The Marketing Macroenvironment - Essay Example

? The Marketing Macroenvironment Table of Contents Table of Contents ……………………………………………………….2 Introduction ……………………………………………………….3 Examples of Macroenvironment Effects on Companies …………………..4 Conclusion ………………………………………………………………6 References ………………………………………………………………7 The Marketing Macro-environment Introduction Throughout history, humans have been seeking their intrinsic needs to survive. This is an instinctive action, which entails the person to become satisfied with their everyday lives. In order to satisfy these needs, interactions and relationships are formed between the people who need and the people who make or sell. Eventually, when all basic needs are met, wants are then addressed to, which can also be satisfied by and addressed by again, people who sell or make these wants. This is defined as one of the central ideas and concepts of marketing (Moore and Pareek 2006). But what is marketing exactly? Well, for one, marketing as a word has many definitions. For the common and layman’s terms, it is associated with selling or advertising. However, it has more meanings to it than that. For one, it is the process of creating, distributing, promoting and pricing goods, services or ideas in order to foster a satisfying relationship between manufacturers or other sources of goods, and the customers (Pride and Ferrell 2012). Also, one of its goals is to maintain this relationship as favorable as possible in order to facilitate more exchanges, not just with the buying customers but also other stakeholders as well, This would include other people that may not be necessarily buying the goods or services, but have financial input in the product or firm. This may also include people that do not have any direct interaction with the company itself, but may have potential as customers or stakeholders in the future. Another definition of marketing is defined by the American Marketing Association in 2005 as: “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” (Ries and Trout 2006). Also, in the realm of marketing, it is said that the customer holds the key as to whether the company or firm would be able to thrive or even become successful in terms of profits and development. Therefore, in order to become successful, a firm or company must be able to give satisfaction to their customers, and this lasting positive relationship between them would define the company as a whole (Silk 2006). The whole concept of marketing has many aspects as well as other deciding factors in the course of action of a firm or company. These would very well depend on the marketing environment. It is defined as the environment surrounding a company and its organization which can have an effect on its profits or even its reputation (Petzer, et al. 2006). For example, in the law of supply and demand, if there is low supply and a large demand, all competing companies would have a chance to create relationships to all customers, and by creating better services than the competition would make the company successful. However, if there is a large supply coming in from different competing groups of companies, the competition would be tougher since there would be more opponents to face, as well as the large market being divided among the competitors. Thus, being able to stand out among the rest would really make or break the company as a whole, as compared to only having a few competitors at hand (Petzer, et al. 2006). The marketing environment also has different factors that can affect it. These can be either be the microenviroment or the macroenvironment. The microenvironment is found in the company organization itself. The influence of the organization and the stakeholders as a whole in relation to the product development or the ruling over the employees define this internal structure of the company (Groucutt, Leadley and Forsyth 2004). Also, the company has control over the customer group, its suppliers, the middlemen as well as the competitors (Rix 2010). As a whole, the microenvironment is the marketing environment that is mostly controlled or has greater control by the company and its organization as a whole (Lamb, Hair and McDaniel 2008). On the other hand, macroenvironment is something larger, which encompasses as an influence greater than the organization itself. It is something that the company and its organization has little or almost no control over, and is governed by different outside influences such as demographic trends in the market, various economic trends, the competition or the competitive environment, socio-cultural trends, political and legal trends, as well as the technological trends (Rix 2010). In order for the company to be able to swim with the changing tides, there should also be adaptations in order to remain in the niche as well as to keep their loyal customers, or even in the country that they maintain or plan to establish a market in. This shows that the macroenviroment shows the way on how to adapt to different kinds of people as well as the ever changing views and trends in a nation or a state. Examples of Macroenvironment Effects on Companies In order to give examples as to how the macroenvironment affects the marketing environment of companies, three factors will be discussed. First is the changing demographic trends in the market. An example for this is the success of PETCO in terms of gaining a niche in the pet food market (Pride and Ferrell 2012). Aside from recognizing the changing trends among pet owners, wherein there is a visible increase of people who are willing to buy expensive food for their dogs or cats, as well as by being accessible to their customers by being conveniently located near groceries or shopping centers, PETCO has been able to become the second best performing pet supply retailer in the nation. This is not so shabby, considering that they have more than 1000 stores in the country. By being able to adapt to the demographic changes in the market, PETCO was able to establish itself and create its own group of loyal customers in a short span of time. Technological trends can make or break a company’s status in relation to the competition. If a company is not able to follow with the advancement of technology, not only will they lose customers, but also their profits as well. Prudential PLC in the UK was an insurance company that were selling directly to customers since the early 20th century. However, in the era of emails and SMS, the company recognized the need to reevaluate their marketing strategy to suit the new trends in the market (Groucutt, Leadley and Forsyth 2004). Aside from the problems of redundancies in their work forces, there were also a lack of regulatory compliance way back in the 1990’s that in order to cut back on costs, the company planned to focus on the use of new technological trends such as the internet and just retain their direct sales staff to affluent customers instead. By utilizing telemarketing and internet sales, the company was expected to gain an annual gross cost savings of up to ?135 million in the year 2002. Also, the use of the internet was very effective since almost 90% of customer interaction was done via e-mail, the internet and the telephone. Although the restructuring could still cost Prudential up to ?110 million, by being able to adjust the company structure they were able to retain their customers at a lower cost than having redundant workforces in their internal organization. Socio-cultural trends also help shape the macroenvironment of many companies. In the new millenium, social networking sites are able to change how the youth sees the world. The teens and twenty-somethings are much more logged-in on the web as compared to other age groups, which would give rise to new marketing strategies such as creation of products that cater to their wants, in an easy to access form such as simple advertisements on websites, or having dedicated webpages to the product (Lamb, Hair and McDaniel 2008). Companies that are able to follow this trend could also cater to the spawning trend of mobile technology, ranging from phones to computers, tablets, etc. By realizing that aside from being highly opinionated as well as tech-savvy, the market recognizes the emergence of a new set of customers that not only follow trends but also feel the need to interact with people, and products are being shaped by observant technology companies to suit the wants of their target niche. Conclusion Figure 1. Components of Marketing Strategy (Pride and Ferrell 2012) Figure 1 summarizes the whole concept of marketing as a whole. While the customer is the center as well as the key in a company’s success or ruin, the internal organization of the company can still be within their control. The product, its price, its places of distribution, as well as the form of promotion can be governed or controlled by the company itself. However, external factors such as socio-cultural trends, technological trends, legal and political trends, economic and demographic changes as well as the competition could also shape how a company would be able to stand out among a large sea of other providers. In order for them to become truly successful, such changes must be monitored, along with coping strategies in order to gain more satisfied customers as well as in maintaining those loyal not just to their product, but to their name as well. Reference List Groucutt, Jonathan, Peter Leadley, and Patrick Forsyth. Marketing: Essential Principles, New Realities. London: Kogan Page Limited, 2004. Lamb, Charles W., Joseph F. Jr. Hair, and Carl McDaniel. Marketing. Mason, OH: Thomson Higher Education, 2008. Moore, Karl, and Niketh Pareek. Marketing: The Basics. Abingdon, Oxon: Routledge, 2006. Petzer, D., et al. Fresh Perspectives: Marketing. Pinelands, Cape Town: Maskew Miller Longman (Pty) Ltd., 2006. Pride, William M., and O. C. Ferrell. Marketing. Mason, OH: South-Western Cengage Learning, 2012. Ries, Al, and Jack Trout. Marketing Warfare. New York, NY: McGraw-Hill Companies, Inc., 2006. Rix, Peter. Marketing: A Practical Approach (7th Ed.). North Ryde, NSW: McGraw-Hill Australia Pty Ltd., 2010. Silk, Alvin J. What Is Marketing? Boston, MA: Harvard Business School Pulishing Corp., 2006. Read More