Download The Marketing Environment

Chapter 2
The
Marketing
Environment
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-1
Our Changing World

Changing attitudes to
– Work
– Leisure
– Lifestyle
New gender and family roles
 Communication revolution
 Tougher market conditions

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-2
External Macro-Environment
Economic
conditions
Demographics
Competition
COMPANY’S
MARKETING
PROGRAM
Social
and cultural
forces
Technology
Political
and legal
forces
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-3
SIX INTERRELATED MACROENVIRONMENTAL
FORCES CAN AFFECT AN ORGANISATION’S
MARKETING PROGRAM:

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Demographics
Economics conditions
Competition
Social and cultural forces
Political and legal forces
Technology
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-4
Demographics


The statistical study of human population and
its distribution. Eg age, gender, income,
religion.
Ageing population—Baby boomers (pre1965)
– Generation ‘X’—(mid 1960s–1970s)
– Single people
– Two-person household.
– Increasing cultural diversity
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-5
Economics conditions


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In order for an economy to exist there must
be a ‘market’.
A ‘market’ exists where consumers have
money to spend and are willing to spend it.
The economic environment is a significant
force that affects the marketing of any
organisation:
– eg unemployment, inflation, interest rates.
– also influences business cycles such as:
prosperity recession recovery. These impact on
what people buy, when and how.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-6
Competition

Companies face competition from three
main sources:
– Brand—from manufacturers of similar
products.
– Substitute products—dissimilar products
satisfying the same needs.
– Indirect—other firms trying to win
customers purchasing power.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-7
Competition

Increasing pressures of international
competition
– competitors often enjoy the benefits of
lower wages, better productivity or
favourable exchange rates

Activity in world markets
– firms opt to expand to overseas markets.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-8
Competition

A marketing program is influenced by
four types of competitive structures.
– Pure competition.
– Monopolistic Competition.
– Oligopoly.
– Monopoly.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-9
Pure competition
A market structure where a large
number of sellers sell an
undifferentiated product.
 Pure competition is rarely, if ever,
attained in the real world. It is a
theoretical concept. An ideal.
 eg: some agricultural products
(fruits, etc)

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-10
Monopolistic Competition
Marketers attempt to gain differential
advantage over its competitors.
 Marketer aims to get the buyer to
perceive an attractive difference in
their offerings.
 Marketers have more control over
products and price due to perceived
differences.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-11
Oligopoly

A market structure in which only a
few large sellers, marketing
essentially similar products,
account for almost all of an industry’s
sales.

eg air travel, beer,
cigarettes.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-12
Monopoly

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A market structure where there is only
one supplier of a product, for which
there no close substitutes.
eg: CSR (sugar refining), electricity and
gas suppliers (usually government owned).
monopolies are becoming rare in Australia
(eg: even Telstra now has competition).
sometimes patent protection can provide
firms with something close to a monopoly.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-13
Social and cultural forces


Marketers are faced with changing sociocultural patterns, lifestyles, social values and
beliefs.
Changes that have significant marketing
implications:
–
–
–
–
–
Emphasis on quality of life.
Changing gender roles.
Attitudes towards health, nutrition and well-being.
Impulse buying.
Desire for convenience and a premium on time.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-14
Political and legal forces

The five categories affecting political–
legal influences on marketing:
– Monetary and fiscal policies.
– Social legislation and regulations.
– Government relationships with individual
industries.
– Legislation specifically related to marketing.
– The provision of information and the
purchase of products.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-15
Technology
Technology has had an impact on our
lifestyles, work, leisure, consumption
patterns and economic well-being.
 Technology is a mixed blessing: it may
improve our lives in one area while
creating environmental and social
problems in another.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-16
Monitoring the environment

Marketing intelligence
– Monitor business trends and, new
developments.
– Study population growth models (ABS).
– Review of government publications,
industry periodicals, news releases.
– Attending conferences and exhibitions.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-17
External micro environment

Micro forces that are external to
the firm of which it has direct
involvement.
–The firm’s market.
–Its producer-suppliers.
–Its marketing intermediaries.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-18
External micro environment
Suppliers
Marketing
intermediaries
COMPANY’S
MARKETING
PROGRAM
Marketing
intermediaries
The
market
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-19
Copyright © 1997 by The McGraw-Hill Companies, Inc.


Definition—A place where buyers and
sellers meet, products or services are
offered for sale, and transfer of ownership
occurs.
– Demand made by a group of potential
buyers for a product or service.
Market demand factors:
– People or firms with needs and wants.
– Their purchasing power.
– Their buying behaviour.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-20

Organisations which provide the
firm with the items it needs to
conduct business.
Producer-suppliers are critical to the
success of any marketing organisations.
 Shortages highlight the importance of
co-operative relationships with
suppliers.

© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-21
Marketing intermediaries

Defined as independent business
organisations that directly assist
the flow of products and services
between a marketing organisation
and its markets.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-22
Marketing intermediaries
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Resellers—wholesalers and retailers: the
middlemen.
Facilitating organisations that provide
transportation, warehousing, financing and
other supportive services needed to complete
the exchange between buyer and sellers.
They complete the trade or channels of
distribution.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-23
Internal environment

The micro-environmental forces
within a firm.
– The relationship between the different
functions in a firm.
– The environment and resources within
the marketing department.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-24
Internal and
non-marketing
resources
Financial
resources
COMPANY’S
NONMARKETING
RESOURCES
Research
and
development
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-25
The firm’s entire environment and
marketing program
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 2-26