Learning objectives1. Discuss the external environment of

marketing and explain how it affects an organisation

2. Describe the sociocultural factors that affect marketing

3. Explain the importance to marketing managers of multiculturalism and growing ethnic markets

4. Identify consumer and market reactions to the state of the economy

Learning objectives (cont.)

5. Identify the impact of technology on an organisation

6. Discuss the political and legal environment of marketing

7. Explain the basics of foreign and domestic competition

8. Describe the role of ethics and ethical decisions in business

9. Discuss corporate social responsibility

1Discuss the external environment of marketing and

explain how it affects an organisation

Learning objective

1 External environment

• The internal environment is generally controllable, and is discussed in other parts of this text. The external environment are components that are not controlled by the marketing manager or the organisation.

1 External environment variables

• Economic• Competitive• Technological• Political and legal.• Sociocultural

1 Understanding the external environment

• Environmental scanning – the collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organisation or the implementation of the marketing plan

• Environmental management – is where organisations implement strategies in an attempt to shape the external environment

1 Tools used to monitor external environment

• Organisations have a vast array of tools and techniques to monitor and measure the external environment. Tools include a swot analysis, IFE and EFC evaluation matrices.

2Describe the sociocultural factors that affect marketing

Learning objective

• The social change is perhaps the most difficult external variable for marketing managers to forecast.

• Social factors include– Attitudes– Values– Lifestyle

2 Sociocultural factors

2 Reviewing de socio-cultural environment by

year born• Four key groups

– Baby boomers (1946 - 65)– Generation X (1965 – 81)– Generation Y (1981 – 2000)– Generation Z (2000 to present)

2 Marketing oriented values

• Major changes in the value, and all way of life

• People are more efficient in sourcing information, seeing something that they are interested and using this information.

• Growth in traditionalism, ethnicity and patriotism, while attributing personal success with consumerism and technological rationality.

2 Component lifestyles

• People are adopting a number of different lifestyle modes.– for example: a professional marketer, may be a connoisseur chef, who enjoys rally driving and going to live concerts.

3Explain the importance of the marketing managers of

multiculturalism and growing ethnic markets

Learning objective

3 Demographic environment

Two major factors influencing the demographic•The changing character of families.•Multiculturalism

3 The changing character of families

• The family structure of a father, mother and two children represents less 25% of Australian families.

• Increase in the number of dual career families.

• Greater reliance on home entertainment

3 Multiculturalism

• Multiculturalism recognises and celebrates cultural diversity.

• The changing profile of our population has seen changes in what we eat, what we do, and how we behave.

4Identify consumer and market reaction to the state of

the economy

Learning objective

4 Economic environment

Three economic areas of concern for most marketers include:

• The level of disposable income• Inflation• Recession

5Identify the impact of technology on an organisation

Learning objective

5 Technological environment

• Technology is one of the most revolutionary dimensions of the external environment

• Conversion of ideas to products• The increased speed and capacity of the Internet, and

• The ever-increasing of electronic media devices, allowing for instant personal communication

6Discuss the political and legal environment of marketing

Learning objective

6 Political and legal environment

• Organisations need government regulations to provide protection and guidance in the marketplace

• All aspects of the internal environment is controlled by the laws and regulations.

• Identifying trends, and knowing the laws allows organisations to maximise their marketing effort.

• Organisations also need to be aware of laws and regulations, in other countries

7Explain the basics of foreign and domestic competition

Learning objective

7 Competitive environment

• Refers to a given industry category, the number of competitors, an organisation must face the relative size of the competition and the degree of interdependency within the industry.

7 Industry analysis

• Industry analysis considers the industry size trains demand characteristics and the emergence or existence of new segments. That could impact on the viability of your possession

7 Competition

• Discussion of the competitive forces faced by an organisation

• Types of market:– Local– Domestic– International – Global

7 Competitors

• Need to understand the practices and behaviour of the organisations competitors.

• Need to appreciate how they will react to a given situation

8Describe the role of ethics and ethical decision in

business

Learning objective

8 Social and ethical behaviour

• Ethics refers to the moral principles or values that generally govern the conduct of an individual or organisation.

• Standard can be legal but not ethical and ethical but not legal.

• Morals are the rules people develop as a result of cultural values and norms.

• Morals can be considered as the foundation of ethical behaviour but are based on cultural values.

• In a multicultural society moral, ethic and legality can be evolving

8 Morality and business ethics

• Three approaches to review an act as being ethically and morally appropriate:– Examine the consequences of an act– Consider rules in the form of customs, laws, professional standards and common sense

– Moral chartered within the individual:• Preconventional morality• Conventional morality• Postconventional morality

8 Ethical business decision making

Ethical business decision making;– Extent of ethical problem in the organisation

– Top managements action on ethics– Potential size of consequence– Social consensus– Probability of a harmful outcome– Length of time between decision and the onset of consequences

– Number of people to be affected

8 Ethical guidelines

• Many organisations developing a code of ethics

• A code of ethics needs to be clear but neither too detailed or too specific

9Discuss corporate social responsibility

Learning objective

9 Corporate and social responsibility

• Ethics and social responsibility are closely intertwined

• Corporate social responsibility = organisation’s concern for society’s welfare

• Usually on four fronts– Economic– Legal– Ethical– Philanthropic