A Study on How Macro Environment Affect the Business free essay sample

The budget airline that does not have seat allocation upon check-in would encounter a large group of passenger queuing up even before the boarding time. This is due to Singaporean are not used to the cultural of budget airline. Today, travellers are more open to change and the consumers perceive lesser risk when travelling on budget airline. 4. 3Economic Environment 4. 3. 1Lindgren et al (1995, pg 41) stated economic environment greatly affects both a firm’s marketing activities and consumers’ purchasing decisions. During the recession, holiday makers have become more cautious on what they are spending.Many had chose to go for cheaper fare as they become more price conscious and want to get best value out of it. 4. 3. 2Despite the economic crisis, many holiday makers have turned up at the recent three-day National Association of Travel Agents (NATAS) travel fair to check on the best bargain they could get. However, with the high fuel price, Asians who love to travel will choose to make shorter trips to nearer destination. We will write a custom essay sample on A Study on How Macro Environment Affect the Business or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Travelling on budget carriers that is operating within the region is one of the options to choose from. Consumer spending patterns has change as they are looking into other alternative.With half the price paid for full service carriers, many find they can travel to the same destination on budget airline. Free meals, seat selection are not as important anymore. 4. 3. 3Holiday makers planning trips in advance might be able to benefit if they managed to grab the lowest available rate. The company will consistently run promotions to keep travellers excited and continue to travel with them. Travelling during off-peak season help the airline in maintaining their passenger load. During this economy downturn, many small and middle enterprises are also looking into cutting travelling budgets.Business traveller has been requested to travel on budget airline instead of the usual full service carriers to save cost. 4. 4Political Environment 4. 4. 1Bradley (1995, pg 172) stated development of market is greatly influenced by politics and economics. It consists of law and government rules which affect the efficiency of marketing. 4. 4. 2Singapore is a political stable country, however, in the airline industry this is an important factor as the airline needs to obtain entry to another country to expand its network. The contracts known as Bilateral Air Service Agreements (ASAs) are usually negotiated by the government.Once both parties had reached an agreement, they will sign the ASAs and airline would be able start operation. If both parties were unable to reach an agreement, operating between the countries would not be possible. For example, Jetstar Asia’s hope of gaining the entry into the lucrative Indonesia market was diminished due to an existing protectionism policy in place. This prohibited low-cost carriers of Singapore and Indonesia from adding more flights. (Rochfort, 2005) As a result, Jetstar Asia was unable to operate its aircraft into the four cities where its sister airline Valuair operate to.They can only use Singapore owned Valuair aircraft if they wish to continue the operation between Singapore and Indonesia. 4. 5Technological Environment 4. 5. 1According to Bradley (1995, pg 181) technological environment affects marketing in a number of ways, by speeding up business transactions and making them more efficient, and by providing the basis for standards. Technology changes rapidly, if company do not put in money to continuously upgrade its technology, they could find them missing new product and market opportunities. 4. 5. 2Budget airline depend on online reservation to reduce operation cost.If the website is unable to support its users or transactions, it could frustrate the user if they keep encountering page error or duplicate charge on their credit cards. The new Jetstar. com will be able to deliver improved internet access and the ability to handle more customers and transactions. (traveldailyasia. com, 2009) The system replacement, which took over 12 months in planning, is a step-change in system functionality designed to accommodate Jetstar, Jetstar Asia/Valuair and Jetstar Pacific’s expanding network in Australia and Asia.Surfing on the new Jetstar website, travellers would be able to complete their air ticket and hotel reservation and purchase travel insurance on the same webpage. This could save travellers time on surfing different website to find accommodation and comparison of travel insurance. 5. 0Conclusion The above have clearly examined the macroenvironment and its impact that is affecting today budget airline industry in Singapore.The author believes the budget airline will do significantly better than the full service carries for the next 12 months. Taking a step ahead of others as the current crisis is providing opportunities for budget airlines, including attracting more business travellers. Etzel et al. (2004, pg 31) stated a study of about 1000 large companies concluded organisations having advance technologies to monitor the forces of the external environment exhibited higher growth and greater profitability compared to those that does not have the system. The author believes a change in any one of the forces could cause changes to one or more of the others in the macroenvironment as they are interrelated. Organisation must be able to identify the micro and macro forces that are affecting it business and develop competitive marketing strategies. Armstrong et al. (2006, pg. 89) also stated if the organisation are unable to identify the different environment and its impact on the business, they could view the marketing environment as an uncontrollable element.Rather than simply reacting to it, companies should try to be proactive and take advantage of opportunities as they arise rather than reactive to the marketing environment as it has a major impact on both the determination of and eventual success of marketing strategies. Jetstar Asia is expected to breakeven by 2009. International passenger traffic in the Asia-Pacific region are expected to increase an average of 6. 8 percent a year to 2009, Jetstar Asia should be able to benefit as economic growth in the region boosts demand for travel.