Download Chapter 2

Chapter 2
The Marketing Environment
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–1
Our changing world
• Changing attitudes to
–
Work.
– Leisure.
– Lifestyle.
• New gender and family roles.
• Communication revolution.
• Tougher market conditions.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–2
External macro-environment
Insert Fig 2.1 p 38
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–3
THE SIX INTERRELATED MACROENVIRONMENTAL FORCES
• Demographics.
• Economic conditions.
• Competition.
• Social and cultural forces.
• Political and legal forces.
• Technology.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–4
Demographics
• The statistical study of human population and
its distribution. E.g. age, gender, income,
religion.
• Ageing population—baby boomers (pre-1965)
– Generation ‘X’—mid-1960s–1970s.
– Single people.
– Two-person household.
– Increasing cultural diversity.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–5
Economic conditions
• 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:
– e.g. unemployment, inflation, interest rates.
• Economic conditions influence business cycles,
which includes: prosperity recession and
recovery in the economy. This has an impact
on what people buy, when and how.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–6
Competition
• Companies face competition from three main
sources:
1 Brand—from manufacturers of similar
products.
2 Substitute products—dissimilar products
satisfying the same needs.
3 Indirect—other firms trying to win
customers’ purchasing power.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
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.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–8
Competition
• A marketing program is influenced by four types of
competitive structures:
1 Pure competition.
2 Monopolistic competition.
3 Oligopoly.
4 Monopoly.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
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.
• E.g. some agricultural products
(fruits etc.).
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–10
Monopolistic competition
• Marketers attempt to gain differential
advantage over their competitors.
• Marketer aims to get the buyer to perceive
an attractive difference in their offerings.
• Marketers have more control over products
and price owing to perceived differences.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
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.
• E.g. air travel, beer, cigarettes.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–12
Monopoly
• A market structure where there is only one
supplier of a product, for which there are no
close substitutes.
• E.g. CSR (sugar refining), electricity and gas
suppliers (usually government-owned).
• Monopolies are becoming rare in Australia (e.g.
even Telstra now has competition).
• Sometimes patent protection can provide firms
with something close to a monopoly.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–13
Social and cultural forces
• Marketers are faced with changing socio-cultural
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.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–14
Political and legal forces
• The five categories affecting political–legal
influences on marketing
1 Monetary and fiscal policies.
2 Social legislation and regulations.
3 Government relationships with individual
industries.
4 Legislation specifically related to marketing.
5 The provision of information and the purchase
of products.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
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 can
improve our lives in one area while creating
environmental and social problems in
another.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–16
Monitoring the environment
• Marketing intelligence involves:
–
–
–
–
Monitoring business trends and new
developments.
Studying population growth models (ABS).
Reviewing government publications, industry
periodicals and news releases.
Attending conferences and exhibitions.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–17
External micro-environment
• Micro-forces that are external to the firm
that is directly involved.
The firm’s market.
– Its producer–suppliers.
– Its marketing intermediaries.
–
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–18
External micro-environment
Insert Fig 2.2 p 51
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–19
Suppliers & the firm’s market
•
Suppliers—Organisations that provide the firm with the
items it needs to conduct business.
• Market 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.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–20
Marketing intermediaries
•
Defined as independent business organisations that directly
assist the flow of products and services between a marketing
organisation and its markets.
•
Resellers—wholesalers and retailers: the middlemen.
Facilitating organisations—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.
•
•
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–21
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.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–22
Internal and non-marketing resources
Insert Fig 2.3 p 53
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–23
The firm’s entire environment and
marketing program
Insert Fig 2.4 p54
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
2–24