The macro environment influences almost every business in the world and shapes opportunities as well as threats should the business stay abreast of these forces which include, Demography, Economical, Technological, Societal and Governmental to name a few.
With Demography, being the study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics, Economics, the study of the Factors that affect consumer buying power and patterns, Society which consists of institutions and other forces that affect a society’s basic values, perceptions and behaviours, Government that participates through legislation and Technology which is forces that create new technologies, creates new product and marketing opportunities and changes the way we market and communicate with our customers.
These uncontrollable forces can have a short and long term effect on businesses should a slow marketing manager not be vigilant of them.
For the purposes of this assignment, we will take a look at the largest supplier of fresh fruit and vegetables (among other products) in South Africa, namely, Fruit ; Veg City and The Food Lovers Market Group.
As a Marketing Manager of the above-mentioned business organisations discuss how macro-environmental factors / market variables impact consumer behaviour.
Demographics are probably the biggest factor influencing consumer behaviour. The Fruit ; Veg City Group or FVC, with its 320 stores, a presence in 9 countries with over 200 Fresh Stop convenience stores at Caltex stations, it has taken location as one of the sub-variables of Demography very seriously by placing the various outlets strategically within metros. This makes it very convenient for the consumer to reach a great source of fresh fruit and vegetables to cater for a healthy lifestyle.
FVC caters to the other sub-variables to a greater or lesser degree in terms of age, gender, education as well as the labour market.
FVC has endeavoured to enlarge their aisles in order for ease of trolley pushing, placed their ‘specials’ boards and the entrance of its stores, grouped foods that are generally used together in displays, introduced products from all over the world to cater for ethnicity and large colourful chalkboard signs accompanied by pictures of the products either hanging from the rafters or digital media boards placed high enough to see from just about anywhere in the store.
It is also a well known fact that FVC are big supporters’ of local produce through their ‘Earth Lovers’ initiatives and one can see the ‘Proudly South African’ logo all over its stores. FVC also makes use of local labour in terms of store location.
With all of this in mind, FVC has created convenience, variety, quality, a sense of proudly South African and enjoyment to a shopping experience.
In 2015 The Fruit & Veg City Group received an R670million injection from Actis which was established in 2004 forming part of the UK Government’s development finance institution, established to promote private sector investment in former British territories. This is not to say that FVC had found itself in economic restraints, but quite the opposite. Actis sought to invest in FVC due to having grown historically by 9.5% per annum. It could be suggested that FVC sought this in order to keep themselves relevant and their prices competitive in order for consumers to reap the benefits during ‘tough economic times’. One can always go to FVC and find at the entrance, one of its very well known budget ‘All for R100′ veggie specials. Families have come to rely on this as one member will purchase and share these products amongst themselves.
In October 2015, FVC was taken to the Competition Tribunal for not obtaining approval for a substantial merger between themselves and Everfresh Wholesalers and again as recent as March of this year the Fruit ; Veg City Group came under heavy fire from the Competition Commission for alleged cartel conduct of its agent regarding the undercutting of smaller intermediaries’ prices a certain times during a trading day.
This has had little impact on the consumer’s buying behaviour unless they were specifically looking for this information. In a scenario where this would make headlines, it would be a totally different story as consumers would have viewed this as a break in trust and would have seriously tarnished their brand.
Social values form an integral part of the culture of a society. It provides a general course of action for social conduct. Values are the criteria people use to organise their priorities and choose between alternative courses of action. Fruit ; Veg City Holdings (Pty) Ltd has taken many of society’s values and used them as a basis for their marketing campaign for example, green and cause-related marketing through their ‘Earth Lovers’ initiatives.
Along with an interactive website, FVC has climbed onboard the technology train by teaming up with a leading South African based signage company called Moving Tactics and using digital media platforms. Prices and product promotions need constant change an updating, but with digital media signage, promotions can be managed more efficiently, prices can be updated immediately to preserve integrity with its consumers.
In relation to consumer buying behaviour, FVC has managed to ensure that it’s loyal consumers have access to up-to-date information on specials, promotions and this buys serious brand equity.
With the aid of examples, discuss the impact of social class on the Marketing Manager’s decision-making.
Social class is based on wealth, income, education, type of occupation, membership in specific sub-cultures and social networks and influences the products people buy and how much people are prepared to pay. Each of the three social classes has unique behavioural patterns
As the Marketing Manager for the Fruit & Veg City Group, I would want to cater for all classes as food is a fundamental need.
Upper class (LSM 7 to 10)
FVC offers products to members of this class as prices they can afford due to their income ranging from +- R9 000 to R28 500 per month and are urbanised and well educated. Products include, seafood (prawns, crab meat, crayfish) tinned caviar, stuffed olives, sushi (sushi ingredients) and imported goods such as olive oils, coffees and cheeses to name a few. Marketing elements to use for this class would be digital media, glossy magazines and cinemas.
Middle class (LSM 4 to 6)
This class of consumer enjoys the outdoors and generally aim for healthy lifestyles. They have a monthly disposable income of between R 2 500 and R5 700. The product offering for this group are products such as local meats, fish and dairy, organic fruits and vegetables. The main marketing elements to use for this class should be television adverts, radio and printed media.
Lower class (LSM 1 to 3)
This consumer has a monthly income of between R1 200 and R2 300 and is a heavy user of essential items. Fresh fruit and vegetable specials are always available at all FVC stores. The famous ‘All for R100’ special has enough vegetables that can be shared amongst households. FVC grocery section is stocked with maize meal, eggs, sugar, salt, stock blocks and at competitive prices.
Based on the finding above, one can now truly appreciate the effort and careful diligence of FVC Marketing Department. Navigating today’s population is not an easy task however FVC has managed to create for themselves a sustainable balance of well researched data, methodologies and appropriate marketing communication tools. Since 1993, Fruit ; Veg City has sustained itself and us along with it and in my estimation for many more years to come.