1. Chapter 2(3.2,3.4)
The Marketing Environment

2. Our changing world Changing attitudes to: work leisure lifestyle
new gender and family roles
communication revolution
tougher market conditions
cultural and security threats.

3. External macro-environment

4. The six interrelated macro-environmental forces
demographics
economic conditions
competition
social and cultural forces
political and legal forces
technology.

5. 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 households
increasing cultural diversity
moving north, tremendous growth is occurring in southeast Queensland.

6. 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, and 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.

7. 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.

8. Competition (continued)
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.

9. Competition (continued)
A marketing program is influenced by four types of competitive structures:
1. pure competition
2. monopolistic competition
3. oligopoly
4. monopoly.

10. 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.).

11. 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.

12. 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.

13. 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.

14. 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.

15. Social and cultural forces (continued)
Our lifestyles, social values and beliefs are changing much faster then they used to. Some of the changes that have significant marketing implications are:
quantity of possessions or quality of life?
changing gender roles
attitudes towards health, nutrition and well being.
impulse buying and consumer debt
desire for the convenience and a premium on time.

16. Industry life cycles
Introduction—new products or services motivate prospective customers. For example, third-generation telephones.
Growth stage—once a product has proved successful in satisfying customer needs, rapid growth can occur. For example, personal notebooks and espresso coffee making machines.
Maturity stage—profitability tends to taper off as the market and has been largely exploited by both the innovating firm and the competitors that have been attracted to the industry. For example, large sized four wheel drives, and desk top computers.

17. Industry life cycles (continued)
Decline stage – Growth might begin to decline as substitute products begin to appear or customer needs change. For example, fax machines, drive- in movies and CDs.
If new technology solutions appear, then the growth cycle can begin again—often with a fresh set of competing firms.

18. Political and legal forces
The five categories affecting political–legal influences on marketing are:
1. monetary and fiscal policies.
2. social legislation and regulations.
3. relationships with individual industries.
4. legislation specifically related to marketing.
5. the provision of information and the purchase of products.

19. 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.

20. 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.

21. External micro-environment
Micro-forces that are external to the firm but over which it has direct involvement:
customers
suppliers
marketing middlemen
specific competitors
other publics.

22. External micro-environment

23. Suppliers and the firm’s market
Customers—people or organisations with needs or wants, purchasing power, buying behaviour.
Suppliers—organisations that provide the firm with the items it needs to conduct business.
Marketing middlemen—firms or individuals who help to sell and distribute another firm's goods or services.

24. Suppliers and the firm’s market (continued)
Specific competitors—satisfying a customer’s wants better than its competitors can.
Other publics—a range of groups that can have an influence on the firm, e.g., media, community, shareholders.

25. 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 buyers and sellers.
They complete the trade or channels of distribution.

26. Internal environment
The firm’s marketing system is also shaped by the micro-environmental forces within the firm, i.e.:
The relationship between the different functions in a firm.
The environment and resources within the marketing department.

27. Internal and non-marketing resources
Insert Fig 2.3 p 53

28. The firm’s entire environment and marketing program