Chapter 2 The Marketing Environment © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-1

Chapter 2 Chapter 2 The The

Marketing Marketing EnvironmenEnvironmen

tt

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-1


Our Changing WorldOur Changing World

Changing attitudes toChanging attitudes to– WorkWork– LeisureLeisure– LifestyleLifestyle

New gender and family rolesNew gender and family roles Communication revolution Communication revolution Tougher market conditionsTougher market conditions


External Macro-External Macro-EnvironmentEnvironment

COMPANY’SMARKETINGPROGRAM

Demo-graphics

Economicconditions

Politicaland legal

forces

Social and cultural

forces

Competition

Technology


SSIXIX INTERRELATED INTERRELATED MACROENVIRONMENTAL FORCES CAN MACROENVIRONMENTAL FORCES CAN

AFFECT AN ORGANISATION’S MARKETING AFFECT AN ORGANISATION’S MARKETING PROGRAMPROGRAM::

Demographics Demographics Economics conditions Economics conditions CompetitionCompetition Social and cultural forcesSocial and cultural forces Political and legal forcesPolitical and legal forces TechnologyTechnology


DemographicsDemographics

The statistical study of human population The statistical study of human population and its distribution. Eg age, gender, and its distribution. Eg age, gender, income, religion.income, religion.

Ageing population—Ageing population—Baby boomers Baby boomers (pre-1965)(pre-1965)– Generation ‘X’—(mid 1960s–1970s)Generation ‘X’—(mid 1960s–1970s)– Single peopleSingle people– Two-person household.Two-person household.– Increasing cultural diversityIncreasing cultural diversity


Economics conditions Economics conditions

In order for an In order for an economyeconomy to exist there to exist there must be a ‘market’.must be a ‘market’.

A ‘A ‘marketmarket’ exists where consumers have ’ exists where consumers have money to spend and are willing to spend money to spend and are willing to spend it.it.

The The economic environmenteconomic environment is a is a significant force that significant force that affectsaffects the the marketing marketing of any organisation:of any organisation:– eg unemployment, inflation, interest rates.eg unemployment, inflation, interest rates.– also also influencesinfluences business cycles such as: business cycles such as:

prosperity recession recovery. prosperity recession recovery. These impact These impact on what people buy, when and how.on what people buy, when and how.


CompetitionCompetition

Companies face competition from Companies face competition from three main sources:three main sources:– Brand—from manufacturers of similar Brand—from manufacturers of similar

products.products.– Substitute products—dissimilar Substitute products—dissimilar

products satisfying the same needs.products satisfying the same needs.– Indirect—other firms trying to win Indirect—other firms trying to win

customers purchasing power.customers purchasing power.



Increasing pressures of Increasing pressures of international competitioninternational competition– competitors often enjoy the benefits competitors often enjoy the benefits

of lower wages, better productivity or of lower wages, better productivity or favourable exchange ratesfavourable exchange rates

Activity in world marketsActivity in world markets– firms opt to expand to overseas firms opt to expand to overseas

markets.markets.



A marketing program is influenced A marketing program is influenced by four types of competitive by four types of competitive structures.structures.– Pure competition.Pure competition.– Monopolistic Competition.Monopolistic Competition.– Oligopoly.Oligopoly.– Monopoly.Monopoly.


Pure competitionPure competition

A market structure where a A market structure where a largelarge number of sellers sell annumber of sellers sell an undifferentiated productundifferentiated product..

Pure competition is rarely, if ever, Pure competition is rarely, if ever, attained in the real world. It is a attained in the real world. It is a theoretical concept. An ideal.theoretical concept. An ideal.

eg: some agricultural productseg: some agricultural products(fruits, etc)(fruits, etc)


Monopolistic CompetitionMonopolistic Competition

Marketers attempt to gain Marketers attempt to gain differential advantage over its differential advantage over its competitors.competitors.

Marketer aims to get the buyer to Marketer aims to get the buyer to perceive an attractive difference in perceive an attractive difference in their offerings.their offerings.

Marketers have more control over Marketers have more control over products and price due to products and price due to perceived differences.perceived differences.


OligopolyOligopoly

A market structure in which only A market structure in which only a a few large few large sellers, marketing sellers, marketing essentially essentially similar productssimilar products, , account for almost all of an account for almost all of an industry’s sales.industry’s sales.

eg air travel, beer,eg air travel, beer,cigarettes.cigarettes.


MonopolyMonopoly

A market structure where there is only A market structure where there is only one one suppliersupplier of a product, for which there no of a product, for which there no close substitutes.close substitutes.

eg: CSR (sugar refining), electricity and eg: CSR (sugar refining), electricity and gas suppliers (usually government owned).gas suppliers (usually government owned).

monopolies are becoming rare in Australia monopolies are becoming rare in Australia (eg: even Telstra now has competition).(eg: even Telstra now has competition).

sometimes patent protection can provide sometimes patent protection can provide firms with something close to a monopoly.firms with something close to a monopoly.


Social and cultural forcesSocial and cultural forces

Marketers are faced with changing socio-Marketers are faced with changing socio-cultural patterns, lifestyles, social values cultural patterns, lifestyles, social values and beliefs.and beliefs.

Changes that have significant marketing Changes that have significant marketing implications:implications:– Emphasis on quality of life.Emphasis on quality of life.– Changing gender roles.Changing gender roles.– Attitudes towards health, nutrition and well-Attitudes towards health, nutrition and well-

being.being.– Impulse buying.Impulse buying.– Desire for convenience and a premium on time.Desire for convenience and a premium on time.


Political and legal forcesPolitical and legal forces

The five categories affecting The five categories affecting political–legal influences on political–legal influences on marketing:marketing:– Monetary and fiscal policies.Monetary and fiscal policies.– Social legislation and regulations.Social legislation and regulations.– Government relationships with individual Government relationships with individual

industries.industries.– Legislation specifically related to Legislation specifically related to

marketing.marketing.– The provision of information and the The provision of information and the

purchase of products.purchase of products.


TechnologyTechnology

Technology has had an impact on Technology has had an impact on our lifestyles, work, leisure, our lifestyles, work, leisure, consumption patterns and consumption patterns and economic well-being.economic well-being.

Technology is a mixed blessing: it Technology is a mixed blessing: it may improve our lives in one area may improve our lives in one area while creating environmental and while creating environmental and social problems in another.social problems in another.


Monitoring the Monitoring the environmentenvironment

Marketing intelligenceMarketing intelligence– Monitor business trends and, new Monitor business trends and, new

developments.developments.– Study population growth models (ABS).Study population growth models (ABS).– Review of government publications, Review of government publications,

industry periodicals, news releases.industry periodicals, news releases.– Attending conferences and exhibitions.Attending conferences and exhibitions.


External micro External micro environmentenvironment

Micro forces that are external to Micro forces that are external to the firm of which it has direct the firm of which it has direct involvement.involvement.

– The firm’s market.The firm’s market.– Its producer-suppliers.Its producer-suppliers.– Its marketing Its marketing intermediaries.intermediaries.


External micro External micro environmentenvironment

Copyright © 1997 by The McGraw-Hill Companies, Inc.

COMPANY’SMARKETINGPROGRAM

SuppliersMarketinginter-mediaries

Marketinginter-mediaries

Themarket


Definition—A place where buyers and Definition—A place where buyers and sellers meet, products or services are sellers meet, products or services are offered for sale, and transfer of offered for sale, and transfer of ownership occurs.ownership occurs.– Demand made by a group of potential Demand made by a group of potential

buyers for a product or service.buyers for a product or service. Market demand factors:Market demand factors:

– People or firms with needs and wants.People or firms with needs and wants.– Their purchasing power.Their purchasing power.– Their buying behaviour.Their buying behaviour.


Organisations which provide Organisations which provide the firm with the items it the firm with the items it needs to conduct business.needs to conduct business.

Producer-suppliers are critical to the Producer-suppliers are critical to the success of any marketing success of any marketing organisations.organisations.

Shortages highlight the importance Shortages highlight the importance of co-operative relationships of co-operative relationships with suppliers.with suppliers.


Marketing intermediariesMarketing intermediaries

Defined as independent business Defined as independent business organisations that directly assistorganisations that directly assistthe flow of products and services the flow of products and services between a marketing organisationbetween a marketing organisationand its markets.and its markets.


Marketing intermediariesMarketing intermediaries

ResellersResellers—wholesalers and retailers: —wholesalers and retailers: the middlemen.the middlemen.

Facilitating organisationsFacilitating organisations that that provide transportation, warehousing, provide transportation, warehousing, financing and other supportive services financing and other supportive services needed to complete the exchange needed to complete the exchange between buyer and sellers.between buyer and sellers.

They complete the trade or channels of They complete the trade or channels of distribution.distribution.


Internal environmentInternal environment

The micro-environmental The micro-environmental forces within a firm.forces within a firm.– The relationship between the The relationship between the

different functions in a firm.different functions in a firm.– The environment and resources The environment and resources

within the marketing department.within the marketing department.


Internal andInternal andnon-marketingnon-marketingresourcesresources

COMPANY’SNONMARKETING

RESOURCES

Financialresources

Researchand

development

Com

pany

imag

e

Location

Pro

duct

ion

faci

litie

s

Hum

an

resources


The firm’s entire environment and The firm’s entire environment and marketing programmarketing program

Documents

Chapter 2 The Marketing Environment © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-1