Australian Market Vis-A-Vi Macro Environment Factors - Case Study Example

1. Introduction In the fast advancing technology and rapid globalization, the changing dynamics of global business has become highly competitive. The main purpose of businesses is primarily profit making and heavily rely on its products and services which serve the needs of the people. Thus, marketing strategy and markets become the most important ingredients of the business strategy that helps to promote business in the cut throat business environment. Taking cognizance of fast changing preferences of people have become major imperatives of the market strategy along with emerging new paradigms of macro environment which significantly impact business performance. The current case would be analyzed vis-à-vis macro environment factors on their impact on the market strategy of the organizations in the new business dynamics. 2. Brief summary of the case In the changing business scenario in Australia, the emergence of alternative medicine and more holistic healthcare modules have increasing become popular amongst the baby boomer genX. Disillusioned with the traditional medicines and healthcare, the people are moving towards the alternative medicines and health therapies that are diverse and unique in their delivery of holistic care. The alterative health medicines can broadly be defined as a group of diversified medical and healthcare system and practices that uses non conventional methods of medicines. Ernst et al. have defined as ‘diagnosis, treatment and/or prevention which complements mainstream medicine by contributing to a common whole, by satisfying a demand not met by orthodoxy or by diversifying the conceptual frameworks of medicine’ (Ernst, 2004). The vast business opportunities in this emerging segment of industry has also brought in new players from diverse areas of business, including new paradigms in leisure industry that has started catering to the wider well being of the customers, spiritual healers and alternative medicines like Naturopathy, Homeopathy, Kinesiology, Ayurveda etc. that are meeting the needs of people through innovative products and services. 3. Present market scenario The Australian market is undergoing major transformation with respect to its healthcare system and moving towards the unorthodox that is often not officially recognize for its efficacy and safe delivery of its products and services. Despite such major drawbacks, the flourishing of this new industry is seen as a major business opportunity by the regional and global business. The recent demographic changes and the transforming societal norms have to a great extent, made significant impact on the budding industry. The annual ‘Mind, Body, Spirit Festival’ and ‘Vitality Expo’ are indicative of changing pattern of the market compulsions who are adopting innovative ideas to capture and probably retain the customers. The new industry can be broadly categorized into four main segments: health retailers and practitioners; day spa; spa and health retreats; and spiritual providers. Heath retailers and practitioners are facilitating alternative medicines and healthcare modules under various alternative healthcare system. While only few systems like Homeopathy, osteopathy, Chiropractic may be recognized but the popularity of others like Naturopathy, ayurveda, Kinesiology, Crystal healing and others are increasingly being preferred by the target population like GenX that is disillusioned with the modern medicine. Day Spa and Spa and health retreats have brought in eastern concept of mind and body relaxation through mixed techniques comprising of aromatherapy, multiple message therapies etc. They provide unique healing therapy that combines healthcare with beauty and body care. The leisure industry has become one of the major competitor for alternative medicines by providing special interest Tourism or SIT packages that help relax targeted customers. The spiritual healing is primarily based on the eastern concept of soul purification and mental peace through personal growth. They motivate people to adopt lifestyle that includes this new paradigm to heal the soul and become compatible with the nature. The segment combines the religion and the spiritual wellbeing and promotes holistic wellbeing through soul searching and simple living. 4. Analysis of the market vis-a-vi macro environment factors The contemporary business environment is fitting example of changing market imperatives where macro environment elements have significantly influenced the market strategy for global business entities. Marketing comprises micro and macro economic factors. The micro economic factors like price, products etc. are directly under the control of the organizations and can be manipulated to suit the market conditions. The six macro environment factors, on the other hand are elements that are external but have major impact on the industry performance: economic; demographic trend; changing socio-cultural paradigm; developing new environmental compulsions; advancing technology; and political environment of the region. 4.1 Economic It is a very important factor because the market is driven by the demand and supply that is mainly dependent on the buying capacity of the consumers. In the current environment of recession, the market conditions have become more stringent and customers have become more cautious. Thus, in the present scenario of increasing unemployment and higher healthcare delivery, the alternative medicine and holistic wellbeing offers more innovative and cost effective package, which is infinitely more attractive. 4.2 Demographic These are vital ingredients of market and have huge cascading effect on the market imperatives and organizations. . The demographic changes vis-à-vis population size, age distribution, gender ratio, income group etc. have massive influence on the changing consumer preferences and thereby on the economy. Kotler et al(2007) emphasize that in the fast changing global business, demographic compulsions have significant impact on market position and therefore, they need to become intrinsic part of the market strategy of the industry. The GenX are broadly that segment which was born between 1965 and 1976 and has been largely influenced by their parents cautious spending but also enjoying the benefits of advancing technology, luxury and who are now moving towards holistic lifestyle. With the increasing cost of modern medicine and costlier healthcare delivery, the changing preferences provide the recessive economy with more opportunities to exploit market conditions. 4.3 Socio-cultural paradigm In the contemporary environment of globalization, the world is increasingly moving towards multi-cultural society with persons from different culture, race, color and nationality. In the recent years, Australia too has undergone tremendous change. The above graph represents the changing societal equation in Australia (ABS, 2009). The emergence of new industry in the area of alternative medicine, therefore, is not very surprising. The increasing immigration from south east Asian countries like India, China, Singapore etc. have brought in their own culture which has fast become acceptable, as the case study show. It has also brought in the ‘zing’ in the market opportunities for other industries that were hitherto being adversely impacted by the recessive economic trend. The leisure industry and market of ‘wellbeing’ has created a huge galore of opportunities for existing and new industries. 4.4 New Environmental compulsions and nature The fast depletion of natural resources and worsening environment brought about by the advancing technology has become a great concern for the environmentalist and people at large. The deteriorating environmental conditions have resulted in rapid climate change and natural disasters like global warming, tsunami, hurricanes like Katrina etc. The present lifestyle is not conducive to sustainable development and there is urgent need to promote environment conservation and preservation as a means to safeguard our natural resources. The new industry is a great move towards this direction and provides people with huge options of new lifestyle which would help make the world a better place for the future generations. 4.5 Technology The advancing technology has been a boon as well as a bane for current generation. While it has greatly facilitated communication and increased business opportunities across the world, it has also created a wide spectrum of factors that are detrimental to the environment. The by products of technology like Carbon emission, radiation etc have become a big threat to the environment and consequently to the survival of human race. Hence, judicious use of technology and using it to the advancement of environment has become strong motivation for the people. The new ‘wellbeing’ industry greatly facilitates environment conservation and preservation and therefore, has a big chance of success. 4.6 Political environment They are the socio-political environment within which the industries have to operate and broadly comprise of the government regulations, laws and other imperatives which have direct consequences for people. Hence, the industry needs to be aware of the legal framework as well as the laws that directly impact its operation in the country. The Australian laws regarding environmental paradigms are stringent and industries must ensure that they conform to the country specific paradigms. It is true that the alternative medicines are primarily dependent on the regional and cultural beliefs of healing approaches that have been passed on by the generations. The efficacy of the healing is strictly holistic in approach and often treats the disease, not as an isolated event but as part of the wider perspectives that takes into account the physical, mental and social aspect of the individuals. Though, there are laws that may prohibit certain therapy and medicines for the wider welfare and safety of the masses but the growing preference for alternative medicine and wellbeing industry has provided the global business with more scope. Conclusion It can thus be concluded that the emerging new paradigms in the global business are not only innovative in content but they also offer huge business opportunities for all. Indeed the macro environmental factors have become critical in the contemporary times and provide the world with a wide scope of business expansion across the globe. (1555) Reference Australian Bureau of Statistics. Social Trends. Available from: [Accessed 3 October, 2009]. Case Study. Alternative marketplace: marketing wellbeing. Ernst E., Cohen, M H., and Stone, J. (2004). Ethical problems arising in evidence based complementary and alternative medicine. J Med Ethics; 30:156–159. Kotler, Brown, Adam, Burton & Armstrong (2007). The Global Marketing Environment. Prentice hall. Read More