topic 2 marketing environment. 2-2 brassington & pettitt, essentials of marketing 2e, © pearson...
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Topic 2
marketing environment
2-2Brassington & Pettitt, Essentials of Marketing 2e, © Pearson Education 2007
learning objectives_1
• Importance of the external environment to marketing decision-making
• Scanning the environment as a means of early identification of opportunities and threats
2-3Brassington & Pettitt, Essentials of Marketing 2e, © Pearson Education 2007
learning objectives_2
• The European marketing environment
• Factors that affect the marketing environment
• Influences at work within each of those categories and their implications for marketing
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Marketing environment
• Comprised of actors and forces affecting marketing management’s ability to develop and maintain successful relationships with its target customers.
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Environmental Scanning Defined
Environmental Scanning is the collection and evaluation of
information from the wider marketing environment that might affect the
organisation and its strategic marketing activities
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COMPONENTS OF THE MARKETING ENVIRONMENT (pg. 16/7 Textbook)
• Micro-environment
• Macro-environment
• Internal environment
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Figure 1.2 The Micro Environment
Suppliers
Our organisatio
n CompetitionIntermediaries
Customers
The Marketing Environment
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THE MICRO-ENVIRONMENT
• Organisations and individuals who directly or indirectly affect the activities of a company. It includes:– Customers
– Intermediaries
– Suppliers
– Competitors
– Other stakeholders (next slide)
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STAKEHOLDERS OF ORGANISATIONS
• Other Stakeholders include:
– employees
– local communities
– government
– financial community
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An INTEGRATIVE BUSINESS FUNCTION? (Textbook pg. 18/9)
• The role of marketing in bringing (departmental) functions together in emphasing the customer focus?
- marketing the GLUE?
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STEP analysis
Organisations do not operate in a vacuum. They need to look outwards at the following factors:
• Socio-cultural.
• Technological.
• Economic and competitive.
• Political and regulatory.
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Figure 2.1 Elements of the External Environment
Technological
Political/regulatory
Sociocultural
Economic/Competitive
Our Firm & Marketing Mix
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Elements of the external environment
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MONITORING AND RESPONDING TO ENVIRONMENTAL CHANGE
• Organisations that do not adapt may decline and die
• To avoid this, organisations must:
– understand what is going on in their business environment
– respond and adapt to this change
• Information about the environment is crucial, but won’t produce decisions
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The Sociocultural Environment
• Demographics
• Sociocultural influences
– Lifestyle expectations
– Attitudes
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Macroenvironment:Demography
“..the study of the size, composition, and distribution of the human population in relation to social factors such as geographic boundaries.”
See: www.census.gov
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Demographics
• Today’s population of approx 6.3 billion is expected to increase to 8.9 billion by 2050.
• Ageing population and increased life expectancy in first world countries.
• Low birth rate in first world countries.
• Changing family patterns, increased amount of working women and single women.
• Rising number of educated people
• Increasing diversity
• Changing consumer spending patterns
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World Population Growth
0
1
2
3
4
5
6
7
1650 1700 1750 1800 1850 1900 1950 2000
0
1
2
3
4
5
6
7
1650 1700 1750 1800 1850 1900 1950 2000
Bil
lio
ns
of
peo
ple
Bil
lio
ns
of
peo
ple
182018201 billion1 billion
193019302 billion2 billion
198719875 billion5 billion
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Changes in European Union Population
0
5
10
15
20
25
30
35
40
45
50
0 - 14 15 - 44 45 - 64 65+
1995
2010
Per
cent
age
5
Age Groups
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CHANGING SOCIAL TRENDS RESULT IN NEW PATTERNS OF DEMAND
• More affluent, working mothers has led to growth in kindergartens
• What other social trends have marketers reacted to?
• What changes should they be anticipating?
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Changes in Leisurely Activities
• Earlier retirements
• Desire for travel abroad
• Active holiday agendas
Source: © Saga Holidays http://www.holidays.saga.co.uk
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Issues to Consider
• Population distribution
• Household patterns (e.g., average number of occupants per household, expenditures across product categories
• Available disposable income
• Changes in consumer preferences
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Figure 2.2. How might societal attitudes influence marketing?
Environmental issues
Animal welfare
Business ethics
Personalethics
Marketingstrategy
Health andsafety
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Environmental Issues (Precious Woods)
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Animal Welfare
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Health Concerns (Heinz’s health agenda)
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The Technological Environment
• Products
• Materials/ components
• Production processes
• Administration/ distribution
• Marketing/ customers
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Examples of Technological Advances
Production
• Computer aided design (CAD)
• Computer aided manufacturing (CAM)
• Quality assurance/ control (QA)
• Materials handling
Marketing
• Market research
• Databases
• Advertising media
• Online ordering
• Sales force support
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The Economic/Competitive Environment
Macro Micro
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Figure 2.3 Macroeconomic Influences
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The Microeconomic Environment
Monopoly
Perfect Competition
Oligopoly
MonopolisticCompetition
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Political/Regulatory
• National and local government
• EU
• Regulatory bodies
• Trade associations
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eg Cadbury’s Dairy Milk
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Influences on Political/ Regulatory Environment
Sociocultural factors
Media
Lobbyists
Public opinion
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The Internal Organisation
FinanceR & D,
EngineeringPurchasing
Production
Organisation
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Corporate and social responsibility (CSR) -
Societal and ethical marketing
• An emergent and growing marketing philosophy.
• As companies strive to find effective ways to attract and retain customers.
• Importance of handling marketing responsibly in a way that contributes to the well being of society.
• Links between good ethics, market share and profitability.
• Not only consider its customers and its profitability but also the good of the wider community (local and globally).
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Sustainable Marketing Defined
Sustainable marketing is the establishment, maintenance, and
enhancement of customer relationships so that the objectives of the parties involved are met without compromising the ability of future generations to achieve their own
objectives.
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UK report ‘Who are the Ethical consumers?’
The potential for ethical products and services in the UK could be as high as 30% of consumer markets.
52% of consumers had recommended companies because of the companies’ responsible reputation.
44% of consumers had avoided a product or service because of a company’s behaviour.
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CSR and its impact on the marketing process
• Internalisation of costs (making the polluters pay).
• Green taxes.
• Legislation.
• Support for cleaner technology.
• Redesigned products for recycling.
• Reverse distribution channels to receive products for recycling.
• Consumer education on sustainability.