bus169 kotler chapter 03
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The Global
Marketing Environment
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Chapter Objectives
1. List the elements of the marketing organisation’s microenvironment and discuss their importance in the marketing process.
2. Explain the broad concept of the organisation’s macroenvironment.
3. Outline the key changes occurring in the organisation’s macroenvironment including shifts in the demographic, economic, technological, political, cultural and natural environments.
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The Marketing Environment
• Micro-environment (internal)– The forces close to the company that directly affect its
ability to serve its customers.• The firm itself• Its marketing channel• Customer markets• Competitors and influential publics
• Macro-environment (external)– The broader societal forces that can influence the
whole microenvironment.– Demographic; cultural– Economic; natural– Political; technological
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Figure 3.1 Main Players Organisation’s Micro-environment
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The Marketing Organisation's Micro-environment
• The Marketing Organisation– Success will depend on how well information is shared
with the organisation’s inter-related groups (Fig. 3.2).
• Suppliers - those who provide the resources needed by the company.
• Marketing Intermediaries• Customers• Competitors • Publics - any group that has an interest in the firm.
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Figure 3.2 An Organisation’s Internal Environment
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The ‘marketing’ orientation
As we saw last week, a marketing firm can select from four basic philosophies when implementing its approach to the market.
Those organisations that aim to adopt the ‘marketing’ philosophy need to continually ‘think customer’, and work towards meeting and exceeding customer expectations
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Suppliers
• Suppliers are an important link in the firm’s overall customer ‘value delivery system’. – Marketing managers must watch for:
• supply availability, including delays or shortages• labour strikes • price trends of supplies
• Each of the above events can have a direct effect on customer satisfaction in the long term.
• Rising supply costs may force price increases that can reduce the firm’s sales volumes/ profits.
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Marketing Intermediaries
• Marketing Intermediaries help a firm to promote; sell; and distribute its goods to final buyers. These intermediaries include:
• Resellerswho help the firm find suitable customers and sell the products to them.
• Physical Distribution Firmswho help the firm to store goods, and move them from point of origin to end destination.
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Cont’d
• Marketing Services Agenciesare the facilitating agencies: - marketing research companies; advertising agencies; media firms; export agencies; and marketing consulting firms that help the firm target/ promote its products to the right markets.
• Financial Intermediaries– include banks; credit organisations; insurance firms;
and other businesses that can help to finance transactions or insure against the risks associated with the buying and selling of commercial goods.
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Customers• The marketing firm must closely study its
customer markets. The firm can operate in five types of customer markets: 1. Consumer markets2. Business markets3. Reseller markets4. Government markets5. International markets
Each one will have different characteristics
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Figure 3.3 Types of Customer Markets
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Competitors
• Every organisation faces a wide range of competitors. The ‘marketing’ concept states that, to be successful, a firm must provide
greater customer value and
satisfaction than its competitors. • No single competitive marketing strategy is
best for all organisations. Each firm should consider its own size and industry position compared to that of its competitors.
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Publics
• The marketing environment also includes various publics.
A public is any group that has an actual or potential interest in, or influence on, a firm’s ability to achieve its objectives.Every organisation is, potentially, involved with seven types of publics.
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Figure 3.4 Types of Publics
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Cont’d
• Financial gain access to business funds• Media maintain positive publicity• Government must comply with regulations• Citizen consumer and minority groups• Local generate good community relations• General gain acceptance by general
public• Internal positive staff attitude/ motivation
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Which of the following is not part of the organisation’s micro-environment?
A. economic
B. supplier
C. customer
D. competitor
E. marketing intermediary
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The Marketing Organisation’s Macro-environment
• The organisation and its micro-environment operate in a larger macro-environment of forces that shape opportunities and pose threats to the organisation. Firms must carefully watch and respond to these forces.
• The macro-environment consists of 6 forces.
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Figure 3.5 Main Forces in the Organisation’s Macro-environment
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Macro-environment (Cont’d)
• 1. Demographic Environment– Changing age distribution of population (increases and
decreases in the different age groups); changing types of households; geographic shifts in population; better educated, increased white-collar population; increased ethnic diversity.
• 2. Economic Environment– Greater economic development; increase in disposable
income; changes in consumer spending patterns.
• 3. Natural Environment– Climate change; shortage of raw materials; increased cost
of energy; increased pollution; government intervention.
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Figure 3.6 Projected Australian Population Growth 2001-2101
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Macro-environment (Cont’d)
• 4. Technological Environment– Forces that affect new technologies, creating new
product and market opportunities; rapid change; high R & D costs.
• 5. Political Environment– Laws; government agencies; and pressure groups
that influence and restrict firms and individuals.
– Legislation to Regulate Business• ACCC; Trade Practices Act; Government regulatory
agencies; increased emphasis on business ethics and socially responsible actions.
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6. Cultural Environment
• Cultural environment is made up of institutions and other forces that affect society’s basic values; perceptions; preferences; behaviours.
• People grow up in a particular society that shapes their basic beliefs and values. As a result, they adopt a view that defines their relationships to themselves and others.
• Cultural characteristics can directly affect behaviour and, therefore, buying decisions.
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Cont’d
• Persistence of cultural values– People hold beliefs and values which are
either core or secondary.
• Core beliefs and values are passed on from parents and are reinforced by society. They tend to be consistent over time.
• Secondary values are not as fixed, and are more open to change.
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Shifts in Secondary Cultural Values
• Cultural shifts do take place– e.g. the influence of popular music; influence
of movie personalities on fashion etc.
• The main cultural values of a society are expressed in people’s view of themselves; of others; and of organisations; society; nature; and the universe.
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The popularity of professional wrestling, body piercing, and the Beanie Baby collecting mania are all
facets of the __________ environment.
A. technological
B. demographics
C. political-legal
D. cultural
E. economic
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Cultural Values
• People’s view of themselves
– The “ME” society?
• People’s view of others
– The “WE” society?
• People’s view of organisations
– Organisations need to find new ways to win consumer confidence. They need to review their activities and ensure they are viewed as “good corporate citizens”.
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Cultural Values
• People’s view of society– Patriots; reformers; and malcontents.
• People’s view of nature
– Attitudes to nature affect product development e.g. ecotourism.
• People’s view of the universe– Variations in beliefs about the origin of the
universe; religious beliefs.
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Which of the following a not an example of demographic change?
A. aging population
B. decreasing household size
C. increased demand for a convenience based lifestyle
D. growing regional centres
E. higher education levels attained
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Responding to the Marketing Environment
• Many companies view the marketing environment as an uncontrollable element to which they must adapt.
• Other companies take an environmental management perspective.
• Marketing management cannot always affect environmental forces but, wherever possible, they should be proactive rather than reactive when dealing with them.