Impact of Macro Environment in Marketing
The marketing environment consists of forces that directly and indirectly influence the organization’s marketing activities. In Nepal, there are various external forces that influence marketing activities. Marketing performs a number of activities like purchasing, selling, branding, grading, standardizing, packaging, advertising, wholesaling, etc. for the satisfaction of consumers. Marketing firms formulate various plans, programs, policies, and strategies for the implementation of their activities. But, the plans and the policies of the marketers get affected by various elements of the environment. A favorable economic system, economic policies, political stability, and fair competition provide opportunities to the marketing firms. But, an unstable political system, unhealthy competition, unfair and frequently changing economic policies, etc. pose challenges to the marketing firms. There are various macro-environmental factors, which have an effect on marketing activities. They are as follows.
1. Political Impact on Marketing Activities in Nepal
The economic liberalization and privatization policy of the government had brought about several changes in the legal provisions favorably contributing to an open economy, liberalized trade regimes, and simplified procedures.
b. Short-term profit venture:
Business firms today focus on the venture that gives quick and large profits. Investment in the manufacturing sector is low. Large manufacturing companies are facing employee problems such as strikes, press, the union of labor, etc. The medium and large industries are mostly sick and small and cottage industries are almost dying. On the other hand speculation on real state, particularly land reached its peak in 2010. The central bank had to intervene to stop the madness created in the land property dealing by the banking sector of the country.
c. Unhealthy business development:
The public banks are overburden by bad debts from big business houses that have become rich personally. These big houses enjoy political and administrative protection through the corrupt mechanism. The focus Of Nepalese traders in more on speculative trade and import activities. The export sector is rapidly declining. The overall effect is visible on the slow development of marketing activities in the country. The rampant corruption among the politician, administrators, and technocrats has increased the marketing costs tremendously.
2. Economic Impact on Marketing Activities in Nepal
a. Urban lifestyle products:
The rapid urbanization and growth in the non-agricultural sectors show positive signs in the marketing activities centered in the urban centers of Nepal. The current Nepalese economy provides opportunities to manufacture and sells a variety of products related to urban life. The products range from housing colonies to prepared foods. The Nepalese urban market has a very high demand for consumer durables and communication devices. The consumption of cars, two-wheelers, television sets, fashion products, and mobile phones has increased very rapidly.
b. Financial institution:
The financial institution has grown very rapidly in Nepal. The number of commercial banks is twenty-nine with almost eighty-six development banks and innumerable finance companies and consumer cooperatives. The major source of deposit of most financial institutions has been foreign remittance. Their operation has increased due to the expansion of financing needs for housing, automobile, and consumer durables.
Although the economy as a whole is not doing well, the tourism sector is growing steadily. This has opened the possibility of introducing new tourist destinations and products. Due to the lack of national flight carriers, the tourism sector has not been developed as expected.
3. Socio-cultural Impact on Marketing Activities in Nepal
The rapid growth in community housing projects is a direct result of the small family concept. There are more than 70 such housing projects under construction in the Kathmandu valley itself. Half of the housing projects focus on building high-rise apartment blocks suitable for nuclear families.
The entertainment industry is rapidly growing in Nepal’s cities and towns. Restaurants, clubs, discos, multi-dimensional cinemas, and many other forms of entertainment offers are increasing in the cities. The opening of multinational food chain outlets Pizza hut and KFC in Kathmandu is an example.
c. Status related offers :
The increasing use of cars, mobile phones, fashion-related products, department store shopping malls, jewelry, and beauty parlors is reflected by the growing desire of Nepalese people to achieve image and status in society.
As part of the westernization process, Nepalese are increasingly attracted to English education and sending their children to so-called boarding schools and high profile colleges in and outside the country. The education sector has seen the biggest explosion in the last decade. More people today take technical and professional education than ever before.
4. Technological Impact on Marketing Activities in Nepal
Nepalese business sector is increasingly using machines in their business processes. The use Of ATMs by banks is a very healthy development in Nepal. Business houses are increasingly using electronic communications via the internet.
b. Modem packaging:
Technology has effectively touched the product packaging system in Nepal. Manufacturers are found to use more plastics, paper, and tetra (metallic paper) packages in places of glass and tin packages.
c. Transport and communication:
Nepal’s transport and communication system have achieved rapid growth in the last two decades. A variety of transportation services has emerged to join the various developed and underdeveloped areas of the country. The use of mobile phones has expanded gradually. Marketing firms can contact their salesperson to know the market and field situation. Often the sales report arrives in the head office on the same day through an email.
Marketing firms have also benefited from new technology in the promotion of their product. Now Nepalese enterprises have changed their thinking about advertising. They are positive towards promotion expenses. Earlier they thought that advertising is an expense, not an investment. Telephone and television marketing is already in use. Nepalese firms also have started e-marketing. The e-commerce sites like muncha.com and themel.com are servicing a large number of customers, particularly those who live abroad and would like to send some presents back home.
Impact of Natural Environment in Nepal
Nepal has been using the landlocked ness idea for a very long time to beg for money and favors from foreign donors. This idea needs to be changed into a new idea of Landlinkedness to develop the country’s economy. Nepal’s geographical location between the two Asian giants India and China is strategically important for the development of marketing activities. Nepal can achieve it significantly if it can effectively assess its competitive advantage and penetrate these markets with a competitive advantage.
b. Natural diversity:
Nepal is blessed with a variety of topography and climate that facilitate the production of a variety of horticultural products that have unlimited market potential in India as well as China. Tourism can be promoted in both countries where large segments of the population have become affluent and travel frequently to exotic places in the world.
Nepal should move strategically to attract investment from the global source in the hydropower sector in order to produce electricity for export. Nepal has huge resources of fresh water in the form of glaciers and glacial rivers that can be tapped and sold as drinking water. Freshwater is going to be the hot product in the years to come as it is as scarce as oil in the present time.