Environment

Assignment of Fin-2103:Principles of Marketing

Assignment on Assignment on

“Elements of Macro-Environment & its impact over marketing of Bangladeshi goods & services.”

Md. Omar Faruque

Course Instructor/ Lecturer,

Department of Finance,

Faculty of Business studies

Jagannath University, Dhaka

.]

Sultan Ahmed Khan

Representative of the group

Epimetheus

BBA 3rd Batch

Department of Finance,

Jagannath University, Dhaka.

Submitted bySubmitted by

Submitted to Submitted to

Group Name: Epimetheus

Group No:

Name of the members of the group :

Serial No: Name of the members of the group Roll Number

01 Sultan Ahmed Khan 091597

02 Md. Mynul Islam 091633

03 Sharjil Ahmed 091623

04 Anik Mahmud 091636

05 Mamunur Rashid 07882747

06 Md. Mofazzal Hossen 091615

07 Nusret Jahan Nupur 091519

08 Mahmuda Akter Tonny 091571

09 Protiva Talukder 091602

Group Representative: Sultan Ahmed Khan.

Group Coordinator : Md. Mynul Islam.

Contact : [email protected]

18th October 2010

The Course Instructor,

Md. Omar Faruque,

Lecturer,

Dept. of Finance,

Jagannath University, Dhaka.

Subject: Thanks to our mentor for giving us a challenging assignment.

Sir,

We are the students of dept. of finance (3rd batch) of Jagannath University, Dhaka. We are very much enthusiastic about our assignment. We are really happy to have such an assignment of challenging and interesting like this. Our presentation topic is `Elements of Macro environment and its Impact over marketing of Bangladeshi Goods and Services’. There were some obstacles we have faced at the time of collecting data about our topic. But we overcome all the obstacles by the endeavor effort by each member of our group which gave us a new experience. We also meet with some special important personalities like businesspersons, scholars, executives of this country who helped us by giving a lot of information regarding our topic.

We the group ‘Epimetheus’ tried our best to make this assignment attractive, impeccable, interesting, informative and enjoyable by the help of electronic and print media in association with our honorable teacher, mentor, counselor, instructor and advocate Md. Omar Faruque. We are really grateful to him. We had limitations at the time preparing presentation. So mistakes may occur in our demonstration of our presentation. We hope that, you will exempt our mistakes.

Thanking in anticipation,

Yours Fidel,

Sultan Ahmed Khan

Group Leader,

‘The Epimetheus’- Group.

Serial No Subjects Page Number

01 Objectives of The Study 01

02 The marketing environment 02

03 Macro environment 03

04 Elements of macro environment 04

05 Impact of demographic environment 06

06 Impact of economic environment 08

07 Impact of natural environment 10

08 Impact of technological environment 12

09 Impact of political environment 14

10 Impact of cultural environment 15

11 Methodology & Source of information 19

12 Acknowledgement 20

13 Appendix 21

Objective of the study

Having objective helps to accomplish the goal of an assignment very respectively. Our assignment is on-“Elements of Macro environment and its Impact over marketing of Bangladeshi Goods and Services”. The main objective is to collect information on how the elements of the macro environment effect in the marketing system in Bangladesh & also promote and maintain soundness, solvency, and systematic stability of the corporate sector. To do that, we have defined some objectives in our assignment. Here are our objectives:

To define marketing environment, macro environment

Classification of marketing environment

Elements of macro environment

Impact of macro environment in BD goods & services.

Impact of macro environment in total marketing system.

The Marketing Environment

The actors and forces outside marketing that affect marketing management ability to build and maintain successful relationship with target customers.

The environment continues to change rapidly and both customers and marketer’s wonder what the future will bring is called marketing environment.

The environment, where found consumers, marketers, marketing researchers, marketing intelligence and some other engaged in marketing process & goods or product is being supplied, is known as marketing environment.

The entire marketing environment can be classified into 2(two):

Chart: Classification of Marketing Environment.

Macro- Environment

The company and all of the other actors operate in a large macro environment of forces that shape opportunities and pose threats to the company is known as macro environment.

Six largely uncountable external forces influence an organization’s marketing activities and shape opportunities is known as macro environment.

Major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic, demographics, legal, political, and social conditions, technological changes, and natural forces is known as macro environment.

A factor that influence a company's or product's development but that is outside of the company's control is known as macro environment.

For example, the macro environment could include competitors, changes in interest rates, changes in cultural tastes, or government regulations

In a whole we can say that the factors that are major part of the company & uncountable factors which influence an organizations’ marketing are known as macro environment.

Elements of Micro-Environment

Demographic Environment

Demography is the study of human populations in terms of size, destiny, location, age, gender race, occupation and other statistics. The demographic environment is of major interest to marketers because it involves people.

Economic Environment

Marketers require buying power as well as people. The economic environment consists of factors that affect consumers’ purchasing power and spending power/ patterns. Marketers must pay close attention to major trends and consumers’ spending patterns.

Natural Environment

The natural environment involves the natural resources that are needed as inputs by marketers or they are affected by marketing activities. Environmental concerns have grown steadily during the past three decades. Marketers should be aware of several trends in the natural environment.

Technological Environment

The technological environment is perhaps the most dramatic forces now shopping own destiny. Technological environment involves forces that create new technologist creating new product and marketing opportunities.

Political Environment

Marketing decisions are strongly affected by developments in the political environment. Political environment consists of laws, government agencies, government itself and pressure groups that influence or limits various organizations and individuals in a given society.

Cultural Environment

The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors. There are few cultural values which affect marketing decision making. These are, persistence of cultural value, shifts in secondary cultural value, people views of organization/ others, etc.

Chart: Influential elements of macro environment.

Impact of Macro-Environment over BD goods & services

Impact of Demographic Environments

Among two sides macro environment is very much effective or important in case of marketing environment which is out of control of company’s manager. Moreover, under macro environment demographic environment is very effective and important. For a businessman the first and foremost considerable topic is population or market size. Without population there is nothing for a market. For this reason before entering into a marketing one must keep in mind about the changes about population. Effect of changes on demographic environment is given below:

Age Structure of the Total Population and Its Changes

The number of different ages of people such as the number of children, teenage, youth, old person should be kept in mind at the time of doing marketing strategy. Because a product cannot be certified for every ages of customer. Moreover, at the time of increasing of population the growth of demand of product rises should be noticed otherwise marketing process won’t be effective at all. On the contrary at the time of the decrease of population the demand falls. This is the reason at the time of doing marketing strategy the matter of population must be analyzed. For example, Grameen Phone is one of the leading telecommunication companies in Bangladesh. They have a product named “Djuice”. The motive of this product is to capture the market of youth. So, the company has been setting up its advertisement, tariff, voice call and sms charges in a way that attracts the attention of youth. As a result most of the youth use Djuice.

Changed Family Life

Now a day’s one can easily identify the changes of family life style such as- the growth of working class women, income capability of women, adult marriage of women and the right of divorce of women etc. also important for doing marketing strategy. For doing more services or jobs outside home the household task of women has gone to the slave. And now we can observe a crisis of slave. Actually the development of garment industry has created this problem. For this reason people are eager to do a less physical labored task. And prepared food, half cooked food, bread, washing machines etc. are used more. So, now we use packet mashla, pressure cooker, rice cooker, washing machine, go to restaurants for food for save

our time but those things created market for the product and the marketers getting benefit from their work and growing rapidly.

Education and Profession

Education rate and job distribution also be remembered at the time of doing marketing strategy. Because the taste, choice, habit, communicating process cannot be same of an educated and a non educated person. The some thought is applicable for the people of different working people. Our education rate is increasing on a regular basis. Now people are eager to do industrial job or service more than farming. These changes are very important for marketing strategy.

Geographical Shift in Population

Geographically living of population and the shift of geographical living of population create impact on marketing. For a lot of reason people tend to go to big cities. For this reason peoples’ life style and their demand style are changing. Moreover, producing product for tourist, job seeking people, businessmen is also profitable business. Besides, people are going abroad and coming back to the country and making a change in their demand style which has to be kept in mind to keep pace with the global growing market. In Bangladesh people want to shift in Dhaka rather than other cities. So, market of this mega city is bigger than others.

Impact of Economic Environment

In market not only people but also their buying ability is needed. Because buying ability less market is for nothing. And buying ability rely on peoples’ earning condition, price of a product, savings and debt facilities. At the time of doing marketing strategy one must remember the shift of earning as well as the spending. And by analyzing these one should make their marketing policy. How economic environment effect marketing decisions are given below:

Changing Income

Though our per capita income grows but customers’ real purchasing power falls for 3 decades. Increase rate of inflation, increase rate of unemployment, taxes, economic uncertainty also responsible for the downward shift of economic condition of customer. For trade and foreign support some peoples’ purchasing power are increasing but limited earned peoples’ condition getting worse day by day. In terms of Bangladesh, the farming product’s price is not increasing keeping pace with the industrial product so the farmers’ condition are getting worse day by day. In future price may increase so people tend to buy product and storage. For this reason multinational companies are applying effective techniques for rural class people. Radio advertisement, mini pack of product, buy at installment etc. are the major example of this initiative. For example, people of Bangladesh are buying color TV rather than black and white TV, they buying refrigerator, air conditioner, and cars like Lexus etc which denotes their level of income increasing and the preferring higher standard of living. Now big companies are in market they offering higher remuneration to the people who are searching for job. These people are joining there and increasing income which results in a market with a high rate of cash flow.

Changing Consumer Spending Patterns

The spending patterns are different basis on earning patterns so their buying patterns also different. Food, housing and transportation use up the most house hold income. As family income rises, the percentage expense on food declines, spent on housing remains constant, and both the percentage spent on most other categories and that devoted to saving categories. At the time of increasing of income the eating habit gets changed. Again the storage of product or the shortage of product may cause the change of demand.

Changes in major economic variables such as income, cost of living, interest rates, and savings and borrowing patterns have a large impact on the market place. Companies watch these variables by using economic forecasting. Business does not have to be wiped out by an economic down turn or caught short in a boom. With adequate warning they can take advantage of changer in economic environment.

We can say that now those demographic and economical environments help to take marketing decisions.

Impact of Natural Environment

For different types of business task and industrial activities our natural environment is getting ruined. As a result of these situations before doing marketing strategy one has to be conscious about the danger of natural environment. From 1960’s people are started think about the world natural loss. Since 2 decade this pressure is getting larger. In 1992 at reo de Jeniro the capital of Brazil arranged the World conference. The air, water and sound pollution gets out of control in a lot of cities. The decreasing rate of ozone level is a global threat to us. So a marketing manager must concentrate on some natural issue. Such as-

Shortage of Raw Material

Assets can be divided as limitless but not increasable and limited but increasable. As example- air and water is unlimited but for some industrial reason these resources gets polluted. For this reason mass consciousness is raised or some countries enforced law. Forest and food is limited but it is possible to increase its’ production. To make run the forest or wood related businesses we should start taking tree plantation measures. On the other hand oil, gas, coal etc. natural resources are also problematic. Though these resources are enough in some cases available but the expense to use these resources are increased a lot. So the alternative resources are looked for or experimenting is going on to lessen the expenses.

Increase Cost of Energy

As an asset oil is very problematic for future development. Because the rich and developed countries are depend greatly on oil. The problem will exist till the alternative source is not introduced. As a result a lot of countries are trying to use solar energy or uranium energy.

Increase of Pollution

Some industrial activities are undoubtedly harming the nature. The filth of factories consisting of poison is polluting both soil and water. As a result taking food seems threatening. As example- the effect of uranium blast of Chernobyl is still active. Now people are unwilling to take some type of food. In Bangladesh the growth rate is too high to describe.

Government in Natural Resources Management

Many government organizations are acting against natural caring. In Bangladesh a government organization named Bangladesh ‘Poribesh Dushon Odhidoptor ‘is working. This organization mainly enforced law to those who used highly harmful machineries to nature and force them to use highly expensive non harmful machineries. Government can impose a group of people to protect the harmful activities of companies & make people aware about importance of natural resources.

So, marketing manager must pay attention to natural situation at the time of using asset. In near future government and naturalist will enforce more pressure. Marketing manager must obey them and come forward to solve natural problem.

Impact of Technological Environment

Technological environment consists of some elements by which new product are being developed. For this reason, marketing has to face new threats, problems & sources of creation.

Faster Pace of Technological Change

Technology is changing day by day. A company must have to fix their step accordance with the technological changes. Otherwise, it is impossible to survive in the market competition. At the present day all types of communication are done by modern technology. To marketing goods in BD one has to stay connect with modern technology. Now think about the communication process of the organizations. In past, they used the classical telephone for communication which sometimes makes disturbance & non-transferable. But at a present day they use mobile which is easier than telephone. One should take the advantages about the modern technology.

Unlimited Opportunities

There lie unlimited opportunities for inventing new technology. Mans are trying to invent following services:

Use of solar power Anti-biotic of cancer Precaution for AIDS Electric cure system

All of these are mostly safe in terms of technology. The main purpose of that is reducing the production cost. In marketing, one of the topics is “Thinking about others”. If all use the unlimited opportunities of technology one must use this to market his/her goods in BD. If all of these prove as a best one should use the technology to minimize the production cost & market the goods in Bangladesh in a short time.

High Research & Development Budget

For better production one company may require a group of people for research the market & requite a group of expertise for proper budget in production which will help to take part in competition with others. Sometimes it seems that the authority of the marketing department spends a huge amount of money for research & development budget whereas they forget about the product. Along with research one should take his/her eye on the product.

Concentration on Minor Improvement

The cost of invention of modern technology, new product, development of services, and market the best good & services has been increased. So, many companies try to improve minor part of the goods rather than big invention. Many companies try to create a duplicate copy of the same product which is made by others. One should take his/her mind on it that one can’t misuse his/her trademarked or duplicate the same product style.

Increased Regulation of Technological Change

All technology will bring happiness for us. This is not right in all cases. Every creation has two sides one is good & other is bad. We all have to keep in mind. For using new technology we have to follow the rules & regulations regarding this matter. For better control we can impose new law. In a short, marketers have to follow the rules & regulations when producing/ marketing a new goods & services.

Impact of Political Environment

One of the important parts of the micro environment is political environment. In general, law of the state, govt. agencies & other controlling groups put a great impact in the whole marketing system.

Impact of this environment in marketing goods is classified into three major groups. These are:

Legislation Regulating Business

Now a day’s controlling act has been increased. There are three reasons. That’s are

To protect the company Save consumer against unfair performance of producers Save the society against dishonest business man

Bangladeshi marketing system are influenced by the following act Patent act-1911 Design act-1911 Trade mark act-1940 Bangladesh agriculture food’s market control act-1964 Bangladesh pure food product section-1959, etc

All of these have a great impact in marketing a new goods/ services. Marketers have to open eye relating to law when launch a new product or even services.

Changing Government Agency Enforcement

In every country including Bangladesh have some agencies which are created for observing wheatear the act is being followed or not. Sometimes they are become so much active & sometime it becomes freeze. All of the employees of those agencies are expert of this matter. Their decision left a great impact in marketing goods & services. In Bangladesh the enforcement of this related group is higher than others countries of the world.

Increases in Public Interest Group

In the marketing system public interest group is now one of the major one. They increase the consumer power & rise voice against unfair activities. In Bangladesh there has some agencies but the major one is Consumer Association of Bangladesh (CAB). In general they work for consumers well being. These groups also have an impact in marketing goods. All of these types of group are formed only for save the consumers from the unfair business man. They publicity the consumer laws in a worldwide for increasing awareness among the customers.

Impact of Cultural Environment

Cultural environment is the combination of different organization and forces which affects a society’s basic value, perception, preference and behavior. People grow up in a particular society that shapes their beliefs and values. They absorb a worldview that defines their relationships with others. Bangladesh is a country which is very much rich with its culture and culture related options. These cultures make different this country from others. Its different cultural view and different factors seriously affect its overall marketing and business. Cultural environment has some important influences which affect the overall marketing of the business and commerce of that particular environment. Those elements are discussed below:

Persistence of Cultural Values

People in a given society hold many beliefs and views. Their core belief and values have a high degree of persistence. For example, Bangladeshi people are peace loving, getting married for once, strongly hold their religion and being honest. These beliefs shape more specific attitudes and behaviors found in everyday life. Core beliefs and values are passed on from parents to children and are reinforced by schools, colleges, universities, and business and so on.

Secondary beliefs and values are more open to change. Believing in marriage is a core belief; believing that people should get married early in life is a secondary belief. Marketers have some chance to change their secondary belief but little chance to change their core belief. For example, people need food is a core thing but which food or where they should eat is a secondary belief and marketers can influence them. For instance Bengali customer of a burger of must prefer beef burger rather than ham burger because of their cultural belief.

Sub-cultures

Every culture has some sub-cultures. People of sub-culture’s belief, ethics, attitude etc are like to be core culture but they have secondary beliefs. Like rich people. They have different thinking from the other people and they have different life style. They like to present them as different from others.

People’s view of others

In past decades, observation has noticed several shifts in people’s attitudes towards others. People now demand TV set, DVD set etc with high and latest technology because other people have them and they like to follow others. Now we have internet connection, cable connection which made our life fast and for them we need not to go outside for enjoying an open air concert because we can watch them through CD or cable or internet.

Shifts in secondary cultural values

Although core values are fairly persistent, cultural swing do take place. Consider the impact of music group, actors, models, and other celebrities on general people’s hair style and clothing norms. Marketers want to predict cultural shifts in order to spot new opportunities. For example, people need to communicate with each other. Fixed telephone system was the key for communication in ten to twelve years ago. But that time launched mobile phone which is wireless and now mobile phone is a key factor for communication and marketers made it possible and mobile phone market is a big market in Bangladesh now. So, marketers shifted the cultural value.

The major cultural values of a society are expressed in people’s views of themselves and others, as well as in their views of organizations, society, nature and the universe.

People’s view of themselves

People vary in their emphasis on serving themselves versus serving others. Some people want personal pleasure, wanting fun, change and escape. Others seek self-realization through religion, recreation, or other personal goals. People use product service and brand as a mean of self-expression and they buy product which match their views of themselves. Two examples

People with high income may want to wear clothes of Yellow, Rich Man, Cats eye etc they also want to buy foot wears of Hush Pappies, food of Heerajheel, fast food of KFC etc. But a man with lower income can not afford them they want things with low price.

Adventuresome individuals rarely follow a single path or the same thing twice. Although they may be appreciative of the art like photography but they are more likely to engage in dangerous activity. They like to view themselves doing things other would not dare to do. A very practical example of it is a person- Musa Ibrahim, a true hero of Bangladesh, who recently climbed up the Mount Everest.

Marketers produce and serve or sell their product to the customers based on self-views.

People’s view of organization

People vary in their attitudes toward corporations, government agencies, trade unions, universities and other organizations. By and large, people are willing to work for major organizations and expect them. Basically people need their satisfaction from a company. Say for example, in banking industry, those banks has greater customer demand who gives more satisfaction and desired level service. People want to admit in a university with name and fame from the view point of education such as University of Dhaka. People basically use Grameen Phone network for its good network and coverage on the other hand people need cheap rates can rely on Warid network.

People also want to get a job in a big company with name and fame, well capital structure, growth, general acceptance and with a good remuneration. Many people today see work not as a source of satisfaction but a required chore of earn money to enjoy their nonworking hours.

Afore said suggest that companies need to find new way to win consumer and employee confidence.

People’s view of society

People vary in their attitude toward their society; patriots defend it, reformers want to change, malcontents want to leave it. People’s orientation to their society influence their consumption pattern and attitude toward the market place. We see our freedom fighters who are truly patriot. In the year 1971 we have got our freedom. We have got it through passion, sacrificing the life of 3 million people. This war basically started after 1947 and we finally got it through the hard job of freedom fighters that are called patriotic.

Marketers respond with patriotic products and promotion, offering everything from flower bouquet to cloths with patriotic theme. Although, most of these marketing efforts are tasteful and well received. Waving green and red can prove tricky. Markets must take care when responding to such strong natural emotions.

People’s view of nature

People’s attitude varies in case of nature. Some feel ruled by it, some are harmony with it and some want to master it. Few decades ago people’s thinking was mastering over nature. But, recent time they recognized that nature is finite and fragile and it can be destroyed by human being. So, people are trying to save the nature. They are riding hybrid cars, avoiding polythen, reducing the use of chemical fertilizer, establishing waste management, introducing environment law etc. So marketers now trying to produce and serve environment friendly product. Because, the awareness of customer toward the nature. People now know if we can save nature we can save ourselves.

People’s view of universe

People vary in their beliefs about the origin of the universe and their place in it. People follow the thing which is well known globally. People want a higher position, broad communication through internet and so other technology. So, marketers should observe the market to know the material which influences them.

So, cultural environment is very much important for a marketer, who works in countries like Bangladesh, to observe and work with it. Peoples’ demand depends on it. Marketing of drinks like vodka is not possible in Bangladesh as Russia because of this country’s people’s cultural point of view. So, to generate profit and capture the market marketers should observe the cultural influences and the basic factors of a culture.

Methodology

We have collected our data & information from internet sources like Wikipedia, Books of Business, Business dictionary collection for students and other related sources. We also collected our information from our text books named “Principles of Marketing” By Philip Kotler, Gary Armstrong & other renowned writers’ books.

Sources of information

Basically we have collected our information from different kinds of educational websites. Among those we used Wikipedia as a major website for this assignment. Our assignment is constructed based on secondary information. So information given here may be inaccurate.

Our especial thanks go to:

MD. Omar Faruque,

Course Instructor/Lecturer,

Department of Finance,

Faculty of Business Studies,

Jagannath University, Dhaka.

The information/ data collected from the magazines related to communication process and also from the internet. We especially browsed www.businesswikipedia.com. Beside this, we also browsed www.google.com/macro+environment; www.google.com/ME; wekipedia.com to collect more information about this topic.