Economic Environment

A nation’s economic situation represents its current and potential capacity to produce goods and
services. The key to understanding market opportunities lies in the evaluation of the stage of a
nation’s economic growth.
When the economy of a country is booming, people’s purchasing power becomes high. Hence,
they are able to purchase more goods and services. Thus, a marketer registers high sales’ volume.
But during economic recession, coupled with inflation and devaluation of a country’s currency,
prices of essential commodities hike. Hence, people are not able to purchase all they require due
to limited purchasing power.

Micro Economic Environment

Microenvironment refers to the environment which is in direct

contact with the business organization and can affect the routine
activities of business straight away. It is associated with a small
area in which the firm functions.

The microenvironment is a collection of all the forces that are

close to the firm. These forces are very particular for the said
business only. They can influence the performance and day to day
operations of the company, but for the short term only. Its elements
include suppliers, competitors, marketing intermediaries,
customers and the firm itself.

Micro Environment

 Suppliers are the ones who provide inputs to the business like raw material, equipment
and so on.
 Competitors are the rivals, which compete with the firm in the market and resources as
well.
 Marketing intermediaries may include wholesalers, distributors, and retailers that make a
link between the firm and the customers.
 Customers / Consumers are the ones who purchase the goods for their own consumption.
They are considered as the king of business.
 The firm itself is an aggregate of a number of elements like owners like shareholders or
investors, employees and the board of directors.
Macro Economic Environment

The general environment within the economy that influences the working, performance, decision
making and strategy of all business groups at the same time is known as Macro Environment. It
is dynamic in nature. Therefore it keeps on changing.

It constitutes those outside forces that are not under the control of the firm but have a powerful
impact on the firm’s functioning. It consists of individuals, groups, organizations, agencies and
others with which the firm deals during the course of its business.

Macro Environment

The study of Macro Environment is known as PESTLE

Analysis. PESTLE stands for the variables that exist in the
environment, i.e. Political, Economic, Socio-cultural,
Technological, Legal and Environmental. These variables,
consider both economic and non-economic factors like social
concerns, government policies, family structure, population
size, inflation, GDP aspects, income distribution, ethnic mix,
political stability, taxes, and duties, etc.

Key Differences Between Micro Environment and Macro Environment

The following are the major difference between micro and macro environment:

1. The microenvironment is the environment which is in immediate contact with the firm.
The environment which is not specific to a particular firm but can influence the working
of all the business groups is known as Macro Environment.
2. The factors of the microenvironment affect the particular business only, but the macro-
environmental factors affect all the business entities.
3. The microenvironmental factors are controllable by the business but to some extent only.
However, the macroeconomic variables are uncontrollable.
4. The elements of the microenvironment affect directly and regularly to the firm which is
just opposite in the case of the macro environment.
5. The study of the microenvironment is described as COSMIC analysis. Conversely,
PESTLE Analysis is a study of the macro environment.

Conclusion

Microenvironment and macro environment, both cover the overall environment of business. So,
they are more complementary rather than contradictory. The study of these environments will
help to know the strength, weakness, opportunity and threat of business.
Demand and Supply Shape of the Market- Some of the biggest economic factors that affect
marketing are demand and supply. Often, the goal of a marketing campaign is to drive up
demand. When demand is high, the price of a product can also be high, increasing profitability
for a business. When demand is low, the price lowers too. When there is a limited supply of
materials, either due to manufacturing or environmental issues, the demand increases due to
the availability.

Consider the latest technology gadgets that are usually released in limited quantities. The
demand is high due to comprehensive marketing campaigns that make it known that only a
limited quantity of products will be available at the launch. This marketing strategy can also be
applied to small businesses. When releasing a new product or service, consider marketing it as
"limited availability" to drive up demand and price.

Examples: Face Masks during pandemic

Phones/Gadgets
Gasoline

Consumer Confidence Affects Purchasing Patterns- Consumers are more likely to make
purchases when they feel confident in the economy of their country and in their own financial
situation. In addition to a logical factor, consumer confidence has an emotional component that
is beneficial to marketers. When consumer confidence is high, marketing campaigns can focus
on the internal elements that affect purchasing decisions and include messaging that uses
highly emotional language.

Businesses benefit as a result of customers who have more spending power during periods of
high consumer confidence. In order to survive a low consumer-confidence period, businesses
need to develop marketing strategies to engage consumers who do not feel they have money to
spend on unnecessary products and services. Careful product positioning and messaging is
critical during this time to convince consumers they can spend their money on these products.

Mataas ang kumpiyansa ng consumer syempre kapag may pambili, lalong lalo nap ag
bonus. Pero pag there is low confidence for the consumers to purchase, ang kailangang
gawin ng marketers ay alamin ang mga needs ng tao kasi syempre mapipilitan parin
silang bumili kasi kailangan nga nila yon.

Employment and Wages Drive Demand- Directly tied to consumer confidence, employment
rates affect how businesses market their products and services. When the majority of
consumers are making a stable income, and continue to expect that stable income, they are
more likely to drive up demand with their purchasing power. This enables businesses,
especially those that sell luxury products, to succeed in selling their goods.

The amount of wages that consumers make relates to how much they can spend. When
wages are rising to meet the increase in expenses, consumers have more discretionary income.
However, if wages don’t rise accordingly, or if they fall unexpectedly, businesses that market
high-end products like jewelry or luxury vehicles may struggle to convince consumers to buy.
When employment and wages are low, businesses may need to create lower price-point
products to entice customers.

Simple lang to, nakabase sa kung ano at magkano ang kinikita mo sa yong purchasing
power. Wag ka makipagsabayan kung lulubog ka lang din nman sa utang.

 Recession Reduce Budgets- A recession is a period of economic contraction, where

businesses see less demand and begin to lose money. To cut costs and stem
losses, companies begin laying off workers, generating higher levels of
unemployment.

An economic recession affects everyone from large corporations to small businesses to

individual consumers. Businesses often cut costs to remain profitable during a
recession, and may lay off staff or curb spending on marketing or research and
development activities. Consumers have less money to spend and face an uncertain
financial future, and they respond by reducing impulse purchases.

Marketing during a recession is challenging as businesses generally have a smaller

budget and fewer resources. Plus, consumer confidence is low and people generally
don’t want to purchase anything they deem unnecessary. Therefore, it’s critical to
position products and services as integral to a consumer’s lifestyle, showing them how
their lives will truly benefit from that purchase.

Example parin dito is during the pandemic wherein, businesses were closed due to
being a non-essential service or product. Malaki ang naging loss ng mga businessman
during that time.

Marketing organization structures are a fundamental part of every business because they clearly
define operations and responsibilities for employees. Choosing a marketing structure that is a
good fit for your business can have a positive impact on your team's ability to meet business
goals. In this article, we explore what a marketing organization structure is, why it is essential for
a business to use a marketing organization structure, what you should consider while creating
one and list seven of the most common marketing organization structures.

Marketing Organization Structure

Marketing organization structures distribute and oversee marketing operations, procedures and
strategies within a business. These structures define and organize employee job roles, including
who they report to, and outline the processes a business can use to achieve success. An effective
marketing organization structure can support business objectives and give employees a clear
understanding of the objectives they are working to achieve.
Why should a business use a marketing organization structure?

Marketing organization structures help employees understand their role within the company they
work for. These structures can also act as a guide for employees to know what resources are
available to them and which team members handle which responsibilities. Marketing
organization structures also can provide a visual workflow that explains how the business
operates, the job tasks within the business and how they contribute to its success and where or
who makes business decisions. Before constructing a marketing organization structure, a
business should consider:

 Chain of command: Chain of command refers to the hierarchy of relationships within a

business. This means defining who answers to who within departments while making
business-related decisions, and it maps out who holds authority and who is accountable
for the overseeing, executing and approving of tasks.
 Span of control**:** Span of control clearly defines who manages each department or
division and what responsibilities those departments or divisions handle.
 Centralization or decentralization**:** A centralized business allows one or two
individuals to make final decisions, whereas a decentralized business has a team or
department in charge of making final decisions.

Types of Marketing Organization Structures

1. Functional structure

Functional structures organize employees into groups based on their job positions and skillsets.
A specialized team or function group is an assortment of employees with similar job aspects.
Team leaders may manage function groups and report to senior executives when necessary.
Specialized functional groups can promote consistent work and speed up work performance
since they don't involve employees outside of their function. This structure is easier to manage
on a larger scale because it can easily adjust to changes in the business as it grows.

2. Product-based structure

A product-based structure is mostly ideal for a business selling multiple products or services.
This structure separates employees into groups or divisions that focus on each individual product
line. Each division can have employees from every specialized function, whereas a functional
structure has employees divided into separate groups that focus on one specialized function. A
product-based structure can give each division independence from one another, which allows
employees to focus on their own division-related tasks since they do not have to communicate
with outside groups or departments.

3. Matrix structure

A matrix structure is a combination of a product-based structure and a functional structure. This

is best for arranging employee departments or teams based on their job roles and the products
they are working with because each department handles one specific product. A marketing
organization structure like this can provide more information at a faster rate since multiple
specialty teams oversee one project. Having a variety of specialty teams responsible for one
project can help employees openly communicate and provide more resources for other
employees to use while working toward their goals.

Related: Matrix Organizational Structure: Advantages and Disadvantages

4. Geographical structure

International companies usually are on a much larger scale since they work in multiple countries
and languages. Using a geographical marketing structure can be helpful for these companies
because it divides employees into teams based on geographical regions or districts. Having teams
dedicated to certain geographical regions can assist employees in designing local marketing
strategies based on their target audience. This structure also could allow employees in each
division to become familiar with their regions, giving them the ability to connect with their
audience on a deeper level.

5. Market-based structure

Some businesses focus on certain industries, markets or types of consumers while creating a
marketing organization structure. Industries, markets and consumer types are division segments
that outline an organizational structure. Focusing on individual segments gives employees the
opportunity to create marketing strategies that appeal to different consumers. These structures
are best for a business that aims to provide services to particular parts of a market or industry.

6. Network structure

A business that intends to work with another, separate business to share resources may use a
network structure, which is helpful for organizations that want to maintain control and expedite
their internal operations. A business that provides one or two specified goods or services might
want to outsource tasks that are not performed internally, since the business is most familiar with
its internal tasks. For example, a restaurant might want to sell custom merchandise, but
outsourcing the job to a graphic designer could allow the restaurant to focus on its core
operations while expanding its network with new partnerships.
7. Linear structure

This type of structure refers to the chain of command hierarchy as its organizational structure.
The top employee in the chain of command oversees the entire business, and the other employees
in the chain of command only oversee one part of the business and refer directly to the employee
above them in the hierarchy. This structure can be best for small businesses with few job
positions.