MIDLANDS STATE UNIVERSITY
FACULTY OF COMMERCE
DEPARTMENT OF MARKETING MANAGEMENT
NAME : ONGAI
SURNAME: MANDA
REG NUMBER: R112409W
MODULE: SALES AND MARKETING FORECASTING
ASSIGNMENT QUESTION
With the aid of examples, discuss how micro and macro environmental factors have affected sales force management from 2000 to date in Zimbabwe.
According to Kroon (1995) The Micro Environment are factors or elements in an organisation's immediate area of operations that affect its performance and decision-making freedom. These factors include competitors, customers, distribution channels, suppliers, and the general public.2marks
The term micro-environment denotes those elements over which the marketing firm has control or which it can use in order to gain information that will better help it in its marketing operations. In other words, these are elements that can be manipulated, or used to glean information, in order to provide fuller satisfaction to the company’s customers. This is accomplished through the manipulation of the variables over which a company has control in such a way as to optimise this objective. The variables are termed ‘the marketing mix’ which is a combination of all the ‘ingredients’ in a ‘recipe’ that is designed to prove most attractive to customers.
Micro environmental factors are internal factors close to a business that have a direct impact on its strategy. These factors include: Customers, Organisations survive on the basis of meeting “customer needs and wants” and providing benefits for their customers. Failure to do so will result in a failed business strategy.
Employees, Employing the correct staff and keeping staff motivated is an essential part of an organisation's strategic planning process. Training and development play a critical role in achieving a competitive edge; especially in service sector marketing1mark. This is clearly apparent in the airline industry, where customer services are crucial in obtaining a competitive edge. In the example of Air Zimbabwe, the customer services are greatly declining due to failure of the company to get back on its feet. As Air Zimbabwe prolongs corrective measures its becoming more and more extinct to the public as they prefer other airlines such as South African Airways and Emirates.
Suppliers, Suppliers provide businesses with the materials they need to carry out their business activities. A supplier's behaviour will directly impact the business it supplies. For example if a supplier provides a poor service this could increase timescales or lower product quality. An increase in raw material prices will affect an organisation's marketing mix strategy and may even force price increases. Close supplier relationships are an effective way to remain competitive and secure quality products.
Shareholders, As organisations require inward investment to grow, they may decide to move from private to public ownership and list on the stock market. The introduction of public shareholders brings new pressures as public shareholders want a return from the money they have invested in the company. Shareholder pressure to increase profits will affect organisational strategy. Relationships with shareholders need to be managed carefully as rapid short term increases in profit could detrimentally affect the long term success of the business.
Media, Positive media attention can “make” an organisation (or its products) and negative media attention can “break” an organisation. Organisations need to manage the media so that the media help promote the positive things about the organisation and conversely reduce the impact of a negative event on their reputation. Some organisations will even employ public relations (PR) consultants or “gurus” to help them manage a particular event or incident.
Consumer television programmes with a wide and more direct audience can also have a very powerful impact on the success of an organisation. Some businesses recognise this and will change their reaction when consumers mention that they are going to contact a consumer television programme or the newspapers about the business.
Competitors, The name of the game in marketing is differentiation. Can the organisation offer benefits that are better than those offered by competitors? Does the business have a unique selling point (USP)? Competitor analysis and monitoring is crucial if an organisation is to maintain or improve its position within the market.If a business is unaware of its competitor's activities they will find it very difficult to “beat” them. The market can move very quickly whether that is a change in trading conditions, consumer behaviour or technological developments. As a business it is important to examine competitors' responses to these changes so that you can maximise the impact of your response.
According to Kroon (1995) Macro Environment is the major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces. Specific examples of macro environment influences include competitors, changes in interest rates, changes in cultural tastes, disastrous weather, or government regulations.2marks
Macro environmental factors are factors indirectly affect the organization but cannot be controlled by it. There are many factors in the macro-environment that will affect the sales force management. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. These factors are defined within the PESTEL analysis. This classification distinguishes between Political factors, Economic, Social, Technological, Ecological/ Environmental and Legal factors.
First the political factors, these refer to government policy such as the degree of intervention in the economy. Political factors include issues such as Taxation Policy, Governmental stability, Unemployment Policy and Trade regulations, what goods and services does a government want to provide? To what extent does it believe in subsidising firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business, for example in Zimbabwe, governmental instability in the late 2000s caused a negative impact on vital areas such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
Thus political factors affect sales management force to a greater extent, as they need to make room for adjustment to avoid a large sales deficit that many result in insufficient funds for organisational operations leading to closure. Another major political factor in Zimbabwe, are elections, organisations may choose to be involved with the favourable political party so as to increase on sales management and see their businesses prosper.
Secondly the economic factors, these include interest rates, for example, higher interest rates may deter investment because it costs more to borrow. They also consist of exchange rates, a strong currency may make exporting more difficult because it may raise the price in terms of foreign currency. Thus the sales management force, if in an import and export dependant company should price correctly in order to meet expenses and avoid a loss. Another is inflation; inflation may provoke higher wage demands from employees and raise costs. This affects the sales force in that fewer sales are made as customers are limited in comparison to a boom where people buy on impulse. Economic growth affects sales force in that higher national income growth may boost demand for a firm's products. Other economic factors involved are customer liquidations.
Thirdly the social factors, Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work thus affecting the sales force. In the Zimbabwe, for example, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees, such as The National Railways of Zimbabwe, because their staffs are living longer. It also means some firms have started to recruit older employees to tap into this growing labour pool. The ageing population also has impact on demand: for example, demand for sheltered accommodation and medicines have increased. 2marks
Fourthly the technological factors, new technologies create new products and new processes. MP3 players, computer games, online gambling and high definition TVs are all new markets created by technological advances. Online shopping, bar coding and computer aided design are all improvements to the way we do business as a result of better technology. In terms of the sales force technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing these new and advanced products.
Fifth are environmental factors, environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more environmentally friendly products and processes is affecting demand patterns and creating business opportunities.
Lastly are the legal factors, these are related to the legal environment in which firms operate. In the years from 2000 to date, in Zimbabwe there have been many significant legal changes that have affected firms' behaviour. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisation's actions. Legal changes can affect a firm's costs, for example, if new systems and procedures have to be developed and demand, for example, if the law affects the likelihood of customers buying the good or using the service2marks
Different categories of law include: consumer laws; these are designed to protect customers against unfair practices such as misleading descriptions of the product. Competition laws; these are aimed at protecting small firms against bullying by larger firms and ensuring customers are not exploited by firms with monopoly power. Employment laws; these cover areas such as redundancy, dismissal, working hours and minimum wages. They aim to protect employees against the abuse of power by managers. And the health and safety legislation; these laws are aimed at ensuring the workplace is as safe as is reasonably practical. They cover issues such as training, reporting accidents and the appropriate provision of safety equipment.
Thus a prudent sales force management would avoid being found on the wrong side of the law as this may have negative implications on the company `s reputation and goodwill. The sales volume may decrease as customers lose loyalty in the organisation`s services or products.2marks
Conclusion?
You were generalising factors that affect how an organisation operate instead of applying these factors to how they affected sales force management during the period 2000-2012 in Zimbabwe.
REFERENCES
Kroon, J. (1995), "General Management" (2nd Edition), Pearson South Africa.
Jeffs, C. (2008), "Strategic Management", SAGE Publications Ltd.1mark
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