Macro and Micro

Environments 
By John Usher Dizzle Chua
Samples of Microenvironment

Microenvironment refers to the environment

which is in direct contact with company and
affects the routine activities of business
straight away. It is a collection of forces or
factors that are close to the organization and
can influence the performance as well as the
day-to-day activities of the firm. Six
components of microenvironment
are: Company, Suppliers, Marketing
Intermediaries, Competitors, General
Public and the Customers.
 Examples

Company: All departments within an organization have a the potentially positively or

negatively impact customer satisfaction. For example, finance determines price and budgets,
purchasing puts in place the right suppliers, research and development is responsible for
putting together studies for product improvements, and manufacturing departments produce
the products themselves.

Company: Employees are important because they drive value through customer satisfaction
and embody the marketing concept. They are vital interface between a brand and its
customers. People buy from people they enjoy building close customer relations.
 Examples

Suppliers: Demand for many of its household cleaning products exploded around the world due to
Covid-19. Unilever benefited much from this when it shifted its supply chain to a digital end-to-end
ecosystem supplier. The use of AI across the production process allowed some operators to work from
home during lockdown. The change resulted in the company launching hand gel brand Lifebuoy brand
in 50 new markets in less than 100 days.

Suppliers: When Tesco saw seven weeks’ worth of stock of some products selling out in one week in
early lockdown, the supermarket knew it had to act fast. The company worked closely with suppliers to
simplify ranges on the most in-demand products, reducing the number of toilet rolls in their range from
33 to 10 different types. Tesco also cut multi-buy promotions so that suppliers could focus on meeting
the increased demand. In turn, the supermarket was able to boost its online deliveries to the most
vulnerable customers. These changes resulted in the company having to hire hundreds more staff to
fulfil demand.
 Examples

Marketing Intermediaries: Berkshire Hathaway is the leading insurance company today. It

takes pride in insuring that its values are reflected in its insurance agents. The company
values trust, integrity, stability, longevity and the highest standards of work. All agents
should embody these values.

Marketing Intermediaries: McDonald’s is widely recognized as being a leader in

projecting its brand through marketing and advertising. While McDonald’s uses many
agencies for co-op advertising, Leo Burnett Worldwide is their biggest agency of record.
Burnett, known for innovative advertising, has led McDonald’s into the top spot for
influential ads.
 Examples

Competitors: Having competitors draws companies to improve their products. Netflix.

Originally launched as a DVD-player-by-mail service. In later years, due to tight
competition with cable companies, the company expanded its services to to offer a wide
variety of movie-watching options, including online streaming. Although it initially
appealed to a small subset of consumers, it gained a large following because of its
innovative offerings.

Competitors: iPhone and Samsung are a great example of competitors outdoing each other
in product innovation to captivate their market. Although the iPhone still holds the lead,
Samsung’s recent change in direction, from prioritizing profit margins to placing more
efforts on competitiveness, will surely see new features to its high end gadgets.
 Examples

General Public: Pepsi pulled an ad after it was widely mocked and criticized for appearing
to trivialize protests for social justice [Link] ad showed Kendall Jenner, a member of
the “Keeping Up With the Kardashians” reality TV family, stepping away from a modeling
shoot to join a crowd of smiling, young protesters. The protesters cheered after Jenner
handed a can of Pepsi to a police officer, who took a sip. Immediately after it’s release,
twitter users pounced, accusing the ad of trivializing Black Lives Matter protests and the
issues it targets. 

Customers: Knowing your customers is very important, their culture and their language.
When Pepsi brought a new slogan to the Chinese market, it was “Pepsi brings you back to
life”. Unfortunately the phrase in Chinese translated to “Pepsi brings your ancestors back to
life” Pepsi needed to revamp its Chinese campaign.
 Factors of Macroenvironment
● Demographic environment

Demography can be defined as the study of human population in context of size, density, age, location,
gender, race, occupation and other statistics. The marketers have special interest in the demographic
environment because it consists of people and people are the driving force for development of markets.
The large and diverse demographics offer both opportunities as well as challenges for businesses.

● Ecological environment

It refers to the natural resources or physical environment that are required as inputs by marketers or which
is affected by the marketing activities. The ecological conditions have become a crucial factor to consider
as the environmental concerns have grown strongly in the recent years. Example, air and water pollution,
floods, droughts, etc.

● Political environment

The developments in the political environment strongly affect the marketing decisions. This involves laws,
government agencies, as well as the pressure groups that can influence or give constrains to various
individuals or organizations in a given society.
 Factors of Macroenvironment
● Socio-Cultural environment

The socio-cultural environment links to factors which affects the basic values, preference, perceptions
and behavior of the society. Organizations needs to understand the cultural beliefs and practices
prevalent in society for marketing decision making. Failure of companies in understanding foreign
cultures can lead to many cultural blunders. For example, a symbol having a positive meaning in one
culture can have a negative meaning in some other culture.

● Technological environment

Technology has a crucial influence in the macro environment. An organization needs to perform a
thorough research on the spread and use of technology, before investing in any of marketing activities.
The company needs to have an understanding of the technology penetration as well as user interface
technology in the region and make plans accordingly for their communication and campaigns.
 Micro Environment Influence To Marketing Planning

The micromarketing environment is vast and diverse, consisting of controllable and uncontrollable factors. A good grasp of your

marketing environment helps to:

 Identify opportunities: Understanding your marketing environment helps you notice and take advantage of market
opportunities before losing your edge. For example, say your marketing team sees an uptick in digital buying over in-shop
sales. You may decide to allocate more resources to your online marketing funnel to drive more sales. 

 Identify threats: Studying your marketing environment alerts you to potential threats which may affect your marketing
activities. For example, a market leader could diversify their product portfolio to compete with your organization.
Foreknowledge of this can help you strategize your marketing efforts to maintain and grow your market share.

 Manage changes: Paying attention to the marketing environment also helps manage changes and maintain growth in a
dynamic economy. Marketing managers can forecast and determine timely marketing campaign strategies by monitoring their
marketing environment. 
 Macro Environment Influence to
Market Planning

Every business is affected by macroenvironmental forces. They can increase or

decrease the need for your product, or create entirely new product needs. Raw
material costs might be driven up or down. New target markets might be created
or old ones changed.

What’s important for a company is to identify those macroenvironmental forces

that directly affect their business, which means understanding the nature of those
forces and how to identify and analyze them.

●  
 Macro Environment Influence to
Market Planning

Staying Aware of Demographics

Businesses need to be aware of changes in the general population. Is the age
distribution changing? Are household patterns changing? Major changes in
ethnicity are critical to identify.
Watch population shifts to see if the populations in cities, suburbs or rural area are
changing to determine if segments of the population are leaving one area for
another. The same holds true for geographic areas. Are people leaving one region
of the country for another? Past demographic trends would include the shift from
cities to suburbs in the 50s and 60s, the aging of the Baby Boomer generation
currently, the growth of the Hispanic population over the last 20 years and the
growing acceptance of the gay community recently.
 
 Macro Environment Influence to
Market Planning

The Effects of Economics

In a recession, people lose jobs, or worry about that happening to them. This
makes consumers less willing to spend their disposable income. However, in an
economic expansion, job security makes people more willing to spend their
disposable income. If your customers use disposable income to buy your product,
knowing where you are in the economic cycle helps you plan production.
Look at income distribution to see if certain segments of the population are
growing wealthier and acquiring new needs. For example, a major reason that
China is seen as an attractive market is a rapidly growing Chinese middle class
that desires an increasing range of consumer goods.
 
 Macro Environment Influence to
Market Planning

Social and Cultural Effects

Every nation has a set of core cultural beliefs that are passed from generation to
generation. Changes in these core beliefs affect consumer purchases. Once
taboo, single-parent families are now considered mainstream and are growing,
creating a whole new set of product needs. Preferences for music, entertainment,
exercise, eating habits or leisure time activities change with time, creating new
needs or lessening past needs.
 
 Macro Environment Influence to
Market Planning

Impacts of Technological Developments

The development of new technology can dramatically affect needs and wants. For
example, the Internet completely changed the way people communicate. If you
walk into any electronics retailer or department store, you will literally see
hundreds of new products that were directly tied to the growth of the Internet.
That shift to the Internet resulted in new consumer needs and wants, opening the
door for smart companies to take advantage of that opportunity. Today, the pace
of technological change constantly provides opportunities for new products.
 
 Macro Environment Influence to
Market Planning

Megatrends Causing Large Scale Impacts

Most of the forces discussed here will only affect certain segments of consumers
and businesses. Their effects will diminish over time. A few forces, however,
affect nearly every segment of our civilization, and their effects last generations.
We refer to these forces as megatrends.
Some historical megatrends might be the printing press, the incandescent light
bulb and the telephone. Today, the Internet appears to fall into that category as
well.