ALIGARH MUSLIM

UNIVERSITY
Murshidabad centre
Session 2021-22

Topic : Macro Environment and

Marketing

Submitted by :
Somaiya Sabri (21BAMMW337)
Konain Hassan Naqvi (21BAMMW327)
Aadil Qaiser (21BAMMW322)
Alisha Fatima (21BAMMW184)
Mohammad Mohsin Khan (21BAMMW179)

Submitted to : Dr. Nigamananda Biswas

 Department of Business Administration
Aligarh Muslim university, Murshidabad
MARKETING AND THE CONCEPT OF
MACROENVIRONMENT.
Marketing:-
• It refers to all internal and external factors, which directly or indirectly influence the
organizations decisions related to marketing activities.
• Internal factors are within the control of an organisation; whereas, external factors do not
fall within its control.
• In the field of marketing, the macroenvironment is the set of external factors and forces,
not controlled by the company, that influence it’s development.
• It mainly includes demographic, economic, cultural, technological, legal or political
elements.

DEMOGRAPHIC ENVIRONMENT
 It is the study of human populations in terms of size, density, location, age, gender,
race, occupation and other statistics.
The demographic environment is of major interest to marketers because it involves people,
and people make up markets.
 The world population is growing at an explosive rate. A growing population means
growing human needs to satisfy. Depending on purchasing power, it may also mean
growing market opportunities
MAJOR TRENDS
IN

DEMOGRAPHIC ENVIRONMENT
 Worldwide population growth: 6.1 billion in 2000 -7.9 billion in 2025.
 There are two major concerns:
1. Certain natural resources are limited and non replaceable.
2. Population growth is highest in poor countries.
 Population age mix: Marketers are required to know the proportion of various age
groups in the population.
 Household patterns: Traditional family is replaced by nuclear family. From single
earning family to dual earning family.
 Geographical shifts in population: people are migrating from rural areas to urban
areas.

DEMOGRAPHIC ENVIRONMENT IN INDIA

 Increasing population
- Rapid growth in urban population in India.
- In India, urban population to rise to 523 million by 2025.

 Change in family structure

 Changing role of women
 A growing middle class
- One study MGI India divided the Indian population into 5 economic classes
- Division based on real annual disposable income

• 1. Deprived households have an annual disposable income of less than rupees 90,000
• The poorest economic class, mostly unskilled or semi-skilled workers on daily
wages.
• 2. Aspirers have an annual disposable income in the range of RS90,000 to RS200000
• Spend most of their income on basic necessities, small time retailers,small farmers
etc
• 3. Seekers have an annual disposable income between RS200000 and RS500000. Mostly
white collar employees, mid level government officials, newly employed post-graduates,
medium scale traders.
• 4. Strivers have an annual income ranging from RS500000 to RS1000000
- Have a stable income source and access to amenities
- Mostly professionals such as lawyers, CA’s, senior government officials, rich farmers

• 5. Global Indians have an annual disposable income in access of RS1000000

- Creamy layer in society, globe-trotters with a high standard of living.

Economic environment
The economic environment refers to all the economic factors that affect commercial and
consumer behaviour. The economic environment consists of all the external factors in the
immediate marketplace and the broader economy. These factors can influence a business,
i.e., how it operates and how successful it might become.

The economic environment consists of different things for different people.

For example, for a farmer, the weather and price of fertilizers are important factors.

For a TV channel on the other hand, the growth in Internet advertising matters a great deal,
but not the weather. Internet advertising matters to a TV station because the Internet
competes for advertising business. For a farmer, however, advertising media is not
important.

“The term economic environment refers to all the external economic factors that influence
buying habits of consumers and businesses and therefore affect the performance of a
company.”

“These factors are often beyond a company’s control, and may be either large-scale (macro)
or small-scale (micro).”

Economic environment – factors

The economic environment consists of microeconomic and macroeconomic factors.

Microeconomic factors
The microeconomic environment refers to things that happen at the individual company or
consumer level.

Microeconomic factors do not affect the whole economy. Below are some microeconomic
factors that may influence a business:

1. Competitors.
2. Demand.
3. Market size.
4. Suppliers.
5. Supply.
How you supply your goods, i.e., the distribution chain.
For example, through retail stores, distributors, the Internet, etc.

Macroeconomic factors
The macroeconomic environment, on the other hand, refers to things that affect the entire
economy. Macroeconomics is concerned with general or large-scale economic factors, such
as:

1. Unemployment
2. Inflation.
3. Interest rates.
4. GDP growth. GDP stands for Gross Domestic Product. In other words, is the economy
in recession, is it booming, etc.?
5. Taxes.
Exchange rates, i.e., how much currencies are worth in relation to one another.
How much discretionary income consumers have, i.e., income after paying tax, social
security, etc.
Levels of consumer confidence.
Savings rates.
Business people cannot control their economic environment. However, they can evaluate
conditions in the marketplace before deciding whether to proceed with a plan or project.

TECHNOLOGICAL ENVIRONMENT
 Technological factors are those
variables rely on current,
available and change in
technology. These factors may
be technological product and
process.
  The changing trends in the advancement of technology are very rapid. Theses
technological changes can affect business negatively or positively, if not
responded properly.
 These changes can positively improve business productivity, cut cost and
minimize production and distribution cost.
 It can also have a negative affect over business like if the companies that do not
keep up with the technological change soon will be find their products outdated.
 Also marketers have to be aware of the government regulation applying for
consumer safety when applying new technologies and developing new products.
The technological environment is becoming a lot more important in the modern day
business environment. New technology produces new opportunities for companies
and organization to create , sell and promote a product. Technology is rapidly
growing and forever changing.
 Telecommunication technology e.g. cellphones and laptop are increasing the
opportunity within an organization to promote and sell a product.
 The internet has made information available to the consumer to easily compare
current price of a product or service with the price of competitors of the same
product or service. The internet has also created more opportunities to market the
product or service via social media.

There also list of examples which can confirm that technology is changing rapidly and we as
human beings must have to adapt this change in our daily lives..

For example,

1. federal express demand lowered with the invention of fax machine.

2. Record stores have vanished due to no business as people are more towards downloading
songs from internet.

3. With recent improvements in technology and computerization, marketing and selling of

product is now possible online leading to increase in sale and output of many firms.

NATURAL ENVIROMENT

The environment factors of the PESTEL analysis include natural resources that are affected
by the process selling and marketing products or service.

The natural environment is important factor of the macro-environment. This includes the
natural resources that a company uses as inputs that affects their marketing activities. The
mains environmental trends that needs to be considered while evaluating the natural
environment are :

1. Increased pollution
2. Shortages of raw material
3. Government regulation are creating practices that encourages environmental
sustainability.
4. Increased cost of energy
5. A business might for example utilize recycle and biodegradable packaging, thus
making the most of the environmental opportunities to create a sustainable
organization in the current natural environment
Political-Legal Environment
 The political and legal environment consists of laws, government agencies, and pressure
groups that influence and limit various organisations and individuals.
 Sometimes these laws create new opportunities for business.
 For example- mandatory recycling laws have given the recycling industry a major boost
and spurred the creation of dozens of new companies making new products from
recycled materials (say, Eco-Hike, Greenree, Act Paper Wings, Rimagined etc. are some
such companies).

Two major
trends in
the political-legal environment are-

 Increase in business legislation:

Business legislation has four main purposes:
- to protect companies from unfair competition
- to protect consumers from unfair business practices
- to protect the interests of society from unbridled business behaviour
- to charge businesses with social costs created by their products or production
processes.
Legislation affecting business has increased steadily over the years. In India, it is
mandatory that all packaged food products should carry the “green dot” to denote pure
vegetarian products and “red dot” to indicate non-vegetarian products. Similarly, all
packaged products in India should mention maximum retail price on MRP on the package.
 Growth of special interest groups : An important force affecting business is the
consumerist movement- an organized movement of citizens and government agencies
to improve the rights and powers of buyers in relation to sellers.
In order to protect the interests of consumers, the Government of India passed
legislation under the Consumer Protection Act, 1986. The six rights of a consumer are:
- Safety: The right to be protected against the marketing of goods and services that
are hazardous to life and property
- Information: To protect the consumers against unfair trade practices and the right to
be informed about the quality, quantity, purity, standard and price.
- Choice: The right to choose a variety of products and services at competitive prices.
- Representation: The right to be heard and be assured that the consumer’s interest
are received due considerations at appropriate forums
- Redressal: The right to seek redressal against unfair and restrictive trade practices
and unscrupulous exploitation of consumers.
- Consumer education: The right to educate the consumers.

Social-Cultural Environment
 In the social-cultural arena, marketers must understand the influence of languages,
religion and customs that shape the basic values and attitudes of consumer preferences,
habits and behaviour.
 Core beliefs and values are persistent and are passed on from parents to children and
are reinforced by schools, religious institutions, businesses and government.
 Secondary beliefs and values are more open to change and include people’s view of
themselves, others, organisations, society, nature and the universe.
 Values, attitudes and aspirations of people vary significantly across different consumer
groups and regions.
 The implications from the cultural diversity and regional differences suggest the need to
conduct customised research on consumption behaviour and attitudes, specific to
products and services that the marketer is interested in.
 It is not feasible to draw generalizations from the macro-level data to make specific
marketing decisions.
Responding to the Marketing environment
There are two approaches organizations can follow while responding to the
environmental forces of marketing forces. These are popularly known as reactive
marketing and proactive marketing:

1. Reactive Marketing
The reactive marketing views marketing environmental forces as totally uncontrollable and
difficult to predict. This is a passive approach, under which, the organization tries to adjust its
marketing mix and program according to the changes in the environment. The adjustments
take place only after changes occur in the environment. The organization analyses the
environmental changes and finds suitable way to avoid the threat and utilize the new
opportunities in the market. In essence, they wait for the environment to change and react
only after the change takes place.

2. Proactive Marketing
Organizations that adopt the environmental management perspective follow proactive
marketing. Proactive marketing believes that although many of the environmental forces
such as demography, economy, culture and natural factors are not controllable, the
environmental forces such as politics, law and technology can be influenced by correct and
calculated moves. Proactive marketing uses political, psychological, economic and public
relations skills ti influence the environmental forces to the organization's benefits. The
technique of political lobbying, financing political parties and elections, using publicity to
shape public opinion and many others are used by organizations to bring the environmental
forces to their favour.

Companies can passively accept the marketing environment as an uncontrollable element to

which they must adapt, avoiding threats and taking advantage of opportunities as they arise.
Or they can take a proactive stance, working with environmental changes rather than simply
reacting to them. Whenever possible, companies should try to be proactive, rather than
reactive.