The document provides an overview of key macroenvironmental forces that shape opportunities and pose threats for companies. It discusses several components of the macroenvironment including the natural environment, technological environment, political/legal environment, economic environment, demographic environment, and cultural environment. It also covers trends related to the rise of the informal sector in South Africa such as the growth of spazas and stokvels.

1. SOCIO ECONOMIC
TRENDS
MACRO ENVIRONMENT
Forces that shape opportunities and pose
threats to a company

2. Macro Environment
Demographics Economic
Technology Political/Legal
Natural The Cultural
Environment
company

3. Natural Environment
• Natural resources that are needed as inputs by marketers or
that are affected by marketing activities
• water, forests, oil, coal, minerals
• As resources become more scarce, costs increase

4. Natural Environment
 Changes in response to environment:
 biodegradable packs, charges for packets, Wellness Warehouse,
Backsberg wine/carbon-neutral, PET bottle
 Major drivers that affect Marketing
 Consumer driven e.g. lobby groups, blogs, esp overseas
 Formal media, e,g, Carte Blanche, newspapers, Al Gore’s
“Inconvenient Truth”
 Government intervention e.g. pollution laws, legislation for
environmental reviews for new developments
 Note : Corporations CAN be proactive, but tend to be reactive;
change is costly

5. Technological environment
• Forces that create new technologies, create new product
and marketing opportunities
• And change the way we market and communicate with customers

6. Internet changes the way consumers…
• …engage with each other and brands
• Facebook, twitter
• ... communicate
• Led by consumers, not marketers!
• …make purchasing decisions
• Research
• Peer reviews

7. Technological environment: issues
 Rapid pace of change
 High R&D cost/High Risk
 Invest in human resources or fall behind
 Invest in infrastructure or massive repercussions
▪ SA and internet
 Marketing often partnered with R&D to ensure commercial value
(flying pigs, space colonies)
 Not always needs-driven
 Often create the need – iphone, ipad
 Government regulation? (privacy?)
 Well managed, technology can offer huge competitive
advantage – SCM, POS
 Focus increasingly on on-going adaptation rather than
macro change .. Apple iphone/ipad

8. POLITICAL/LEGAL
ENVIRONMENT

9. Political Environment
• Laws, governments, agencies and pressure groups that
influence and limit various organisations and individuals in
a given society.

10. Political environment
• South Africa has stable political environment
• Rule of law is respected and upheld
• Many countries do not have this benefit
• Corruption may drive marketing successes/failures

11. Political- Legal environment
 Public policy to guide commerce - sets of laws and
regulations that limit business for the good of society at
large
 Increasing legislation
 Protect firms
▪ Competition Act
▪ Occupational Health and Safety
 Protect consumers
▪ National Gambling Act Legislation
▪ New Credit Act affects strategy
▪ Tobacco Products Control Act
 Protect the interests of society
▪ Lotteries Act

12. Legal environment
• Not all laws are written
• Social codes and professional ethics
• Socially Responsible Behaviour
• Do the right thing
• Cause related marketing
• Corporate Social Responsibility CSR
• Doing well by doing good

13. Legal Environment
• Advertising Standards
• The Advertising Standards Authority of South Africa (also
known as the ASA) is an independent body to ensure that its
system of self-regulation works in the public interest.
• Protect children from certain forms of advertising
• Protect companies from unfair competition
• Body to maintain fair business

14. Economic environment
• Factors that affect consumer buying power and patterns

15. Economic Environment
 GDP growth (6.0% in 2006; now 3.5%),
 GINI coefficient
 ESKOM!!
 increasing costs for everyone, declining productivity
 Increase in fuel price
 Disposable income, Currency strength, cost of imported
goods vs local manufacture; impact of oil price:
 food, airfares, car usage, car sales, taxi industry, food inflation
variations
 Recession

16. Demographic environment
• Demography
• The study of human populations in terms of size, density, location,
age, gender, race, occupation and other statistics

17. Demographic Environmental Factors
• South Africa COMPLEX! Characterised by
• Young age profile (pyramid) but note the importance of Prime
Timers (over 40’s)
• Prevalence of single-parent households/ extended families
• High mortality rates
• HIV
• Rural Urban
• Income diversity (Gini Coefficient)

18. Changing Demographics
• On the subject of Marriage
• Divorcing or separating
• Choosing not to marry
• Choosing to marrying later
• Marrying without intending to have children
• Having children and not marrying

19. Cultural environment
• Consists of institutions and other forces that affect a
society’s basic values, perceptions and behaviours
• Culture of working, getting married, abiding by the rule of law,
being a good person, caring about others
• Arabic, Indian, China, Europe, Africa
• Marriage (who?when?how?multiple?roles?)
• RSA is a multi cultural country
• often segmentation also coincides with cultural differences
• Language/religion/age/gender
• Culture is hard to define
• Kalk Bay versus Seapoint vs Durbanville vs Blouberg
• Soccer fans vs Rugby fans
• Teenagers versus over 35’s

20. How do we incorporate Macro issues into
marketing strategy?
 We need to know and understand them and appreciate
their immediate and long term impact
 recession and buyer behaviour
 We need to use them to our advantage
 refocusing on needs and character of new Black Middle Class
 We need to find ways of turning changes to our
advantage
 Dubai world Crisis – rise of Second hand sales
 We need to identify trends which are Macro
environmentally driven
 consumer attitudes towards ecology as Woolworths has done.

21. Examples of Macro trends
 Faith Popcorn http://www.faithpopcorn.com/
 99 Lives – wearing different hats/taking on lots of roles
 Anchoring
 Atmosfear
 Being alive
 Cashing out –opting for simpler more meaningful lives
 Clanning
 Cocooning: creating a safe environment at home/preferring home than
going out
 Downaging
 Egonomics – crave recognition as individuals
 Eve-olution –more relational society
 Fanatsy adventure
 Icon toppling
 Pleasure revenge
 Small indulgences – wanting to reward ourselves
 Vigilante consumer
 SOS (Save our Society)

22. RISE OF THE INFORMAL
SECTOR

23. Rise of the informal sector in RSA
 Macro Factors
 Exclusive, discriminatory laws e.g. Group Areas Act, Job
Reservation Act, Education policies
 Political Reaction .. Unrest in 1986; stayaways, boycott of white-
owned businesses, withdrawal of traditional retailers from”black
areas”, disenchantment with white owned businesses (no
opportunities) Lot of red tape to start a formal business
 Limited access to capital and credit
 High unemployment
 Massive urbanisation as influx laws are scrapped
 Limited education opportunities

24. Growth of informal sector
• Consumer needs
• Societal support
• Evolution of unique structure
• Stokvels/burial societies/investment clubs, shebeens, spaza’s

25. What is a spaza?
 It’s an informal retail outlet, usually selling essential,
often perishable groceries
 Stay open for long, appropriate hours, staffed by
owner’s family
 Located in townships
 Usually offer informal credit
 Typically sell top-up, replenishments
 Strong child customer base
 Sell top brands, often in small packs
 Now under pressure .. Having to compete with formal
retailers who are now moving into townships, but still
are relevant, particularly in very poor areas

26. What is a stokvel?
 A group of people – usually 12… Who come together to
save, invest for common purpose
 Requires commitment.. Monthly.. Which is then
redistributed
 Either on a full payout monthly rotation
 Or split at end of year (or biannually)
 Have a strong social context
 Types
 Investment cartels
▪ Often increase savings by 30% by loaning out stokvel funds
 Saving schemes
▪ Burial societies
▪ Christmas, back-to-school savings schemes