MG206 Chapter 3 Slides On Marketing Principles and Strategies

Chapter 3
Analysing the
marketing
environment
PowerPoint to
accompany:
Cover image: VLADGRIN/Shutterstock.com
Analysing the marketing environment

Learning objectives
Objective 1 Describe the environmental forces that affect the
companys ability to serve its customers.
Objective 2 Explain how changes in the demographic and economic
environments affect marketing decisions.
Objective 3 Identify the main trends in the firms natural and
technological environments.
Objective 4 Explain the key changes in the political and cultural
environments.
Objective 5 Discuss how companies can react to the marketing
environment.
Copyright 2015 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781486002696/Armstrong/Principles of Marketing/6e
Company-wide strategic planning:

Defining marketings role
A companys marketing environment consists of

the actors and forces outside of marketing that
affect marketing managements ability to build
and maintain successful relationships with target
customers. Companies constantly watch and
adapt to the changing environment.
Actors in the marketing environment
The company
Top
management
Finance
R&D
Purchasing
Operations
Accounting
Actors in the marketing environment: Suppliers
Suppliers form an important link in

the companys overall customer
value delivery system.
Most marketers today treat their

suppliers as partners in creating
and delivering customer value.
Types of marketing intermediaries
Resellers
Find
Find &
& sell
sell to
to customers
customers
Physical distribution firms

Inventory & move goods
Marketing service agencies

Research, advertising, media &
consulting
Financial intermediaries
Finance transactions or insure against
risk
Getty Images Australia Pty Ltd
Financial intermediaries: Banks and insurance companies are among the many
financial intermediaries that comprise the broader value network in which a business
operates. Managing these relationships is also important.
7
Actors in the marketing environment:

Intermediaries, market research firms and
advertising agencies
Actors in the marketing environment: Competitors
To be successful, a company must

provide greater value than its
competitors.
Marketers must do more than simply

adapt to the needs of target consumers;
they must gain strategic advantage by
positioning their offerings strongly
against competitors.
Actors in the marketing environment: Publics

Financial
public
Internal
public
Publics are
any group that has
an actual or
potential interest in
or impact on an
organisations
ability to achieve
its objective.
10
Media
Government
Publics
Publics
Citizens
action
groups
General
public
Local
public
Actors in the marketing environment: Customers

Companies might target any or all of five types of customer markets:
Consumer
Consumer markets
markets
Business
Business markets
markets
Reseller
Reseller markets
markets
Government
Government markets
markets
International
International markets
markets
Each
Each market
market type
type has
has special
special characteristics
characteristics that
that calls
calls for
for
careful
careful study
study by
by the
the seller.
seller.
11
Discussion question
Consider the marketer of

a new energy drink.
How would each of the microenvironmental factors be
involved in their marketing
efforts?
12
The companys macroenvironment
13
Demographic environment
Demography is the study of human populations in terms of
Population
Population size,
size, density
density &
& diversity
diversity
Location
Location &
& geographic
geographic population
population shifts
shifts
Age
Age &
& gender
gender
Family
Family size
size &
& structure
structure
Educational
Educational characteristics
characteristics
Occupation
Occupation
Race/Ethnicity
Race/Ethnicity
Other
Other relevant
relevant demographic
demographic statistics
statistics
Marketers
Marketers keep
keep close
close track
track of
of demographic
demographic trends
trends &
& developments
developments
14
Demographic environment: Changing age structure
Born 194664
15
Born 196576
Born 19772000
Copyright 2015 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781486002696/Armstrong/Principles of Marketing/6 th edition
Discussion question
Do marketers need to develop

separate products or marketing
programs for each of the
different generations?
16
Changing age structure: Generational segments
17
Demographic environment: Changing family

structure
Rise of single parent
families & families with
no children
Decline in household size
Increasing number of
working women
18
Demographic environment: Population diversity
19
Economic environment
The
The economic
economic environment consists
consists of
of factors
factors that
that affect
affect
consumer
consumer purchasing
purchasing power
power & spending patterns, including
changes
changes in
in
Income
Income &
& income
income distribution
distribution
Spending
Spending patterns
patterns
20
Natural environment
The
The natural
natural environment
environment involves
involves the
the natural resources
resources that
that
are
are needed
needed as
as inputs
inputs by
by marketers
marketers or
or that
that are
are affected
affected by
by
marketing
marketing activities.
activities.
Key natural environment issues:
Shortages
Shortages of raw materials
Increasing
Increasing pollution
pollution
Rise
Rise in
in government
government intervention
intervention
21
Technological environment
Perhaps the most

dramatic force
shaping our future,
the technological
environment,
involves forces that
create new
technologies, new
products and market
opportunities.
22
Technological environment
23
Discussion question
Give examples of how new

technologies have influenced
what we buy, how we pay and
how we shop.
24
Political and social environment

The
The political
political environment
environment consists
consists of
of laws,
laws, government
government
agencies
agencies and
and pressure
pressure groups
groups that
that influence
influence or
or limit
limit various
various
organisations
organisations and
and individuals
individuals in
in aa given
given society.
society.
Key political issues:
Legislation
Legislation affecting
affecting business:
business:
Increasing
Increasing legislation
legislation
Changing
Changing government
government agency
agency enforcement
enforcement
Emphasis
Emphasis on
on ethics
ethics and
and socially
socially responsible
responsible
behaviour:
behaviour:
Social
Social responsibility
responsibility
Cause-related
Cause-related marketing
marketing
25
Cultural environment
The
The cultural
cultural environment
environment is
is made
made up
up of
of institutions
institutions and
and
other
other forces
forces that
that affect
affect aa societys
societys basic
basic values,
values,
perceptions,
perceptions, preferences
preferences and
and behaviours.
behaviours.
The
The persistence
persistence of
of culture
culture
Core
Core beliefs
beliefs &
& values:
values: relatively
relatively
resistant
resistant to
to change
change
Secondary
Secondary beliefs
beliefs &
& values:
values: more
more
open
open to
to change
change
26
Cultural environment: Peoples views of

Themselves
Nature
Others
Organisations
Society
Universe
27
27
Responding to the marketing environment

Reactive
Reactive approach
approach
Assumptions:
Assumptions: The
The environment
environment is
is largely
largely uncontrollable.
uncontrollable.
Strategies:
Strategies: Research,
Research, understand,
understand, react
react and
and adapt.
adapt.
Proactive
Proactive approach
approach
Assumptions:
Assumptions: The
The environment
environment is
is partially
partially controllable.
controllable.
Strategies:
Strategies:
Hire
Hire lobbyists
lobbyists to
to influence
influence legislation
legislation affecting
affecting their
their
industries.
industries.
Stage
Stage media
media events
events to
to gain
gain favourable
favourable press
press coverage/run
coverage/run
advertorials
advertorials to
to shape
shape public
public opinion.
opinion.
Instigate
Instigate legal
legal actions
actions and
and regulatory
regulatory complaints
complaints to
to keep
keep
competitors
competitors in
in line.
line.
Form
Form contractual
contractual agreements
agreements to
to better
better control
control distribution
distribution
channels.
channels.
28
29
Despite the unpredictability of the external

environment, enlightened marketing managers
take a proactive rather than reactive
approach to the marketing environment.
30
Suggested resources
Articles and case studies
Mindmap, PEST analysis (short article & video), http://
www.mindtools.com/pages/article/newTMC_09.htm
PESTLE analysis template, http://
pestleanalysis.com/how-to-create-pestle-analysis-template
Videos
ABC, Difference of Opinion (collection of video segments on a variety of
topics, including the digital age, attitudes of Gen Y), http://
www.abc.net.au/tv/differenceofopinion/episodes/episode_11.htm
Grey Worldwide, Eye on Australia (annual Australian consumer pulse survey,
video 4.5 minutes plus PDF download), http://eyeonaustralia.com.au
31
Additional resources
Selected social and economic indicators
ABS, Future population growth and ageing (feature article), http
://www.abs.gov.au/AUSSTATS/abs@.
nsf/Lookup/4102.0Main+Features10March%202009
ABS, Spending patterns of couple families (feature article), http
://www.abs.gov.au/AUSSTATS/abs@.
nsf/Lookup/4102.0Main+Features30July+2013
ABS, The average Australian (feature article),
http://www.abs.gov.au/AUSSTATS/abs@.
nsf/Lookup/4102.0Main+Features30April+2013
Note: All ABS feature articles are supported by detailed reports and
downloadable data-cubes. Instructors may wish to point out relevant
publications such as Household Expenditure Survey, Australian Social
Trends and Census data, which learners may wish to consult for
assignment and wider reading purposes.
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Chapter 3

Cover image: VLADGRIN/Shutterstock.com

Analysing the marketing environment

Company-wide strategic planning:

A companys marketing environment consists of

Actors in the marketing environment

Actors in the marketing environment: Suppliers

Suppliers form an important link in

Most marketers today treat their

Types of marketing intermediaries

Physical distribution firms

Marketing service agencies

Getty Images Australia Pty Ltd

Actors in the marketing environment:

Actors in the marketing environment: Competitors

To be successful, a company must

Marketers must do more than simply

Actors in the marketing environment: Publics

Actors in the marketing environment: Customers

Consider the marketer of

The companys macroenvironment

Demographic environment: Changing age structure

Do marketers need to develop

Changing age structure: Generational segments

Demographic environment: Changing family

Decline in household size

Demographic environment: Population diversity

Perhaps the most

Give examples of how new

Political and social environment

Cultural environment: Peoples views of

Responding to the marketing environment

Responding to the marketing environment

Responding to the marketing environment

Despite the unpredictability of the external

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