Macro Environment

Topics: Marketing, Marketing mix, Pricing Pages: 7 (2194 words) Published: May 20, 2011
Macro Environment
The larger societal forces that affect the microenvironment- demographic, economic,natural, technological, political, and cultural forces. These factors represent constraints within which all organizations including the automobile industry must function. Macro Environment For any decision there is n number of factors which influences the decision. Be it a decision related to any organisation, any business concern or even an individual. Thus it is per se very much necessary to understand the influence of each parameter. The factors which influence a decision are also termed as its environment. The environment can be Internal, can be controlled by the organisation; Micro, specific to the industry and is different for different industries; and lastly Macro, generic in nature and impacts the whole business environment.

The Macro Environment includes all the factors which are external to the firm and which cannot be controlled by the organisation. And also they are not specific to any industry but influence all the firms but the influence may be at different level. As a Marketing manager, on musty have knowledge of different factors which influences the marketing decision of a firm, And also since they are not controllable, one must adjust the decisions as per the changes in the environment.

The Important factors comprising the Macro Environment of Marketing are Demographic, Economic, Socio-Cultural, Natural, Technological and Political-Legal. Influence of each factor shall be discussed in detail in the following parameters. DEMOGRAPHIC ENVIRONMENT Demographic, as the name signifies is related to population and population mix. It is people who make market. It is they who contribute to demand and also it is manpower which helps in produce and supply. Thus as a marketer, on must understand the demographics on the nation and also due to globalisation, global population also influences the decisions.

The Important factors comprising the Macro Environment of Marketing are 1.Political
5.Technological and
1. Political Factors
Government at all levels is an important component of the general environment no organization or industry is immune from the various decisions made by the government. The Pakistan, Government’s in consistent policies, frequent change in duty tariff and smuggling are main reasons of unstable market conduction. Like other motor companies Toyota is also affected by the current changing policies of the government.

Previously the automobile industry had to cope with more than 77000 yellow cabs that were imported during the yellow cabs scheme and was later turned lose to the market after a change of government and the policy scrapped. In 1995, all the previous taxes and duties were rolled into one import duty of 30 percent on CKD kits as well as CBU vehicles. In 1996 the sales tax on CBU was increased cost to 18 percent. In 1997 the ministry of industries and production recommended that duty on CKD be reduced form 40 percent to 35 percent while the car sales should be exempted from CVT and the deletion programme should be accelerated.

Just a few days back the general sales tax has been increased to 15 percent promoting more price like. So there is going to be a Rs.20000 increase in vehicles.

2. Economic Forces
Government economic policies at the federal level clearly influence the ability of the industries to survive and progress. Inflation is a major economic factor which has affected the Pakistan. Automobile industry including Toyota. The current inflation rate is 21% to 23% annually prices in the auto market were deregulated in 2000 and grew almost 20 percent to 30 percent per annum to allow Toyota to bring their prices to profitable levels. After three years of “Still Market”, the market picked up. The recent increase of 15 percent sale tax is however, going to result in a price increase.

3. Demographics Forces...
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