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PowerPoint to accompany
Philip Kotler,
Stewart Adam,
Linden Brown
& Gary
Armstrong
Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
Chapter 3
The global marketing
environment
Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
Chapter objectives
1.
List and discuss the importance of the elements of the
marketing organisation’s micro-environment, including
the marketing organisation, marketing intermediaries,
customers, competitors and publics
2.
Explain the broad concept of the organisation’s macroenvironment
3.
Outline the key changes occurring in the organisation’s
macro-environment including shifts in the demographic,
economic, technological, political, cultural and natural
environments.
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Micro vs Macro
Environments
 Micro-environment
 The forces close to the organisation that affect its
ability to serve its customers:
 the organisation,
 market channel firms,
 customer markets,
 competitors and publics
 Macro-environment
 The larger societal forces that affect the
whole microenvironment:
 demographic,
 economic, natural,
 technological, political
 forces
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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The Marketing Organisation's
Micro-Environment
Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Figure 3.1: Actors in
Microenvironment
Company
Marketing
Intermediaries
Suppliers
Customers
Competitors
Publics
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The Marketing Organisation’s
Micro-Environment
Marketing management has the task of attracting and
building relationships with customers by creating
customer value and satisfaction. However,
marketing management does not accomplish this
task alone. Its success will depend on other
actors in the organisation’s micro-environment
1. The Marketing Organisation
2. Suppliers
3. Marketing Intermediaries
4. Customers
5. Competitors
6. Publics
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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The Marketing Organisation
Senior management sets the organisation’s mission,
objectives, broad strategies and policies.
Marketing managers must make decisions within the plans
made by senior management.
Senior management must approve marketing plans before
they can be implemented.
In designing marketing plans, marketing management takes
other organisation groups into account such as:
 top management,
 finance,
 research and development (R&D),
 purchasing,
 manufacturing and
 accounting.
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Figure 3.2: The Internal
Environment
Finance
Marketing
R&D
Senior
Management
Accounting
Purchasing
Manufacturing
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Marketing Orientation
 Organisations that adopt a marketing
orientation must ‘think customer’, and work
together to exceed customers’
expectations.
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Suppliers
 Suppliers are an important link in the
organisation’s overall customer ‘value delivery
system’.





Marketing managers must watch for:
supply availability.
supply shortages or delays,
labour strikes
price trends of supplies
 All of the above events can damage customer
satisfaction in the long run.
 Rising supply costs may force price increases
that can harm the organisation’s sales volume.
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Marketing Intermediaries (1)
Marketing intermediaries help an organisation to
promote, sell and distribute its goods to final
buyers. They include:
 Resellers
help the organisation find customers or make
sales to them
 Physical Distribution Firms
help the organisation stock and move
goods from their points of origin
to their destinations.
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Marketing Intermediaries (2)
 Marketing Services Agencies
are the facilitating agencies—marketing research
companies, advertising agencies, media firms,export
consulting agencies and marketing consulting
firms that help the organisation target and
promote its products to the right markets
 Financial Intermediaries
include banks, credit organisations,
insurance organisations and other
businesses that help to finance transactions
or insure against the risks associated with
the buying and selling of goods
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Customers
 The marketing organisation must study its
customer markets closely. The organisation
can operate in five types of customer
markets:
1. Consumer markets
2. Business markets
3. Reseller markets
4. Government markets
5. International markets
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Figure 3.3:
Types of Customer Markets
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Competitors
 Every organisation faces a wide range of
competitors. The marketing concept states
that, to be successful, an organisation must
provide greater customer value and
satisfaction than its competitors.
 No single competitive marketing strategy is
best for all organisations. Each marketer
should consider its own size and industry
position compared with those of its
competitors.
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Publics
 The organisation’s marketing
environment also includes various
publics. A public is any group that has
an actual or potential interest in, or
impact on, an organisation’s ability to
achieve its objectives. Every
organisation is involved with seven
types of publics
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Figure 3.4: Types of Publics
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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The Marketing Organisation's
Macro-Environment
Kotler, Brown, Adam & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Figure 3.5: Major Forces in the
organisation’s Macro-Environment
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Demographic Environment
Growing
Ethnic
Diversity
Education
Age
Structures
Key
Demographic
Trends
Geographic
Shifts
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
Changing
Family
Structure
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Demographic and
Economic Environments

Demographic

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
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
Changing age structure of population
Changing household
Geographic shift in population
Better educated and more white-collar population
Increased ethnic diversity
Social

Changes in income
 Changing consumer spending patterns
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Economic Environment
Economic
Development
Key
Economic
Concerns for
Marketers
Changes
in Income
Changes
in Consumer
Spending Patterns
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Natural Environment

Shortages of raw materials
 Increased costs of energy
 Increased pollution
 Government intervention in natural resource
management
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Natural Environment
Shortage of
Raw Materials
Government
Intervention
Key Areas
of Concern
in the Natural
Environment
Energy
Costs
Increased
Pollution
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Example: Toyota targets
the environmental concerns of
motorists
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Technological Environment
Fast Pace of
Change
High R & D
Budgets
Issues in the
Technological
Environment
Focus on Minor
Improvements
Increased
Regulation
Kotler, Adam, Brown & Armstrong: International Marketing 3e © 2006 Pearson Education Australia
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Political Environment
Legislation
Enforcement
Key
Trends in the
Political
Environment
Greater
Concern for
Ethics
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Cultural Environment
 The cultural environment is made up of
institutions and other forces that affect
society’s basic values, perceptions,
preferences, and behaviours. People grow up
in a particular society that shapes their basic
beliefs and values. They absorb a world view
that defines their relationships to themselves
and others. The following cultural
characteristics can affect marketing
decisions.
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Shift in Secondary Cultural
Values
Of
Oneself
Of
the Universe
Of
Nature
People’s
Views
Of
Others
Of
Organisations
Of
Society
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