July 17, 2006

Macro Environment:

Major factors affecting are

• Demographic environment
• Economic environment
• Political environment
• Natural environment

Demographic environment:

• Baby Boom 1946 – 1964

• Gen X(age group 20 years) 1965 – 1976
• Echo boomers 1977 – 1994

Explanations:

Baby boom: 1946 – 1964

Main characteristics
• Wealthy
• More educated and brand conscious
• Mobile.

Generation X : 1965 – 1976

Main characteristics
• Savvy shoppers : very intelligent shoppers
• Under financial pressure
• People were value conscious. They were looking for value for money
• They were looking for social products like environment friendly
products
• Looking for better quality of life
• Job satisfaction
• No personal sacrifices: e.g. people no more save or cut their expenses
to buy some future products like home or do savings for their
children’s.
Echo Boomers : 1977 – 1994

Main characteristics
• All time big spenders: more exp on toys , clothes, furniture
• Sony designing electronic products for kids,
• Banks offering investment and banking services for Kids.

Economic environment:

• Change in income: Factors that affect consumer buying power and

spending patters
o Dual careers couples
o DINK: double income but no kids.
o They are more careful spenders
o Engel’s Law: As income rises : % spending on food utilities
decline, % spending on housing, clothing remains constant, %
spending on savings and health care initially rises and then decline,
% spending on entertainment and insurance rises.

Natural environment:
• Natural recourses that are needed as input by marketer or that are
affected by marketing activities.
• Reasons for marketers to remain aware of natural environment

Technological environment:

Forces that create new technologies, creating new product and market
opportunities

• Effects of technology.
o Antibiotics
o Organ transplants
o Notebook computers
o Internet : helping people to transact and do business any where.
o Nuclear missiles
o Chemical weapons.
Political environments:

Laws, government agencies and pressure groups that influence and limit
various organisation and individuals in a society.

Increased emphasis on
• Ethnic
• Socially responsible actions.

Cultural Environment:

Institution and other forces that affect society’s basic values, perception,
preferences and behaviors.

A. Persistence of cultural values

• Indian believe in
o Working
o Getting married
o Giving charity
o Being honest: these core beliefs are passed on to the next
generation and are reinforced by schools, businesses, government
etc.
B. Shifts in secondary cultural values
a. Impact of popluar music group, movies on
i. Young generation
ii. Clothing
iii. Sexual norms etc.
C. People’s view of themselves
a. Some people seek
i. Personal pleasures
ii. Wanting fum
iii. Change and escape
iv. Others seek self realization through religion, recreation
etc
v. Finally, people buy products and services those match
their needs.
D. People’s view of others:
 a. Internet access has forced people to look for social support
leading to
i. Joining health clubs
ii. Family vacations etc,
E. People’s view of organisation
a. Organisation are finding newer ways to win customer and
employee confidence
i. Linking themselves to social causes.
ii. Using PR to build more positives images
iii. Companies adopting villages to spread literacy
iv. Providing mobile hospitals to remote places.
F. People’s view of society
a. People’s attitude towards society varies
i. Patriots defend it
ii. Reformist change it
iii. Malcontents want to leave it
• People’s orientation towards society influences their
consumption patterns, level of saving and attitude of towards
the market places.
G. People’s view of nature
a. People’s attitude towards nature varies some feel ruled by it
b. Others feel in harmony towards it.
c. Some seek to master it
d. Love of nature – more business: in hiking, camping, fishing etc

Responding to market environment

There are 3 kinds of companies
• Those who make things happen
• Those who watch thing happens
• Those who wonder what happened
• Environment management perspective: in which the firm takes
aggressive actions to affect the public and forces in its
marketing environment rather than simply watching and
reacting to them.