When studying the external marketing environment, there the macro environment is extremely important to know. The macro environment consists of uncontrollable external forces that affect the environment as a whole. This term has a variety of factors that can affect businesses and, by knowing them, will help establish good business practices.
The macro environment includes demographic, economic, cultural, natural, political and social, and technological factors.
- Demographic: This factor is most important to marketers because it involves people, which makes the market. Businesses tend to focus on how their age and family structures, geographic population shifts, educational characteristics, and population diversity changes in order to develop their products to best suit the needs of the current and future populations.
- Economic: This factor is comprised of factors that influence consumer spending such as placing more emphasis on value rather than cost. An example of this is the 2009 Market Crash that affected many people’s ability for discretionary spending.
- Cultural: This factor includes institutions and other forces that affect a society’s basic values, perceptions of each other and businesses, and behaviors towards how that interact in society and where they spend money.
- Natural: This factor includes all the natural resources businesses utilize to create or market products. The natural environment can be affected by changes in weather, shortages or surpluses of materials, or even government intervention through laws.
- Political and Social: This includes legislation regulating business and increased emphasis on ethics. New government legislation can change how businesses interact with the micro environment while social factors put pressure on the marketplace to be sustainable and change inset business practices.
- Technological: This is the most rapidly changing factor that effects the macro environment. New products and opportunities pressure companies to constantly innovate to keep up with the market.
The importance of these macro environmental factors can be represented through my Market Planning Assignment – Part 1. In order to determine if our product, the iPhone K, was good for the market, my group evaluated each factor and how it could affect us. One example is the technological factor: we found that there was a slight increase in smartphones with parental controls and we decided to enter the market based on this data. We can also found the dangers associated with entering the market by evaluating the technological trend that people will innovate on our idea. Knowing each macro environmental factor is vital in order to establish a good business and product and can help in keeping businesses current and able to adapt to changes in the environment.
Learning Portfolio 