Wednesday, November 10, 2010

MACRO ENVIRONMENTAL ANALYSIS

>>  Demographic Environment
Factors relating to population, such as size, growth rate, age distribution, religious composition and literacy levels and aspects like composition of workforce, household patterns, regional characteristics, population shifts etc., need to be studied as they are all part of the demographic environment. 


>> Economic Environment
Economic environment determines the strength and size of the market. The purchasing power in an economy depends on current income, prices, savings, circulation of money, debt and credit availability. Income distribution pattern determines the marketing possibilities. The important point to consider is to find out the effect of economic prospects and inflation on the operations of the firms.

 
>>Government Environment
Business is highly guided and controlled by government policies. Hence the type of government running a country is a powerful influence on business and marketing gets affected.


>> Legal Environment
Firms prefer to operate in a country where there is a sound legal system such as in US. Marketers must have a good working knowledge of the major laws protecting consumers, competitions and organizations. Laws like MRTP, Consumer Protection Act, Intellectual Property Right, FEMA, Labour Laws etc., can considerably affect business operations.

 
>> Political Environment
Political pressure groups influence and limit organizations e.g., the case of Enron in Maharastra and KFC in Karnataka. Special interest groups and political action committees put pressure on business organizations to pay more attention to consumer's rights, minority rights, and women’s rights.

 
>> Cultural Environment
The beliefs, values and norms of a society determine how individuals and organizations relate to each other. The core beliefs of a particular society tend to be persistent, as the American value system of work, charity and honesty. It is difficult for marketers to change these core values, which have a major bearing on marketing operations in as much as they set the stage for marketing activity and consumer response.

 
>> Technological Environment
The most important factor, which is controlling and changing the human society and even impacting the future, is technology. Technology has literally transformed the way people think, work and relax. Man could realise his dream of putting an astronaut on the lunar surface, the moon, going to the other side of the globe within a few hours, and even exploring the mysteries of the solar system.


>> Global Environment
The global environment is also rapidly changing. The new concept of global village has changed how individuals and organizations relate to each other. The advent of worldwide terrorism has the power to turn a booming economy into a stagnant one within no time.