Main Cereal Company is a relatively new company that was established in 2007. It is an Australian owned and operated company. The head office and factory are located in Sydney, New South Wales and it is manufactured and distributed from this location. Main Cereal Company offers organic cereals, which consists of Australian grown whole grains, fruits and nuts.

Main Cereal Company has developed a new breakfast cereal range called Bran Flakes. The range offers ‘Bran Flakes Original’ (only flakes), ‘Bran Flakes Mixed Fruits’ and ‘Bran Flakes and Nut’. The purpose of this paper is to provide an analysis of the six forces that operate and within the macroenvironment, the six influences are: demographic, economic, natural, technological, cultural, and political (Kotler, Brown, Burton, Deans and Armstrong, 2010). All six forces play a significant role in marketing Main Cereal Company’s new range.

Demographic
As explained by Kotler, et al. (2010) demographic environment is “the study of human populations in terms of size, density, location, age, sex, race, occupation and other statistics” (p.137).

Statistics indicate Australia has lower fertility rates and people are living for longer. This has increased Australia’s median age, evidently resulting in Australian have an ageing population (Australian Bureau of Statistics, 2011). In the year 2007 Australian’s population for people over the age of 60 was sitting at 18%, however by the year 2050 they predict over a quarter of Australian’s population will be over the age of 60 (Kotler et al., 2010, pp.140). With this is mind, nearly one fifth of the population at the moment is mainly consisting of people known as the ‘Baby Boomers’ - people born in between the years 1946 to 1964 (Kotler et al., 2010). Considering baby boomers are making up one fifth of the Australians population Main Cereal Company should aim Bran Flakes ranges to cater to the ‘Baby Boomers’ needs.

The state of New South Wales has the highest population within Australia (Australian Bureau of Statistics, 2011). With this in mind and the fact that New South Wales has quite a high median age average, it makes Sydney the ideal area to base the factory. Sydney is also the most centralized city to the second and third largest populated states – Victoria and Queensland. From Sydney, Main Cereal Company can distribute more efficiently and effectively, minimising transportation times. Economic
Economic environment is an important aspect of macroenvironment. When consumers want to act on their needs making it a demand it depends on their buying power. As Kotler et al. (2010) explains “Buying power depends on current income, prices, savings, and credit” without these consumers can’t buy the marketers products (p.149).

When the Global Financial Crisis hit, retail sales and bank profits went down. Australia did fare considerably well compared to other well-developed countries, however Australians were still reluctant to spend money on luxury items, with fears of job losses and income loss. Now post-crisis, the Reserve Bank of Australia (2011) has released figures indicating higher profit percentages for banks and employment and wage growth are on the rise. This, plus an increase in retails sales is a promising sign for Main Cereal Company, as it indicates consumers are not being as frugal as they once were (Gelber, 2011).

Australia has had it fair share of natural disasters in the past few months. Fruits and whole grains have been damaged; causing produce to become limited, which evidentially affects prices, making the Bran Flakes range become higher in price. With this in mind if consumers are to pay a higher price, Main Cereal Company will need to maintain an excellent quality product. As Kotler et al. (2010) states consumers don’t mind spending more money on ‘luxury’ items providing the product is of a high standard.

Natural
The Natural macroenvironment as explained by Kotler et al. (2010) involves marketers using recyclable goods or manufacturing products in a way that is environmentally friendly to water, earth and air; and limiting the need to use natural resources. Kotler et al. (2010) explains four key trends that marketers should be aware of to avoid being brushed off by consumers, they include: “Shortages of raw materials”, “Increased cost of energy” “Increased pollution” and “Government intervention in natural resource management” (p.151, 152).

Sustainability plays a fundamental role to any company wanting to succeed. Due to growing populations and increasing waste being dumped in landfills each year, the public and government have growing concerns for the future of our environment and the diminishing supply of natural resources (Clark-Hill, Hillier, Comfort, Jones, 2008). Astonishing statistic indicate each day two million tonnes of waste is being disposed of into lakes and rivers (Kotler et al., 2010 p. 151). Main Cereal Company is dependent on the natural environment, as it requires raw materials for the whole grains, fruits and nuts that make up the Bran Flakes range. Without raw materials the cereal couldn’t be made.

Main Breakfast Cereal also recognises environmental concerns from a marketing point of view. In a bid to become more environmentally friendly, the packaging for Bran Flakes range is made from recyclable materials. Unfortunately not all of the packaging can be made from recyclable goods, however the inner cardboard of the packaging (corrugated cases) is 100% recycled. Main Breakfast Cereal has also made Bran Flakes more compact without taking away nutrition or taste. Compact packaging means more Bran Flakes cereals boxes can be stored onto the one truck, meaning fewer trucks on the road, and resulting in less carbons emissions being released into the air.

Technological Environment
Technological environment is “Forces that affect new technologies, creating new products and market opportunities” (Kotler et al., 2010. p.152). Technology evolvement provides useful information to marketers. It gives marketers an understanding of how new products can be developed or re-designed if not functioning at their ideal potential.

Technology plays an integral role in the manufacturing of the Bran Flakes range. Technology improvements have helped provide a key understanding of how to obtain the perfect amount of moisture to develop a crunchy flake. Reports indicate consumer dislike the taste of soggy flakes - causing consumer dissatisfaction. If moisture content exceeds 3% this will reduce the crunchiness of the flake; however lower than 1% will cause the flake to break easily (Burrington, 2001). Technological advancements have also provided Main Cereal Company with the ability to cut manufacturing times by utilising computerised machines. These machines not only cook the bran, fruit and nuts at the right temperature, but also package the cereals, which improves and controls quantity and consistency of the product, both in which provide higher customer satisfaction.

The Internet has also played a considerable part in marketing, with now 72% of Australian households being connected (Australian Bureau of Statistics, 2011). The Internet allows consumers to obtain information about different products all in the comfort of their own home. Consumer can gain an understanding of what ingredients Bran Flakes use and how it can satisfy them. Main Cereal Company can utilise the Internet by marketing the range and providing nutritional information, serving suggestions, history of the company and where the whole grains, fruits and nuts are harvested. However the Internet can also hinder Main Cereal Company, as this allows consumers to research competitor products too.

Political
To market a product in Australia a certain amount of it depends on the Political Environment. As explained by Kotler et al. (2010) the political environment consists of “Laws, government agencies and pressure groups that influence and limit various organisations and individuals in a given society” (p.154).

Main Cereal Company must adhere to different regulations as required by law, for example all cereals cartons must be clearly labelled for the consumer to read with the following information: best before date, nutrition information, ingredient listing and allergen statements (Food Standards Australia New Zealand, 2011). Labelling is important as it identifies potential health risks to the consumer.

Another label that must be clearly visible on the carton is the measurement of content, for cereal this is not distinguished by the quantity but the weight of content. (National Measurement Institution, 2010). Measurement of contents not only benefits the consumer by receiving the goods they paid for, but it also benefits Main Cereal Company by not providing excess product.

Packaging is another requirement; Main Cereal Company transports goods all over Australia, so it must adhere to packaging regulations all cereals must have a liner (packaging that protects the cereal and sits inside the carton), all liners must be sealed to protect against dust, dirt and physical or chemical change. Again this eliminates health risks and ensures the consumer a quality product.

Although all the laws above are enforced, it doesn’t pose a threat to Main Cereal Company. If stricter laws were passed, it may prove a challenge in the future, as manufacturing may need to be altered.

Cultural Environment
The Cultural environment consists of “institutions and other forces that affect society’s basic values, perceptions, preferences and behaviours.” (Kotler et al., 2010, p.155).

Each society has sub-cultural groups – people who share similar values based on common attributes such as age, life experience and situations (Kotler et al., 2010). Baby boomers come under sub-culture; they share similar health concerns. Due to baby boomers being an ageing generation they are becoming increasingly aware of health risks, with the main areas of concern being diabetes and obesity (Amies, 2008). According to the World Health Organisation website Australia has one of the highest obesity rates. With this in mind Main Cereal Company markets Bran Flakes range as a healthy alternative with a low glycemic index and high fibre content (World Health Organization, 2006).

Australia is a diverse country with many sub-cultures becoming increasingly common in the market place. For Main Cereal Company to cater to the majority, it should consider developing more cereals in the future that cater to different consumer wants; such as cereals with a variety of different grains and without fruit, or wholes grains with different fruits such as only dried berries or only dried stone fruits.

With more products being shipped from around the world to Australia, sub-cultures are starting to emerge with people who will only buy goods that are made in Australia. Main Cereal Company recognises this sub-culture, and prides itself by being able cater to this group by using Australian grown whole grains, fruits and nuts, and manufacturing Bran Flakes on Australian soil.

Organically produced products are also proving to be in high demand. This steams from consumers not only wanting healthier, better quality products, but also have an understanding of where their product comes from and how it’s treated, i.e. consumer don’t want produce that has added hormones to help it grow (Department of Agriculture, Fisheries and Forestry, 2004).

Conclusion
The Main Cereal Company, like all other cereal companies operating in Australia is subject to the six macroenvironments forces: demographic, economic, natural, technological, political and cultural. Each of these forces can change the way Main Cereal Company operates, either by creating opportunities or by posing potential challenges.

By incorporating the six macroenvironment’s mentioned into the Bran Flakes range, Main Cereal Company can gain a vital understanding of how to cater to the baby boomer market as well as securing a lead in the market. Main Cereal Company should adopt the following marketing strategy for it to succeed in the cereal market: maintain a high standard of quality if prices are going to be higher. Market the Bran Flakes range as a healthy organic alternative. Publicise the fact that the company is proudly Australian owned and operated. Utilise the Internet to promote the cereal range by marketing to a wider audience.

Reference List
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