List the elements of the marketing organisation’s microenvironment and discuss their importance in the marketing process.
Explain the broad concept of the organisation’s macroenvironment.
Outline the key changes occurring in the organisation’s macroenvironment including shifts in the demographic, economic, technological, political, cultural and natural environments.
The Marketing Environment
The forces close to the company that directly affect its ability to serve its customers .
The firm itself
Its marketing channel
Competitors and influential publics
The broader societal forces that can influence the whole microenvironment .
Figure 3.1 Main Players Organisation’s Micro-environment
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.
Publics - any group that has an interest in the firm.
Figure 3.2 An Organisation’s Internal Environment
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
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
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 .
Marketing Intermediaries help a firm to promote; sell; and distribute its goods to final buyers. These intermediaries include:
who help the firm find suitable customers and sell the products to them.
Physical Distribution Firms
who help the firm to store goods, and move them from point of origin to end destination.
Marketing Services Agencies
are 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 .
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 .
The marketing firm must closely study its customer markets. The firm can operate in five types of customer markets :
Each one will have different characteristics
Figure 3.3 Types of Customer Markets
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.
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 .
Figure 3.4 Types of Publics
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
Which of the following is not part of the organisation’s micro-environment?
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.
Figure 3.5 Main Forces in the Organisation’s Macro-environment
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.
Figure 3.6 Projected Australian Population Growth 2001-2101
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 .
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.
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 .
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.
The popularity of professional wrestling, body piercing, and the Beanie Baby collecting mania are all facets of the __________ environment.
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”.
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.
Which of the following a not an example of demographic change?
decreasing household size
increased demand for a convenience based lifestyle
growing regional centres
higher education levels attained
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.