Download Macro environment - Midlands State University

MIDLANDS STATE UNIVERSITY
FACULTY OF COMMERCE
DEPARTMENT OF MARKETING
Name
Ethel
Surname
Mathonsi
Student Number
R11 534V
Programme
B.Com Marketing
Course
Sales and Marketing Forecasting
Course code
MM 202
Lecturer
Mrs Ngwenya
Type
Visiting
Year
2.1
Question
With the aid of examples, discuss how the micro and macro environmental factors have affected
salesforce management from 200 to date in Zimbabwe. (40 marks).
The market environment refers to factors and forces that affect a firm’s ability to build and
maintain successful relationships with customers. Three levels of the environment are: Micro
(internal) environment is the forces within the company that affect its ability to serve its
customers. environment is the industry in which a company operates and the industry’s
market(s). Macro (national) environment is the larger societal forces that affect the
microenvironment. The sales force management system? are the information systems used in
customer relationship management marketing and management that help automate some sales
and sales force management functions.
The economy of Zimbabwe has shrunk significantly after 2000, resulting in a desperate situation
for the country and widespread poverty from among others 94% unemployment. The
participation from 1998 to 2002 in the war in the Democratic Republic of the Congo set the stage
for this deterioration by draining the country for hundreds of millions of dollars. Hyperinflation
has been a major problem from about 2003 to April 2009, when the country suspended its own
currency. The economy deteriorated from one of Africa's strongest economies to the world's
worst.
Microenvironment
According to Kolter & Armstrong year the microenvironment refers to the forces that are close
to the company and affect its ability to serve its customers, the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics. The company aspect of
microenvironment refers to the internal environment of the company. The suppliers of a
company are also an important aspect of the microenvironment because even the slightest delay
in receiving supplies can result in customer dissatisfaction.1 ½ marks
Macro environment
The macro environment refers to all forces that are part of the larger society and affect the
microenvironment. The macro-environment, are factors which affect a number of vital variables
that influence the organizations growth in sales and market share. It is important to identify the
factors that might in turn affect a number of vital variables that are likely to influence the
organizations growth in sales and market share.
Macro environment consists of the PESTEL which are the external factors which affect the
organization in achieving its set objectives.PESTEL is a framework that categorizes
environmental influences such as political, economic, social, technological, environmental and
legal. These factors have a great impact in the sale force because they disrupt the strategic sales
plan of the sales management.1mark
The political factors include all laws, government agencies, and groups that influence or limit
other organizations and individuals within a society. It is important for marketers to be aware of
these restrictions as they can be complex. Some products are regulated by both state and federal
laws. There are even restrictions for some products as to who the target market may be, for
example, cigarettes should not be marketed to younger children. There are also many restrictions
on subliminal messages and monopolies.As laws and regulations change often, this is a very
important aspect for a marketer to monitor.1mark
Since 2000 the Zimbabwean government has taken most of the farmland previously used by
commercial farmers (mostly white) and reallocated it.Due to bad publicity claiming that most of
this land reform happened in a corrupt way and land went to politicians from ZANU-PF, military
leaders or leaders in the police forces who account to less than 1,000 individuals, actually more
than 100,000 blacks were resettled on land which was previously owned by few whites.1mark
The economic factors are the purchasing power of potential customers and the ways in which
people spend their money. Within this area are two different economies, subsistence and
industrialized. Subsistence economies are based more in agriculture and consume their own
industrial output. Industrial economies have markets that are diverse and carry many different
types of goods. Each is important to the marketer because each has a highly different spending
pattern as well as different distribution of wealth. The country has reserves of metallurgicalgrade chromite. Other commercial mineral deposits include coal, asbestos, copper, nickel, gold,
platinum and iron ore.
According to the (http://www.wikipedia.org)the country had farming and tourism as its other
main industries. maintain the intensive, industrialized farming of the previous owners. Short term
gains were often made by selling the farms equipment. The loss of agricultural expertise also
triggered a loss of agricultural financing and market confidence which made recovery almost
impossible. A considerable amount of this land has however gone to local people who use it
mainly for subsistence farming. Therefore production of staple food, such as maize has not
suffered as much as typical export crops, such as tobacco or coffee. The previously large exports
of tobacco, cotton, soya and horticultural produce have consequently reduced dramatically and
the income derived from them lost to the national economy. 1markGovernment spending is
97.8% of GDP. It has partly been financed by printing money, which has led to hyperinflation.
State enterprises are strongly subsidized, taxes and tariffs are high. State regulation is costly to
companies, starting or closing a business is slow and costly. Labor market is highly regulated,
hiring a worker is cumbersome, firing a worker is difficult and unemployment has risen to 94%
(at the end of 2008; the figure was 80% in 2005) 1mark
Economic factors are of concern to marketing firms because they are likely to influence, among
other things, demand, costs, prices and profits. As can be seen, changes in world economic forces
are potentially highly significant to marketing firms, particularly those engaged in international
marketing. However, an understanding of economic changes and forces in the domestic economy
is also of vital importance as such forces have the most immediate impact.
One such factor is a high level of unemployment, which decreases the effective demand for
many luxury consumer goods, adversely affecting the demand for the industrial machinery
required to produce such goods. Other domestic economic variables are the rate of inflation and
the level of domestic interest rates, which affect the potential return from new investments and
can inhibit the adoption and diffusion of new technologies. In addition to these more indirect
factors, competitive firms can also pose a threat to the marketing company so their activities
should be closely monitored e.g. In the year 2008 businesses were not profitable in the
Zimbabwe for it was difficult time, since there was a hyper inflation.
The technological environment is one of the fastest changing factors in the macro environment.
This includes all developments from antibiotics and surgery to nuclear missiles??? and chemical
weapons to automobiles and credit cards. As these markets develop it can create new markets
and new uses for products. It also requires a company to stay ahead of others and update their
own technology as it becomes outdated. They must stay informed of trends so they can be part of
the next big thing, rather than becoming outdated and suffering the consequences financially.
The technology has played the important role, for instance technology has changed and affected
technological change has affected sales force is in the development of electronic point of sale
(EPOS) data capture at the retail level. The ‘laser checkout’ reads a bar code on the product
being purchased and stores information that is used to analyze sales and re-order stock, as well as
giving customers a printed readout of what they have purchased and the price charged.
Manufacturers of fast-moving consumer goods have been forced to respond to these
technological innovations by incorporating bar codes on their product labels or packaging. In a
change in the technological environment has affected the products and services that firms
produce and the way in which firms carry out the sales force carry to their operations they need
to go for training to be able to operate these machines.2marks
The final aspect of the macro environment is the cultural environment, which consists of
institutions and basic values and beliefs of a group of people. The values can also be further
categorized into core beliefs, which passed on from generation to generation and very difficult to
change, and secondary beliefs, which tend to be easier to influence. As a marketer, it is important
to know the difference between the two and to focus your marketing campaign to reflect the
values of a target audience. Changes in attitudes towards working women have led to an increase
in demand for convenience foods, ‘one-stop’ shopping and the widespread adoption of such
time-saving devices as microwave cookers. Marketing firms have had to react to these changes.
In addition, changes in moral attitudes from the individualism of the ‘permissive society’ of the
1960s and early 1970s to the present emphasis on health, economic security and more stable
relationships, are all contributory factors to a dynamically changing socio-cultural environment
that must be considered by companies when planning for the future.1mark
Micro and macro environmental analysis focus at the internal and external environment as a
appropriate strategic tool for understanding the sales force management environment in which
business operates, enabling the company to take advantage of the opportunities and turn the
threats into strengths, faced by the businesses. When strategic planning is done correctly, it
provides a solid plan for an organization to grow into the future. With a macro and micro
analysis, the company can see a longer horizon of time, and be able to clarify strategic
opportunities and threats that the organization faces. By focusing to the outside environment to
see the potential forces of change looming on the horizon, firms can take the strategic planning
process out of the arena of today and into the horizon of tomorrow. The business then will be
able to grow and expand, increases the sales volumes.2marks
References
http://www.wikipedia.org accessed on the 20 -01-2012
Dibb, Simkin and William (1997) Marketing concepts and strategies
Byars, L. (1991) Strategic Management, Formulation and Implementation – Concepts and Cases,
New York: HarperCollins.
Jan, Y. (2002) A three-step matrix method for strategic marketing management, Marketing
Intelligence and Planning, Vol. 20 Issue 5, pp.269-272.
Johnson, G. and Scholes, K. (1993) Exploring Corporate Strategy – Text and Cases, Hemel
Hempstead: Prentice-Hall.
Kotler, J. and Schlesinger, L. (1991) Choosing strategies for change, Harvard Business Review,
pp.24-29.
Capron, N. and Glazer, R. (1987) Marketing and technology: a strategic coalignment, Journal of
Marketing, Vol. 51 Issue 3, pp.10-21.
Cooper, L. (2000) Strategic marketing planning for radically new products, Journal of
Marketing, Vol. 64 Issue 1, pp.1-15.
Kotler, P. (1998) Marketing Management – Analysis, Planning, Implementation, and Control, 9th
Edition, Englewood Cliffs: Prentice-Hall 1mark
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