The Companys Microenvironment

Marketing management's job is to create attractive offers for target markets. However, marketing managers cannot simply focus on the target market's needs. Their success will also be affected by actors in the company's microenvironment. These actors include other company departments, suppliers, marketing intermediaries, customers, competitors and various publics (see Figure 4.1).

The Company

In designing marketing plans, marketing management should take other company groups, such as top management, finance, research and development (11 & D), purchasing, manufacturing and accounting, into consideration. All these interrelated

The Company's Microenvironment

Microenvironment Unilever
Figure 4.1

Principal actors in the company's microenvironment groups form the internal environment (see Figure 4.2). Top management sets the company's mission, objectives, broad strategies and policies. Marketing managers must make decisions consistent with the plans made by top management, and marketing plans must be approved by top management bel'ore they can be implemented.

Marketing managers must also work closely with other company departments. Finance is concerned with finding and using funds to carry out the marketing plan. The R & D department focuses on the problems of designing safe and attractive products. Purchasing worries about getting supplies and materials, whereas manufacturing is responsible for producing the desired quality and quantity of products. Accounting has to measure revenues and eosts to help marketing know how well it is achieving its objectives. Therefore, all of these departments have an impact on the marketing department's plans and actions. Under the marketing concept, all of these functions must 'think customer' and they should work together to provide superior customer value and satisfaction.

Suppliers

Suppliers are an important link in the company's overall customer 'value delivery system". They provide the resources needed by the company to produce its goods and services. Supplier developments can seriously affect marketing. Marketing managers must watch supply availability - supply shortages or delays, labour strikes and other events can cost sales in the short run and damage customer [Satisfaction in the long run. Marketing managers must also monitor the price trends of their key inputs. Rising supply eosts may force price increases that can harm the company's sales volume.

Marketing Intermediaries

Marketing intcrmcdiaries are firms that help the company to promote, sell and distribute its goods to final buyers. They include resellers, physical distribution firms, marketing services agencies andfinancial intermediaries. Resellers are distribution channel firms that help the company find customers or make sales to then). These include wholesalers and retailers which buy and resell merchandise. Selecting and working with resellers is not easy. No longer do manufacturers have many small, independent resellers from which to choose. They now face large and growing reseller organizations. These organizations frequently have enough power to dictate terms or even shut the manufacturer out of large markets.

suppliers

Firms and individuals that provide the resources needed by ilie company and its competitors to produce goods and services.

marketing intermediaries

Firms that help the company to promote, sell and distribute its goods to final buyers; they include physical distribution firms, marke ting-service agencies and financial intermediaries.

resellers

The individuals and organisations that buy goods and services to resell ar a profit

Marketing Microenvironment

physical distribution firms

Warehouse, transportation and other firms thai help a company to stock and move goods from their points of origin to their destinations.

marketing services agencies

Marketing research firms, advertising agencies, media firms, marketing consulting firms and other service providers that help a company to target and promote its products to the right markets.

financial intermediaries flanks, credit companies, insurance companies and other businesses that help finance transactions or insure against the risks associated eusith the buying and selling of goods.

Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Working with warehouse and transportation firms, a company must determine the best ways to store and ship goods, balancing such factors as cost, delivery, speed and safety.

Marketing services agencies are the marketing research firms, advertising agencies, media firms and marketing consultancies that help the company target and promote its products to the right markets. When the company decides to use one of these agencies, it must choose carefully because the firms vary in creativity, quality, service and price. The company has to review the performance of these firms regularly and consider replacing those that no longer perform well.

Financial intermediaries include banks, credit companies, insurance companies and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods. Most firms and customers depend on financial intermediaries to finance their transactions. The company's marketing performance can be seriously affected by rising credit costs and limited credit. For example, small and medium-sized businesses in the United Kingdom have often found difficulty in obtaining finance for market and product development activities. Many such businesses blame this on the insupportive financial system in the UK. In marked contrast, the Japanese kieretsu system favours lower-cost financing for both large and small companies that form part of the informal network of banking, trading and commercial organizations within the Itieretsu, Whether or not businesses enjoy the support of a favourable financial system, individual businesses must be aware of financial organizations' impact on marketing effectiveness. For this reason, the company has to develop strong relationships with the most important financial institutions.

Like suppliers, marketing intermediaries form an important component of the company's overall value delivery system. In its quest to create satisfying customer relationships, the company must do more than just optimize its own performance. It must partner effectively with suppliers and marketing intermediaries to optimize the performance of the entire system.

Customers

The company must study its customer markets closely. Figure 4.3 shows six types of customer market. Consumer markets consist of individuals and households

The Company's Microen^ tromrtent • 149

Types Customer Markets
Figure 4.3

Types of customer market that buy goods and services for personal consumption. Business markets buy goods and services for further processing or for use in their production process, whereas reseller markets buy goods and services to resell at a profit. Institutional markets are made up of schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care. Government markets are made up of government agencies that buy goods and services in order to produce public services or transfer the goods and services to others who need them. Finally, international markets consist of buyers in other countries, including consumers, producers, resellers and governments. Each market type has special characteristics Chat call for careful study by the seller. At any point in time, the firm may deal with one or more customer markets: for example, Unilever has to communicate detergent brand benefits to consumers as well as maintaining a dialogue with retailers that stock and resell its branded products.

Competitors

The marketing concept states that, to be successful, a company must provide greater customer value and satisfaction than its competitors do. Thus, marketers must do more than simply adapt to the needs of target consumers. They must also gain strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers.

No single competitive marketing strategy is best for all companies. Each firm should consider its own size and industry position compared to those of its competitors. Large firms with dominant positions in an industry can use certain strategies that smaller firms cannot afford. But being large is not enough. There are winning strategies for large firms, but there are also losing ones. And small firms can develop strategies that give them better rates of return than large firms enjoy.

Publics

The company's marketing environment also includes various publics. A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Figure 4.4 shows seven types of public:

public

Any group Chat has an actual or potential interest in or impact on an organization's ability to achieve its objectives.

Sales Promotion Magzine

Comrnunwatmg 'with publics: Unilever magazine communicates nevus and information to employees.

The Kcmira Group uses this ad to communicate to both national and international customers, public and institutionui Ancestors. Its 'super-league'fecl^ great about working for the firm; its customers feet they are in SLife ftandw.

Comrnunwatmg 'with publics: Unilever magazine communicates nevus and information to employees.

The Kcmira Group uses this ad to communicate to both national and international customers, public and institutionui Ancestors. Its 'super-league'fecl^ great about working for the firm; its customers feet they are in SLife ftandw.

1. Financial publics. Financial publics influence the company's ability to obtain funds. Banks, investment houses and stockholders are the principal financial publics.

2. Media publics. Media publics are those that carry news, features and editorial opinion. They include newspapers, magazines and radio and television stations,

3. Government public*. Management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety, truth-in-advertising and other matters.

4. Citizen action publics. A company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups and other pressure groups. Its public relations department can help it stay in touch with consumer and citizen groups.

5. Local publics. Every company has local publics, such as neighbourhood residents and community organizations. Large companies usually appoint a community-relations officer to deal with the community, attend meetings, answer questions and contribute to worthwhile causes.

6. General public. A company needs to be concerned about the general public's attitude towards its products and activities. The public's image of the company affects its buying. Thus, many large corporations invest huge sums of money to promote and build a healthy corporate image.

7. Internal publics. A company's internal publics include its workers, managers, volunteers and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. When employees feel good about their company, this positive attitude spills over to their external publics.

The. Company's Mawowuironment

The Company Microenvironment Publics

A company can prepare marketing plans for these publics as well as for its customer markets. Suppose the company wants ;i specific response from a particular public, such as goodwill, favourable word of mouth, or donations of time or money. The company would have to design an offer to this public that is attractive enough to produce the desired response.

Organizations today are under die watchful eyes of their various publics. As we saw in the case of Unilever's soap war with P & G, the company must explain its actions to a wider audience when things go wrong. Those that overlook the power of serious interest groups often learn painful lessons (see Marketing Highlight 4.1).

We have looked at the firm's immediate or microenvironment. Next we examine the larger macroenvironment.

The Company's Macroenvironment

The company and all the other actors operate in a larger macro environment of forces that shape opportunities and pose threats to the company. Figure 4.5 shows the six most influential forces in the company's macroenvironment. The remaining sections of this chapter examine these forces and show how they affect marketing plans.

Demographic Environment

Demography is the study of human populations in terms of size, density, location, age, gentler, race, occupation and other statistics. The demographic environment is of considerable interest to marketers because it involves people, and people make up markets. Here, we discuss the most important demographic characteristics and trends in the largest world markets.

* Population Size and Growth Trendy

In any geographic market, population size and growth trends can be used to gau£e its broad potential for a wide range of goods and services. We often refer to the United States. Japan and Europe as the 'triad' markets. The European Union (EU), demography The study qfhuman populations in terms of SIKG, density, location, age, sex, race, occupation and other statistics.

Speaking for Herman the Bui]

Nutricia, a Dutch producer of baby foods and powders and a leading investor in biotechnology research, entered into a joint venture with the Dutch subsidiary of US biotechnology firm GenPharm International, to carry out research which attempted to genetically

Kronenbourg Poster 1997

STOPBIOTECHNOLOGIEBIJDIEREN

human milk. The Dutch Society for the Protection of Animals (DSPA) subsequently launched an anti-Herman campaign. A first series of shock posters showed a starry-eyed cow with the question posed: 'Soon to be marketed with blonde hair and blue eyes?' A second depicted a woman's naked chest with two neat rows of udders. Campaigners threatened to call an all-out boycott of Nutricia products.

The power &finterestgroups: the 'anti-Herman' campaign led by the Dutch Society for the Protection of AnimalK forced Nutricia and GenPharm International to abandon the controversial biotechnology research project.

Marketing engineer cows' mill;. A human gene was inserted into the genetic material of a bull called Herman. The two companies hoped that the milk produced by Herman's female descendants would contain large amounts of lactoferrine, a substance normally found in

The Dutch government, which has introduced 'never unless' rules to regulate genetic manipulation of animals, exceptionally permitted the Nutricia project to go ahead as scientists argued that large-scale production of lactoferrine serves unique medical goals. The DSPA, however, stressed that the Nutricia project's motive was purely commercial -to manufacture the equivalent of mother's milk on an agribusiness scale at potential cost to animal welfare. A Nutricia spokesman said, 'When the project was presented to us four years ago, it didn't seem likely to cause controversy. There is great pressure on us to keep investing in technology. But in the current climate, if a similar offer came up, the company would probably prefer to decline it.'

The project had to be abandoned. Nutricia admitted a loss of some OKI 4 million and said it would handle such pioneering efforts more carefully in the future. Pressure groups in Holland declare that they have effectively scared investors from venturing into the most delicate and controversial field of modern biotechnology • - the genetic modification of an animal, which the Nutricia case exemplified. According to a spokesman for N1ABA, a group representing the Dutch food industry for biotechnology matters, food companies in the country would invest between two and three times more in such research if they did not fear damaging upheavals. He added, 'The animal rights and environmental pressure groups may not represent a very large section of opinion, but their blackmailing tactics have been known to work in the past. Any company that ignores their signals takes a very big chance,'

Dutch 'novel foods' laws now dictate that firms which want to market an entirely new

The Company's Macroenvirmunent • 153

product must first present their plans to the authorities and let them undergo a long series of safety tests. On top of national and European rules, some large companies in the Netherlands have adopted their own corporate policy statement to clarify their views on biotechnology development to avoid damaging controversy. In the light of the Nutricia affair, both investors and companies urge an update of ethical rules at European levels.

SoiniOlo; Ailapfed from Barbara Smit, 'Herman the Bull soarus (ill Hutch research pioneers', The European (22-8 July

The Company Microenvironment

together with members of the European Free Trade Area (EFTA), has a population of around 370 million. With another 120 million from eastern Europe and 280 million from the former USSR, the overall European market will be significantly larger than the North America Free Trade Area - the United States, Canada and Mexico - with a population of 370 million and Japan with 128 million. Marketers also view China, with 1.2 billion people, as a potentially lucrative growth market.2 Population growth trends are important because they can offer marketers an indication of demand for curtain goods and services, A 'baby boom' would suggest growing demand for infant foods, nursery appliances, maternity services, baby clothing, toys and so forth, in the short to medium term, with rising demand for family-size accommodation, larger cars, schools and educational services over the longer term. Differences in population growth patterns between country markets may also suggest different international marketing opportunities for firms.

• Changing Age Structure of a Population

The most noticeable demographic shift in Europe, the United States and affluent Asian countries is the changing age structure of the population. In all three groups, the national populations are getting older, and the trend is forecast to continue over the next 50 years. The ageing population structure reflects two influences. First, there is a long-term slowdown in birth rate, so there are fewer young people to pull the population's average age down. Western European countries, with the exception of Ireland, rank below the 2.1 children per woman (fertility) level found in the United Slates, and well below the 3.3 world average. Italy, reporting 1.3 children per woman, has the lowest fertility level in the world.

Singapore Birth Rates Japan Hong Kong

Fertility rates in Japan, Singapore, South Korea and Hong Kong have declined steadily over the last two decades, and all he below America's 2.1 average. This 'birth-dearth' linked to smaller family sizes is due to people's desire to improve personal living standards, women's desire to work outside the home, and widely available and effective birth control practices.

Secondly, as longevity increases there are more elderly people (see Figure 4.6) to pull the average age of the population up. By 2031, 38 per cent of the UK population will be over 50 years old. Compare this with 32 per cent in 1991 and only 28 per cent in 1951. In Germany, the balance of people over 65 years of age to persons of working age (or the dependency ratio) is expected to exceed 1:1 by 2031. Put more colourfully by the historian and demographer Peter Laslett, 'Europe and the West are growing older and will never be young again.' The picture is repeated in developed Asian countries. Tine rapid ageing of the Japanese population is one of the government's biggest long-term worries.3 Further, the demographic change of longer life is not confined to advanced countries. In Latin America and most of Asia, the share of over-60s is set to double between now and 2030, to 14 per cent. In China, it will increase from less than 10 per cent now to around 22 per cent in 2030.

Demographic shifts have important implications for marketing managers. Marketers thus track demographic trends and moves carefully (see Marketing Highlight 4.2).

The, Changing Family

The notion of an ideal family - mum, dad and two kids - has lately been losing some of its lustre. People are marrying later and having fewer children. The specific figures may vary among countries, but the general trend is towards fewer married couples with children. In fact, couples with no children under 18 now make up a high proportion of all families. These are worrying trends too for wealthy Asian countries like Singapore, Japan and Hong Kong.

Also, the number of working mothers is increasing. Marketers of goods ranging from cars, insurance and travel to financial services are increasingly directing their advertising to working women. As a result of the shift in the traditional roles and values of husbands and wives, with male partners assuming more domestic functions such as shopping and child care, more food and household appliance marketers are targeting this group of individuals.

Finally, the number of non-family households is increasing. Many young adults leave home and move into apartments. Other adults choose to remain single. Still others are divorced or widowed people living alone. By the year 2000, one-person/non-family and single-parent households - the fastest growing category of households - will represent a sizeable proportion of all households. In

To serve the large and groioing 'kid market', many retailers are opening separate children s chains. For example, Toys ' 51' US opened J\ids 'JV't/s.

The Ciimpany's Macroenfoironinent • 155

The Ciimpany's Macroenfoironinent • 155

Company Microenvironment

Figure 4.6

ageing population: forecast growth rates to the year 2020

Figure 4.6

ageing population: forecast growth rates to the year 2020

Sweden, for example, one-person households now account for over 40 per cent of all homes. Between 1981 and 1991, there has been an upward trend towards single-person households (see Figure 4.7). In the United States, figures are comparable, with estimates putting the number at 47 per cent by the year 2000. These groups have their own special needs. For example, they need smaller apartments, Inexpensive and smaller appliances, furniture and furnishings, and food that is packaged in smaller sizes.4

• Rising Number of Educated People

As economies in eastern Europe and Asia develop, we may expect to see more money spent on education. The proportion of the population that is educated will rise and the population, as a whole, will become better educated. The rising number of educated people will increase the demand for quality products, books, magazines and travel,

In many developed and industrializing countries, the workforce is also becoming more white collar. The most growth comes in the following occupational categories: computers, engineering, science, medicine, social service, buying, selling, secretarial, construction, refrigeration, health service, personal service and protection.5

• Increasing Diversity

In the 1990s, efforts towards European integration have escalated. The EU now comprises 15 member states - France, Luxembourg, Italy. Germany, with East Germany on unification, Netherlands, Belgium, Denmark, Ireland, United Kingdom, Greece. Spain, Portugal, Sweden, Austria and Finland. The EC's enlargement

"Third Agers' and 'Generation Xers'

Two of today's most important demographic groups are the 'Third Agers' and 'Generation Xers'. For example, the Henley Centre, a UK forecasting organization, draws attention to the emerging Third Agers. They will be 50-75 years old and will have more free time and money and higher expectations than their predecessors. They are brought up to value aspirations and self-fulfilment. They are now in their forties, but will represent the first mass leisure class. Unlike preceding generations, whose upbringing gave them a more frugal outlook, Third Agers were socialized in the 1960s, the era of expanding individual choices and economic growth. One implication is the rise in 'grey power' in western Europe. 'Grey power' has already manifested itself in the USA, where the postwar baby boom occurred a decade earlier than in Europe. The baby boom created a huge bulge in America's age distribution. As the 75 million or so baby boomers age, so the US average age climbs and, along with it, 'grey power'. The 37 million members of the American Association of Retired People represents a powerful lobby - and important new markets for leisure and education. The Henley Centre study argues that such dynamic consumers, who have both the time and monev, should already be the most

Figure 4.7

sought-after target for the leisure industry. Time-use studies show that in the UK, for example, Third Agers already take part more widely in active leisure pursuits -long country walks, short-break holidays, visits to museums or historic buildings - • than younger people. They are also 'catching' their juniors in terras yf playing team sports, swimming and using sports centres, visiting cinemas and attending ovening classes. Participation rates for the 45-59-year-olds have risen sharply since 1986.

Some marketers think that focusing on the boomers has caused companies to overlook other important segments, especially younger consumers. Focus is shifting in recent years to a new group, the generation born between 1965 and 1976 - die 'Generation Xers'. Increasing divorce rates and higher employment for mothers have made them the first generation of latchkey kids. Whereas the boomers of the 1960s created a sexual revoJution, the Xers have lived in the age of AIDS. Having grown up during times of recession and corporate downsizing, they have developed a pessimistic economic outlook. As a result, the Xers are a more sceptical bunch, cynical of frivolous marketing pitches that promise easy success. They know better. The Xers buy lots of products, such as sweaters, boots, cosmetics, electronics, cars, fast food, beer, computers and

Figure 4.7

The rise of the one-person household

The rise of the one-person household

Marketing Highlight 4.2

The Company's Mat--roenvironment 157

mountain bikes. However, their cynicism makes them more savvy Choppers. Their financial pressures make them value conscious and they like lower prices and a more functional look. The Generation Xers respond to honesty in advertising. They like irreverence and impudence and ads that mock the traditional advertising approach.

Generation Xers share new cultural concerns. They care about the environment and respond favourably to companies which have proven records of environmen tally and socially responsible actions. Although they seek success, the Xers are less materialistic. They want better quality of life and are more interested in job satisfaction than in sacrificing personal happiness and growth for promotion. They prize experience, not acquisition.

Surveys on Asian youth culture highlight the emergence of the region's first 'children of plenty', its very own Generation X, teenagers and 20-somethings who have grown up knowing nothing but peace, dazzling economic growth and an ever-rising flood of consumer goods. Compared to their western counterparts, Asian Generation Xers stress the importance of family, jobs, marriage, saving for the future, respect for elders and other such traditional values. Broad generalizations are, of course, fraught with controversy, not least over the definition of what exactly constitutes Values'. And in a region as vast as Asia there are naturally many local variations, even exceptions. 'But one by one as we research the different topics, \ve find one thing in common ... the values they hoid in areas like family,' says Jacfcy Pang of the Hong Kong Federation of Youth Groups. 'They may mimic American trends -music and fashion - but they aren't like American kids,' echoes Ben Tan, of advertising agency Leo Burnelt in Kuala Lumpur. 'We have been as surprised as anyone by the results of our research.' concludes Jacky Pang.

The Generation Xers, as a whole, will have a big impact on the workplace and marketplace in the future. They arc poised to displace die lifestyles, culture and materialistic values of the baby boomers. By the year 2010, they will have overtaken the Third Agers as a primary market for almost every product category.

SOURCES: Jeff Giles, 'Centralisations X',Wero,STCf;ek (6 June

1994), pp. 62-9; Nicholas Zil) and John Robinson, The Ge lie ration X Difference', American Demographics (April

1995), pp. 24-9; Rook solid', Far Eastern Rcannmio Reui«e> (5 December 1996), pp 50-2; Dyan Mitchan, 'A more tolerant generation', Fttrbes (8 September 1997), pp. 46-7; Barbara Beck, 'The luxury of longer life, a survey of the economics of ageing'. The Ecanfirnist (21 January 1996), pp. 3-5; David Nicholson-Lord, 'Mass leisure olass is on th« way. say forecasters', Mtteptrtuienr (IS April 1994), p. 4; see also Leisure futures, vol. 1 (London: Henley Centre, 1994); James U. McNeal, 'Growing up in the market', AmeritMn Demographics {October 1992), pp. 46-50; Diane Crispell and William H. Freys 'American maturity', ^American Demographics (March 1993), pp. .11-42; Melindcr Beck, 'The fieezer boom', in 'The 21st century family', a special issue aiNewavieek (Winter/Spring 1990). pp. 62-7.

programme is still high on politicians' agendas. Eastern and central European countries, including former Soviet bloc states, are seeking to participate in the EU, which, in the longer term, could become a reality.

The EU, in its present state, and in a potentially enlarged form, presents huge challenges for domestic and international marketers. We will discuss international marketing issues in more detail in Chapter 5. In general, marketers operating, in the vastly expanded EU must recognize the great diversity across member Mates. Unification strives to achieve harmonization of rules and regulations, which will affect business practices across the Union. Many marketers believe the single European market will lead to convergence in consumer tastes. Global advertising agencies like Saatchi & Saatchi and Young and Rubicam were strong supporters of the idea of the "Euro con sinner'. However, consumer needs, values, beliefs, habits and lifestyles differ across individual country markets, just as spending power and consumption patterns arc likely to vary. Businesses will do

Economic environment

Factors that affevt connitincr buying potmer and spending patterns.

well to identify national and regional differences, and to develop appropriate marketing strategies that take on board this diversity. Where there are European consumers who display similar cultural values and tastes for particular goods and services, then pan-European strategies may be more cost-effective. For example, the internationalism of snob items, such as Kolex watches or Cartier jewellery, which appeal to a small number of like-minded consumers, or high-fashion purchases like Swatch watches and Benetton clothes, which pander to the younger generation of dedicated fashion followers, lend themselves to pan-European marketing or advertising.

In most markets, however, firms have found that the 'one sight, one sound, one sell' dictum loses out to the more effective strategy of customization. Even Coca-Cola, arch exponent of globalism, tailors the marketing of its drinks to suit different markets. Kronenhourg, France's most popular beer, is soid to a mass market with the eternal images of France, like cafes, boules and Citroen 2CVs. In the United Kingdom, Kronenbourg is presented as a drink for 'yuppies'. Unilever customizes its advertisements for Impulse, a body spray. In the UK, the handsome young fellow who gets a whiff of Impulse from the woman nearby presents her with a bunch of flowers. In the Italian version, Romeo offers the woman a rose.

Whether the Euroconsumer is a myth or reality is widely debated today. Marketers must address a marketing basic: identify consumer needs and respond to them. Converging lifestyles, habits and tastes may often not mean converging needs. Europe remains a pot-pourri of cultures and systems, which present immense marketing opportunities for sellers. Although soeial and demographic factors and the marketing strategics of multinational consumer goods companies may combine to make lifestyles of different European (and rising wealthy Asian) nations more alike, diversity will feature just as much as convergence in the new world economy. Companies that overlook diversity in favour of pan-European or .global strategies must carefully develop and execute their standardized approaches/' We discuss pan-European versus standardized marketing practices in greater depth in the next chapter.

Economic Environment

Markets require buying power as well as people. The economic environment consists of factors that affect consumer purchasing power and spending patterns. Marketers should he aware of the following predominant economic trends.

Income Distribution and Changes in Purchasing Power

Global upheavals in technology and communications over the 1990s brought about a shift in the balance of economic power from the West (mainly North American, Canadian and western European nations) towards the rapidly-expanding economies of the Asian Pacific Rim. Many of the Asian 'tiger' economies, notably South Korea, Thailand, Malaysia, Indonesia and Singapore, were enjoying annual growth rates in excess of 7 per cent, compared to the 2-3 per cent found in western Europe and the USA. Official statistics suggest that, by 2010, purchasing power income per head in countries like Singapore and South Korea will exceed that of the United States. Economic growth projections suggest that Europe will drop down the economic rankings. Assuming annual growth in western Europe and the United States of 2.5 per cent, and 6 per cent in Asia as a whole, the share of world grows domestic product (C.DP) taken by Asian developing countries, including China and India, could rise to 28 per cent in 2010 from 18 per cent in 1990. Western Europe's share will fall to 17 per cent from 22 per

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Responses

  • jamie alvarez
    Why should marketing managers work closely with other company departments?
    8 years ago
  • amanda mugwort
    How is milk interrelated with the micro environment?
    7 years ago
  • Antony
    How does clothes interrelate to Micro Environment?
    6 years ago
  • florian
    What are the micro environment of a multinational company ?
    2 years ago

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