the marketing macro environment of a tourism enterprise, it is not enough to merely identify key
factors within each segment of the SCEPTICAL analysis and conduct a one-off study of the way these
factors affect the performance of the tourism enterprise. Instead, this analysis should be carried out
continuously through all the components that it comprises: (Evans, Campbell, Stonehouse 2003:156)
1. scanning – for warning signs
2. monitoring – for specific trends and patterns
3. forecasting – future direction of changes
4. assessing – current and future trends in terms of effects on the organization

2. MACRO-ENVIRONMENTAL FACTORS AND THE TRAVEL AGENCY

BUSINESS IN PRIMORSKO-GORANSKA COUNTY

2.1. RESEARCH BACKGROUND

A study was conducted of the impact of marketing macro-environmental factors on the operation
of travel agencies in Primorsko-Goranska County (PGC). The study involved PGC travel agencies that
have a well-developed network of branch offices. Based on a list of travel agencies obtained from the
Association of Croatian Travel Agencies, the study comprised 19 travel agencies with extensive networks
of branch offices, which represent the targeted study sample. The response rate was 52.6 per cent. The
instrument used to gather information was a questionnaire sent to all travel agencies in the targeted study
sample.

In this study, travel agencies were seen as companies on the tourism B2B market, whose
opportunities for improving performance were viewed through the advantages and opportunities gained by
applying project marketing, as a type of B2B marketing. A distinction should be made between B2B
marketing and B2C marketing. B2B marketing refers to the marketing of products and services by one
enterprise to another enterprise, while B2C marketing is about the relationship between a company and an
individual as the end consumer. Hence, B2B marketing can be defined (Brennan, Baines, Garneau 2003:
37) as the process of trying to match a company's products and services to the organisational goals of its
target customers. Project marketing is a special type of B2B marketing. The concept of project marketing
is a marketing theory derived from the specific traits that projects possess in comparison with products of
final consumption and business consumption, and in comparison with services provided to individual and
business consumers. Projects are seen as the “object of exchange” in which two business entities are
involved: one is the project seller, and the other, the project buyer. In light of this, the hotel enterprises
involved in the study were considered as being the sellers of projects for developing a new hotel product,
and travel agencies – tour operators, the buyers of these products. Projects for developing a new hotel
product were based on the assumption that hotel enterprises are focused on business travel.

2.3. RESEARCH RESULTS

SCEPTICAL analysis was used to analyse the marketing macro environment of travel agencies
and the impact of its factors, which were classified as social, cultural, economic, physical, technological
and international factors, communication and infrastructure-based factors, administrative and institutional
factors, and legal and political factors.

The influence of individual factors was identified as being either an opportunity for, or threat to,
the operation of travel agencies, based on an ordinal 1 – 5 scale (1 – strong threat, 2 – weak threat, 3 -
neither an opportunity nor a threat, 4 – weak opportunity, 5 – strong opportunity).

Concerning the social component, 10 per cent of the travel agencies surveyed failed to respond to
the question pertaining to the impact of the relationship of travel agencies with other non-business actors in
the destination. Fifty-five per cent of travel agencies rated the impact of most of the social factors as being
weak opportunities, giving them scores ranging from 3.5 to 3.8. Travel agencies considered the impact of
the other factors of the social component as being neither an opportunity for nor threat to their project-
based operations (Table 1).
 Table 1
Impact of social factors on the project-based operations of PGC travel agencies

SOCIAL FACTORS Average rating of factor

influence
1. Attitude of residents towards tourism development 3.7
2. Political and social security 3.5
3. Rapid and unpredictable change in the environment 2.9
4. Relations between travel agencies 3.0
5. Relationships of travel agencies with other business and non-business 3.6
actors in the tourist destination
6. Relationships of travel agencies with other complementary enterprises 3.5
7. Relationships of travel agencies with hotel enterprises as business-travel 3.8
project sellers
8. Discontinuity in economic relations between hotel enterprises and travel 2.8
agencies
9. Relationships with key actors in the milieu (PGC tourism market) in 3.2
developing business-travel projects
10 Level of development of the network of relationships with business and 3.0
. non-business actors in PGC as a tourist destination
11 Level of development of the network of relationships with hotel 3.5
. enterprises as business-travel project sellers

Travel agencies see the impact of all factors of the cultural component as being an
opportunity for their project-based operations, giving them scores ranging from 4.8 to 4.5: : promoting
local cultural identity (4.8), cultural and historical heritage (4.7), long tradition in tourism (4.6),
distinctive gastronomic offering (4.5). Of all cultural factors analysed, only the impact of the
uniqueness of cultural events (4.3) was rated as being a weak opportunity, while all other factors
were seen as being strong opportunities.

The average scores obtained for the impact of economic factors on the project-based
operations of travel agencies lead to the conclusion that the majority of travel agencies (80 per
cent) consider the influences of economic factors as being an opportunity. Factors that travel
agencies see as being neither a threat to nor opportunity for their project-based operations are the
cost of project marketing managers and the competitiveness of other travel agencies (Table 2).

Table 2
Impact of economic factors on the project-based operations of PGC travel agencies

ECONOMIC FACTORS Average rating of factor

influence
1. The recognition of the destination on markets based on its brand 4.2
2. Integrated quality of PGC as a tourist destination 4.0
3. Opportunity of year-round operations based on business-travel projects 4.4
4. Managing the project-based development of PGC as a tourist destination 3.8
5. Hotel enterprise partnerships at the PGC level in the offering of business- 3.6
travel projects
6. Upward trend of the business-travel market 3.9
7. Profitability of the business-travel segment 4.2
8. Availability of project marketing managers 3.8
9. Cost of project marketing managers 3.0
10. Competitiveness of other travel agencies 3.3

An analysis of the impact of physical factors indicates that 10 per cent of the travel
agencies surveyed failed to rate the impact of industrial facilities, environmentally conflicting
development options and “green” associations. Considering the importance that the physical
component has for the destination’s tourism product, it should be pointed out that while PGC travel
agencies see industrial facilities as a weak threat, they consider rich natural resources and
ecologically preserved environment as being key strong opportunities (Table 3).

Table 3
Impact of physical factors on the project-based operations of PGC travel agencies

PHYSICAL FACTORS Average rating of factor

influence
1. Rich in natural resources 4.7
2. Ecologically preserved environment 4.5
3. Industrial facilities 2.0
4. Environmentally conflicting development options 2.5
5. “Green” associations 3.4
6. Sustainable development of tourist destinations 4.0

Of the technological components, travel agencies have rated the destination's tourism
facilities (3.9) and the uniqueness of business travel projects (3.7) as being weak opportunities.
Travel agencies do not see the complexity of a business-travel project with regard to the number of
stakeholders involved in the project (3.2) as posing neither a threat to nor opportunity for their
project-based operations.

Of the analysed factors of the international component of the macro environment, travel
agencies have rated forming partnership networks with business and non-business operators at the
international level as being a weak opportunity (4.4), while they see the growing number of
“emerging” business-travel destinations on the international tourism market as being neither a
threat nor an opportunity (2.7)

Of the communication and infrastructure-based factors, PGC travel agencies have rated
PGC’s favourable position in terms of traffic and the level of road-infrastructure development as
presenting weak opportunities for their project-based operations. They consider the influence of the
other factors as being neither a threat to nor opportunity for their project-based operations (Table
4).

Table 4
Impact of communication and infrastructure-based factors on the project-based operations of
PGC travel agencies

COMMUNICATION AND INFRASTRUCTURE-BASED Average rating of factor influence

FACTORS
1. PGC’s favourable position in terms of traffic 4.2
2. Level of road-infrastructure development 3.8
3. Level of airport development 3.1
4. Traffic links between the islands and the mainland 3.3
5. Local traffic 2.8
6. Parking lots and car parks 2.5
7. Tourism signage 2.7

An analysis of the factors of the administrative and institutional component of the macro
environment reveals that 10 per cent of the travel agencies surveyed failed to rate the impact of
strategic documents and plans on their operations. The majority of travel agencies rated the
following factors as being weak opportunities: educational institutions for tourism personnel,
professional and scientific support, and established responsibility of actors in developing PGC as a
tourist destination. The remaining factor of the component of the macro environment is seen as
posing neither a threat to nor an opportunity for the project-based operations of travel agencies
(Table 5).

Table 5
Impact of administrative and institutional factors on the project-based operations of PGC
travel agencies

ADMINISTRATIVE AND INSTITUTIONAL FACTORS Average rating of

factor influence
1. Strategic documents and plans 3.2
2. Educational institutions for tourism personnel 3.7
3. Professional and scientific support 3.7
4. Established responsibility of actors in developing PGC as a tourist destination 3.7
5. Existence of a central actor in the tourist destination, serving as a single source of 3.4
information required by hotel enterprises and other business and non-business
operators

For the most part, travel agencies do not consider the factors of the legal and political
component, the last component of the macro environment as being either an opportunity for or
threat to their project-based operations. Cooperation with politicians and political bodies at the
PGC level in developing business travel-projects is the only factor within this component that travel
agencies have rated as presenting a weak opportunity for their project-based operations (Table 6).

Table 6
Impact of legal and political factors on the project-based operations of PGC travel agencies

LEGAL AND POLITICAL FACTORS Average rating of factor influence

1. Opinions, behaviour and actions of politicians and state officials 3.2
2. Acts, regulations and decisions at the national level 3.1
3. Acts, regulations and decisions at the level of local government 3.1
4. Application of specific regulations and standards in relationships 3.2
between operators in the destination
5. Cooperation with politicians and political bodies at the PGC level 3.8
in developing business-travel projects

Conducted research demonstrates that the majority of the influence of macro-environmental

factors is seen as being an opportunity for the project-based operations of travel agencies in PGC.

CONCLUSION

The performance of enterprises on the market is affected in a variety of ways and to differing
extents by a great number of diverse factors. The influence of all factors of the marketing environment
falls into two basic segments: the marketing micro environment and the marketing macro environment. The
micro environment of tourism enterprises comprises internal factors and factors of the business and
industrial environment, while the macro environment encompasses external factors.

A specific effect of macro-environmental factors is evident in the operations of tourism enterprises

compared with enterprises operating on other markets. This effect is a result of the characteristics of the
tourism product and of the specific way in which the tourism market operates. Hence, an analysis of the
macro environment must involve an analysis of factors and their effects that is more comprehensive than
PEST can provide. PEST analysis is generally used as a framework in researching the macro environment
of enterprises on other markets and includes an analysis of political, economic, social and technological
factors. Because of the specific traits of the tourism market, SCEPTICAL analysis, which includes
social, cultural, economic, physical, technological and international factors, communication and
infrastructure-related factors, administrative and institutional factors, as well as legal and political factors,
is considered as being a more suitable framework for analysing the macro environment of tourism
enterprises.
 The SCEPTICAL analysis of the effects of macro-environmental factors on the project-based
operations of PGC travel agencies demonstrates that the majority of the influence of macro-environmental
factors is seen as being an opportunity for the project-based operations of travel agencies: 55 per cent of
the influence of the factors of the social component, 100 per cent of the influence of the factors of the
cultural component, 80 per cent of the influence of the factors of the economic component, 50 per cent of
the influence of the factors of the physical component, 67 per cent of the influence of the factors of the
technological component, 50 per cent of the influence of the factors of the international component, and 60
per cent of the influence of the factors of the administrative and institutional component. An exception are
the factors of the communication and infrastructure component: 71 per cent of the influence of these
factors is considered as being neither an opportunity nor a threat to project-based operations, while only 29
per cent of their influence is seen as being a weak opportunity. Where the legal and political component is
concerned, 80 per cent of the influence of its factors was rated as posing neither a threat nor an
opportunity, while only 20 per cent was seen as a weak opportunity for the project-base operations of
travel agencies in Primorsko-Goranska County.

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