Jun

FORCES IN THE RETAILERS MACRO ENVIRONMENT

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FORCES IN THE RETAILERS MACRO ENVIRONMENT

Various elements such as demographic, legal, social, economic and technological variables affect an organisation and its marketing efforts. It is now recognized by all that even a well concerned marketing plan may fail if adversely influenced by uncontrollable factors (demographic, legal etc.). Therefore the external macro environment must be continually monitored and its effects incorporated into Retailer’s marketing plans.

The External Environment of Retail Marketing

Demographic Environment

Technological Environment

Social Environment

Political / Legal Environment

Economic Environment

DEMOGRAPHICENVIRONMENT

The first environmental fact of interest to retailers is population because people make up markets. Retailers are keenly interested in the size of the population, its geographical distribution, density, mobility trends, age distribution and social ethnic and religious structure.

Demographic structure is seldom static for long and changes in its composition often test the residency of a marketing firm. Further, these changes influence the behaviour of consumers which, in turn, will have a direct impact in the retailer’s business. The ripples of these changes will reach the organisation forcing it to alter or amend the existing marketing practices in vogue. In short, Retail firms, will have to continuously measure the changes – qualitative as well as quantitative – that are taking place in the population structure. To avoid negative consequences brought on by active consumer groups, a retailer must communicate with consumers, anticipate

problems, respond to complaints and make sure that the firm operates properly.

POLITICAL / LEGAL ENVIRONMENT

Retail marketing decisions are substantially impacted by developments in the political / legal environment. This environment is composed of laws, government agencies and pressure groups that influence and constrain various organisations and individuals in society. Legislation affecting retail business has steadily increased over the years. The legislation has a number of purposes. The first is to protect from each others. So laws are passed to prevent unfair competition. The second purpose of Government regulation is to protect consumers from unfair retail practices. Some firms, if left alone, would adulterate their products, tell lies in their advertising, deceive through their packages and bait through their prices

SOCIAL/ CULTURAL ENVIRONMENT

In recent years, the concept of social responsibility has entered into the marketing literature as an alternative to the marketing concept. The implication of socially responsible marketing is that retail firms should take the lead in eliminating socially harmful products such as cigarettes and other harmful drugs etc. There are innumerable pressure groups such as consumer activists, social workers, mass media, professional groups and others who impose restrictions on marketing process and its impact may be felt by retailers in doing their business. The society that people grow up in shapes their basic beliefs, values and norms.

ECONOMICENVIRONMENT

Retail markets consist of purchasing power as well as people. Total purchasing power is a function of current income, prices, savings and credit availability. Marketers should be cognizant of major trends in the economic environment. The changes in economic conditions can have destructive impacts on business plans of a firm. Economic forecasters looking ahead through the next decade are likely to find their predictions clouded by the recurrent themes of shortages, rising costs and up and down business cycles. These changes in economic conditions provide marketers with new challenges and threats. How effectively these challenges could be converted into opportunities depend on well-thought-out marketing programmes and strategies. Further, no economy is free from the tendency of variation between boom and depression, whether it is a free economy or controlled economy. In any event, economic swings affect marketing activity, because they affect purchasing power.

TECHNOLOGICAL ENVIRONMENT

The most dramatic force shaping people’s lives is technology. Advances in technology are an important factor which affect detail marketers in two ways. First, they are totally unpredictable and secondly, adoption of new technology often is prevented by constraints imposed by internal and external resources. At the same time, it should be remembered that technological progress creates new avenues of opportunity and also poses threat for individual firms. Technology has helped retailers to measure the products with modern weighing machines. Earlier, they have used balances which could not measure the merchandise correctly.With the help of weighing machine, products can be measured with the result customer satisfaction can be enhanced. In the following areas where technology have been extensively used.

1. Packing of the products

2. Printing the name of the shop on the product visibly

3. Modern refrigerators where merchandise can be used for a long time and

4. Billing.

.R.YUVARANI
M.Phil Scholar
Department of Commerce
Periyar University
Salem-11