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Macro And Micro Environmental Factors Marketing Essay

Marketing is the process in which the people who are really involved in the products are found and they focus on these customers; produce the products according to their taste. In this process the potential customers are found and the marketing department focuses on collecting the opinion from these customers. In order to help the strategist to plan for the future of the organization an in depth analysis on the macro factors influencing the growth of the firm are done. This work also focuses on the marketing issues and analyses the perfect marketing mix which will help in taking their product and service to the right people at the most right time.

2. OVERVIEW OF THE COMPANY:

Reliance fresh is one of the major food retailers in India with its branches spread all over India. They are in to main stream food production and distribution where they produce and distribute the foods of all types - from the raw materials to the final food products. It has about 570 outlets all over India and it is now planning to invest more amounts in to this sector in the next 5 years. Its outlets are very diverse in length and the products; they serve the best quantity and the quality to the customers.

With the huge support from the management and the efficient leadership of Mukesh Ambani now they are looking to expand by choosing the right market and the right people.

3. MACRO AND MICRO ENVIRONMENTAL FACTORS THAT AFFECTS THE MARKETING DECISION:

Macro environmental factors are as follows:

1) Demographic

2) Economic

3) Natural

4) Technological

5) Political

6) Cultural

Diagram : PESTEL

Macro environmental products:

3.1. DEMOGRAPHIC:

Any product should be completely focused on the customer, their needs and mostly dependent on where they live. For example people living in higher altitudes may not need air conditioners and trying to sell these AC machines over there will not be a good business. Hence the first step in the process of marketing is to analyze where they are going to sell the products, who their customers are, in how many numbers and analyze their needs. Stocking more amount of fruits and vegetables in a place like Kodaikanal or in any hill station will be a huge disaster because people will prefer to buy more fresh stock available in the out side market.

Hence Reliance industries have to focus on the markets on the middle class of the society who are the majority of their buying population and hence they will have to focus on developing the products mainly focusing them.

3.2. ECONOMIC:

The current down turn in the economy has a major effect on any companies which are in to the retail sector because they have a direct impact and people don’t have very good job offers and pay checks to spend more amount of money. Hence they should focus on producing goods at a very low cost and sell at competitive prices. The organizations like Reliance already involve in selling the goods at a low cost but currently they are facing more problems because they are pressurized by the huge amount of the operations cost and even though they reduce their cost they are unable to sell the goods at the competitor prices.

Hence the only strategic suggestion for them is to produce the goods themselves by purchasing their own farms and bring down the cost of the suppliers and the middle man involved. Thus only by going in for these strategies they can reduce the cost of the production and be able to supply the goods to the customers at the most lowest price in the market.

3.3. NATURAL AND SOCIOLOGICAL:

Whenever marketing their products they will have to sell the products suiting to the taste of the customers in that particular location or region. Some people may like foods very spicy where as some may need foods which are mild. Hence they might need to alter their taste as per the customer needs. (Kazmi, A, 1997)

For example Reliance is also selling packed and ready to cook foods. It has also entered in to Malaysia and Sri Lanka. It can never sell the same products sold in India directly there, similarly it cannot also sell the spicy foods sold at one part or state of India at the other part because the taste and the likings of the people vary. Hence the social needs of the people also should be considered because the goods produced should mainly depend on their taste and their likings.

3.4. TECHNOLOGICAL:

The current technologies used by them are out dated and they don’t have technologies like SAP to analyze about their customers. The recent products produced and sold by them were not up to date and were not matching the needs of their customers. Since the customer needs were not met with they failed in the market.

The strategic recommendation for them is to go in for the latest product like SAP / Oracle Business suite to maintain all the information's up to date about their clients, businesses, suppliers, inventories, etc… With the use of the software like SAP thy can bring down their operations cost because due to the improper management of the information they have lost huge amounts in the operations.

3.5. POLITICAL:

The cost for the business in India is very less as the labor charges, fuel, transportation and the electricity are very less and they are looking for more increase in the trade. As more and more MNC’s are entering in to India the need foe the super markets and hyper markets are raising and they are looking in for more business opportunities. The government is also very favorable towards the new businesses and they encourage new concepts and also offer discounts on the taxes in order to promote the trade. Currently Reliance is also exporting Fruits and vegetables and at the same time it also imports the goods. Indian government has brought down the import duties and is on an extensive campaign to promote the trade and nourishment of the businesses.

The recent rise in the fuel prices has highly influenced their growth – because they have completely altered their strategies; slightly increasing the price of the products.

3.6. CULTURE:

When ever they are entering in to any country they have to concentrate on the cultural needs of the people. They must adopt separate strategies in different parts and always must ensure that they never hurt the feelings in any of their advertisement or any kind of campaign they are in to. Thus they must ensure that all the cultural needs of the people are noted and respected

Strategy for targeting a selected product or the service:

One of the main strategies adopted by Reliance is that they mainly target their product on the specific market – and they continue to market their product with the lowest pricing strategy. They fix the lowest prices compared to their competitors in the market. They also produce products with the higher prices for the different markets and thus they are very clear on the different pricing strategies adopted based on the income of the people, the particular segment for which they are focused.

4. MARKETING MIX

PRODUCT

The marketing mix clearly defines who they are and for whom they are producing the product. Especially in Reliance they have a logo “Cheap and the best” which focuses both on the quality and the price. More over they offer huge variety of foods like;

Fruits and vegetables

Frozen meat, chicken

Ready to eat frozen items

Cool drinks

Ready to eat Chinese food items

Snacks

Groceries

Frozen Sea food items and so on…

Thus even though they are specialized in the fruits and vegetables they also concentrate on other products to throw the image of diversity among the customers. Thus they offer services which are completely diverse and of high quality.

Strategist use this to gain competitor advantage over the market because they always focus on less price and more good quality in a similar manor they use it to advertise to people that they can get diverse amount of products all under one single roof and they need not move to different shops and waste their times for each and every goods. More over since all the food products sold by them are checked and certified the customers need not fear of the side effects or any thing related to the quality. Thus strategist use these to throw a competitor advantage over their competitors who lack this kind of strategy.

PRICE

They are always the market leaders in offering the goods at the cheapest cost in the market and they are capable of doing this even during the times of severe economic down turn because they have started producing their own goods by purchasing their own farms, have formed their own logistics and hence since they are not depending on the 3rd parties the intermediate costs have come down and hence they are able to produce and sell goods at cheaper cost. They also offer the customers goods at cheaper price and also give membership cards to them. The more they buy the more points they gain; and based on this they gain offers. Reliance also collects all the information about their customers and based on these information they send information to the customers about the products and offers to them.

The strategist uses this as an advantage because they are the lowest cost providers in the market and they offer the goods at the cheapest cost. More over they also provide high value for the money the customers are putting to buy the goods. Even they are spending a very small amount or buying a small product they are given ample importance like others and hence they use this as competitive advantage over the others. Since no one can offer the goods at such a low cost like Reliance it acts as a key strategy for them to stay over the top in the market.

Their major factor for success is that they have used this very intelligently in all their ads and logos depicting that they sell the goods at the lowest cost and the best quality; and hence they have reached the heart of the customers.

PLACE

Ample Space is one of the major constraint in India and it is very much congested. They find it very difficult to park the vehicles and shopping always becomes a tough experience. Reliance has rewritten this by making shopping as a pleasant experience and they provide ample space for car parking. Their shops are also fully air conditioned and they are properly ordered. Hence the customers find it very easy to buy their products and they are also supported by the customer support agents to aid in the shopping. More over they have implemented the RFID technology like the western countries and hence the customers need not wait long in the queues to buy their products. Hence the process of shopping has always become a pleasant experience.

This is one of the greatest advantage for Reliance because each and every shop is spread over 3000 – 4000 sq feet and the customers always find it very easy to buy their goods which has not been achieved by any of their customers

Similarly the strategist are planning to bring in a full fledged online shopping for all the places across India because of the extensive spread of the computer literacy among the people in India. Another major advantage for the Reliance is that they have resources i terms of the places and lands all over India; and since they own their own lands they are able to do the business all over India. Another key to their growth is the use of the technologies very effectively and they have their own communication network called as Reliance which operates all over India and because of this their communication cost is totally cut of. In any firm one of the major over head is the cost spent in the communication, rents paid on their retail outlets and transportation. But since these every thing is owned by Reliance never have any problem in the liquidity as all the expenses are managed by themselves. More over they have a very strong financial position because they periodically invest all their resources or the surplus amounts on the lands which make them very special compared to the others.

4.4. PROMOTIONS

The main advantage for them is their name as the name itself brings in reliance among the people. Also they provide very good promotions for their products by using the brochures in their shops and the posters and hoardings in all the main places. Periodic e mails are sent to all their customers about their new products and promotions. They suddenly offer certain promotions and these are highly attractive to their customers as one tells about this to the other and this serves as the internal marketing strategy because one customer informs his other family members and friends about the good discounts he / she had received with the help of the pamphlets and the brochures received from the stores.

They are very famous in India for providing buy 1 get 1 or buy 2 and get the 3rd one free kind of deals. As in India people have a very huge craze towards the discounts and the offers; they are highly addicted to these promotions and Reliance effectively uses this psychology or the buying behavior of the people as a competitor advantage over the others and they use it to sell their products. But one good fact about Reliance is that they never sell the low quality goods by this method rather they always sell the surplus stock or any food product that is nearing its completion date by this method. They never indulge in selling the spoilt product to the people.

4.5. PEOPLE

The people are great asset for Reliance because they always use this as a strategy for success because they always provide job offers to the local crowd in that particular location. Hence since the people in that particular part are provided job they gain in a good will among the people. They are also satisfied that they are serviced by their friend or relative whom they have seen several times. Similarly they also provide them with good salary and facilities; hence the migration rate of their employees is very less and they always stick to their job.

4.6. PROCESS

In order to deliver the people good quality of goods they have to apply modern scientific methods for their pricing strategy. They have to implement modern methods in their production, transportation, supply chain, inventory, CRM, communication, supplier management and only by optimizing their processes they can attain competitor advantage in the market. They are currently having problems in their supply chain and goods are taking more time to reach the destination than expected. The only way to over come this problem is to go in for the process of clearly planning their logistics and they have to expand their logistics or go in for out sourcing some of their activities. It is very fine that they are working in for elimination of the 3rd party dependency but they also have to work on the reduction of the logistics and this is only possible when they are able to purchase more amount of vehicles and expand their current transportation. This will also help in bringing the goods to the hands of the people at the most right time and also help in gaining the good will of the customers.

4.7. PHYSICAL EVIDENCE OF THE CUSTOMER SATISFACTION:

This is only possible by going in for the feed back from the customers. They have to alter their current system and deploy more number of employees in order to collect the opinion from the customers about the products and shop floor interview is one of the best methods. Other than this they can also collect the opinion from the employees based on the review from their web sites and they can also use the social media sites like face book, twitter, Orkut to collect opinion about them. This can be easily achieved by opening the new space for any kind of the product or the service launched by them and based on the reviews given by the public they can collect the opinion and send it to the higher level of the management to alter or modify the existing product. This will help them in producing the products as per the needs of the people matching in their taste and the needs. Hence at low cost Reliance can know about the taste of their customers rather than spending in huge amount on the surveys.

Feed back method always helps them to know about the taste of their customers (Hamel, G & Prahalad, C.K. 1990). Hence they must always go in for the test marketing where in they test a product in the market and then go in for the full fledged implementation of the product. During the test phase they can know the taste of the customers, alter them as per their needs and launch it in the market. This method is currently used by the strategist planners of reliance for launching in their products and this can be improved by going in for altering the methods using which they collect the opinion from the clients.

5. RECOMMENDATION:

They should not only concentrate on the Indian market segment alone and they have to focus on entering other parts of the world also. Hence they have to plan to open out lets all over the world by making intelligent alliances and joint ventures. They should plan for producing diverse products and they have to concentrate on producing goods in different range of the products.

Since India is a developing nation it can’t spend more on technology and people are not open to much of the technology. Hence it can go in for producing more efficient products at a cheaper price and adopt more discount strategies to attract the customers.

6. CONCLUSION:

Hence this article discusses about the current happenings in the Indian retail industry with reliance as the organization under the study. It also examines the current business trends in the Indian market, external influences, and macro and micro factors. Based on these a clear marketing mix a strategy has been laid for Reliance to improve its existing services and work for the competitor advantage over others in the market.

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