Discuss how the six macro-environments (demographic, economic, natural, technological, political, and social/cultural) forces may affect the marketing of a drink or food company.

Only available on StudyMode
  • Download(s): 3233
  • Published: November 14, 2004
Read full document
Text Preview
Discuss how the six macro-environments (demographic, economic, natural, technological, political, and social/cultural) forces may affect the marketing of a drink or food company.

Companies and their suppliers, marketing intermediaries, customers, competitors, and publics all operate in a macro-environment of forces and trends that shape opportunities and pose threats. Within the rapidly changing global picture, the firm must monitor six major forces: demographic, economic, natural, technological, political-legal, and social-cultural. Although described separately, marketers must pay attention to their interactions, because these will lead to new opportunities and threats.

Demographic Environment

In the demographic environment, marketers must be aware of worldwide population growth; changing mixes of age; ethnic composition, and educational levels; the rise of nontraditional families; large geographic shifts in population; and the move to micromarketing and away from mass marketing.

Worldwide population growth: the world population is showing "explosive" growth, totaling 6.1 billion in 2000 and will exceed 7.9 billion by year 2025. A growing population does not mean growing markets unless these markets have sufficient purchasing power. Nonetheless, companies that carefully analyze their markets can find major opportunities.

Ethnic and other markets: countries also vary in ethnic and racial makeup. At one extreme is Japan, where almost everyone is Japanese; at the other is the United States, where people from come virtually all nations. Each group has certain specific wants and buying habits. Several food, clothing, and furniture companies have directed their products and promotions to one or more of these groups.

Pepsi-Cola: since there will be more older people and Pepsi-Cola has been traditionally a young people's drink, Pepsi will have to stimulate consumption by older members of the society. If Pepsi-Cola were to enter Japan, they may have cultural setbacks too. The reason being might be their habits of drinking tea instead of soft drinks.

Economic Environment

Markets require purchasing power as well as people. The available purchasing power in an economy depends on current income, prices, savings, debt, and credit availability. Marketers must pay close attention to major trends in income and consumer-spending patterns.

Income distribution: marketers often distinguish countries with five different income-distribution patterns: (1) very low incomes; (2) mostly low incomes; (3) very low, very high incomes; (4) low, medium, high incomes; and (5) mostly medium incomes. Marketers must pay careful attention to major changes in incomes, cost of living, interest rates, savings, and borrowing patterns because they have a strong impact on business.

Consumers will probably still have money to spend on Pepsi. However, if the price of Pepsi accelerates dramatically, consumers will switch to substitutes like plain water.

Natural Environment

in the natural environment, marketers need to be aware of raw materials shortages, increased energy costs and pollution levels, and the changing role of governments in environmental protection.

Shortage of raw materials: the earth's raw materials consist of the infinite, the finite renewable, and the finite nonrenewable. Infinite resources, such as air and water, are becoming a problem such as water shortages. Finite renewable resources, such as forests and food, must be used wisely. Forestry companies are required to reforest timberlands in order to protect the soil and to ensure sufficient wood to meet future demand. Finite nonrenewable resources - oil, coal, platinum, zinc, silver, will pose a serious problem as the point of depletion approaches.

Increased energy costs: dramatic rise in oil prices can also create a renewed search for alternative energy forms. Firms like Toyota, engaged in building practical electric automobiles like Toyota Prius....
tracking img