Macro-Environment

Macro-Environment

1. Demographics

   • The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics
   • This is complex in South Affrica
   • Trends in Changing World Demographics
     • Changing Age Structure
     • Income
     • Movement between countries
     • Language trends

2. Economic

   • Factors that affect consumer buying power and spending patterns.
     • Changes in Real Income
       • Inflation Rate
       • Growth Rates
       • Interest Rates
       • GDP per Capita
       • GDP per Household
       • Useful to note changes across different groups in society, based on demographics.
     • Changing Spending patterns
       • Engel’s Law: As family income rises, the % spent on food declines, housing remains constant and everything else increases
       • Consumer Confidence
         • Consumer confidence is the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.
         • How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy
         • A month-to-month diminishing trend in consumer confidence suggests that in the current state of the economy most consumers have a negative outlook on their ability to find and retain good jobs.
         • Varies across different population groups
         • Other Factors
           • GDP growth
           • Weakening currency
           • Impact of oil prices

3. Natural

   • Natural Resources that are needed as inputs by marketers or that are affected by marketing activities
   • More a concern internationally
   • Strongly driven by consumer action groups and concerned organisations
   • Major Drivers
     • Resources
     • Consumers
     • Legislation
     • Formal Media
     • Government Intervention

4. Technological

   • Forces that create new technologies, creating new product and market opportunities
   • Issues
     • Rapid pace of change
     • High R&D Cost
     • Not always needs-driven
     • Often resisted because of cost implications and attitudes
     • Focus increasingly on on-­‐going adaptation rather than macro change
     • Often governments needs to increase regulation
   • Escalating Influence of technology
     • High Cost
     • Competitive advantage
     • Short life cycles
     • Range of choices
     • Innovation process
     • Complexity in analysis of customer needs
     • Rise of the innovative company
     • Need to integrate with existing technology
   • The other side of technology
     • High risk
     • Short time frames
     • Be aware of the lack of technology
     • Africa has limited and expensive access to internet
   • Impact of technology
     • Marketing in home
     • Retailing
     • Information
     • Pharmaceuticals
     • Clothing

5. Political

   • Laws, government agencies and pressure groups that influence and limit various organisations and individuals in a given society
   • In South Africa
     • Consumer Protection Act
     • King 3
     • Has a stable political environment, thus the legal system is sophisticated, consistent; laws rigorously considered, aren’t easily repealed, replaced etc
     • National Credit Act
   • Push towards the societal marketing concept
   • Governments set laws (often reactively) and often have influence over strategy

6. Cultural

   • Institutions and other forces that affect society’s basic values, perceptions, preferences and behaviours.
   • This affects
     • How people consume
     • What people consume
     • Where they purchase products
   • SA is a multi‐cultural country
   • Often segmentation (by Demographics) also coincides with cultural aspects

7. Definition

   • The larger societal forces that affect the micro-environment.
   • External forces that shape the world, the environment, the people
   • Can pose both threats and provide opportunities to a company