3.1 Why it matters: Analysing the Macroenvironment
Roy Larke
Learning Objectives
- Describe the environment that affects a company’s ability to serve its customers
Understanding the Environment Surrounding a Business
No business exists in isolation. The environment in which a business operates directly affects its capabilities and opportunities, and this environment changes constantly. As marketing aims to meet the needs of a company’s customers, the business environment has a more profound impact on marketing than on most other business functions because customers live within the same environment and are outside of the company’s control – although, through marketing, businesses seek to influence customers’ decisions and behaviour.
By carefully analysing the environment in which a business exists, companies can better plan how they operate and, in particular, can better adjust their marketing to fit that environment. As a result, this analysis becomes a fundamental first step in marketing planning. It involves careful study and analysis of many external factors that may affect the business, as well as a detailed understanding of the company’s own capabilities and how they interact with the environment around it.
What is the Macroenvironment?
According to Investopedia, the microenvironment can be summarised as:
- The macroenvironment refers to the broader condition of an economy as opposed to specific markets.
- The macroenvironment can be affected by GDP, fiscal policy, monetary policy, inflation, employment rates, and consumer sentiment.
- The state of the macro environment affects business decisions on things such as marketing, competitor behaviour and customer behaviour.
This includes the many social, political and cultural forces that affect the environment in which a business works. These include demographic, economic, technological, and natural or ecological factors.