1. Marketing: An Introduction for Irish
Students
Aim of this Topic ..
1. Understand the environment in which the
firm and marketing operates
2. Familiar with the micro environment and
how it affects marketing
3. How the macro environment influences
marketing and the firm
4. Understand how a SWOT & PEST
analysis can help in assessing the wider
environment

2. © Donal Rogan
The Environment
• The environment refers to the forces external
to the firm that affect its ability to develop
and maintain successful transactions.
• FACT: Environmental forces can change,
therefore marketers need to be flexible and able
to adapt to these changes.
• The environment requires constant monitoring.

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The Environment
The Environment can be divided into two
main areas:
1. The micro-environment
2. The macro-environment

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The Forces in the Marketing
Environment

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The Micro-Environment
The micro-environment refers to a collection of
forces that include:
• The company
• Suppliers
• Intermediaries
• Competitors
• Customers
• Publics

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The Company
• Consists of individuals or groups of people working
together to achieve a common purpose.
(management, Finance, R&D, Purchasing, Operations,
Accounting)
• This common purpose can be defined as
• Serving the needs of the customer.
• engages in a value-adding process.
• If customers place enough value on the result of this
process, they may buy the product or service.

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The objective of Marketing is
concerned with..
• Internal marketing involves the application of the
marketing policy within the firm.
• The objective of internal marketing is for
• 1. The firm’s employees to be committed to the goal
of ensuring the best possible treatment of
customers.
• 2. In focusing or refocusing the company’s
personnel on the importance of the customer.

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Suppliers
• suppliers supply the company goods and
services.
• Business-to-business marketing covers the
marketing activities of firms that supply other
firms with goods and services that are
incorporated into the value-adding process.
• It is important that the marketer is aware of
changes that may be taking place in the
supplier environment as it may have a knock-
on effect on the firm.

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Intermediaries
Intermediaries include:
• Wholesalers
• Distributers
• Agents
• Retailers
These are all elements of the marketing
channel

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“Relationship Marketing” with
Suppliers and Intermediaries
• Relationship marketing is important in managing
the interaction between the firm and its suppliers
and intermediaries.
• It involves the firm applying the marketing policy
to those firms or individuals that it deals with.
• Relationship marketing is based upon the well-
established business principle that cooperation
between businesses should be mutually
beneficial.

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The impact of Wheat prices
handout

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Customers
• Central to any marketing is the customer.
Customers can be classified as:
• Consumers
• Business-to-Business
• International
• The role of marketing involves not just
creating customers but also developing a
relationship with those customers.

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Competitors
• Competition describes the rivalry that
exists between firms in the market.
• All firms have competition
• Competitors may be:
• Direct
• Indirect
• It is important for the firm to research who
or what does the consumer perceive to be
a competitor, and in what circumstances?

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Levels of Competition

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Publics
• Any group that has an actual or potential interest
in or impact on an organization’s ability to achieve
its objectives
– Financial publics
– Media publics
– Government publics
– Citizen-action publics
– Local publics
– General public
– Internal publics

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The Macro-Environment
• The macro-environment refers to a broad range of
social forces, external to the firm, that influences it.
These forces include:
1. Demographic
2. Economic
3. Technological
4. Political and Regulatory
5. Socio-cultural
6. Natural
7. Consumerism

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Demographics
Implications for Marketers
• A declining birth rate.
• Increased life expectancy
• By 2035, 1 in 4 people in Ireland will be
over 65 yrs

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The Economic Environment
Important economic indicators include:
1. Inflation rising prices
2. Interest Rates
3. Taxes – property tax
4. Disposable income
5. Etc

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The Economic Environment
Implications for Marketers
• Economic downturn:
• Main affected areas: Building sector, Car trade,
private education, private health cover
- Also less disposable income…..
Catering sector, grooming sector, leisure
interests/hobbies, clothing sector, car trade
• At present there is an increase demand for: Third
level education and ………
- Cashflow problems for businesses (Stock issues)

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The Technological Environment
• Technology can be a source of competitive
advantage for firms that use it to introduce or
develop superior products or services.
• Technology can also render existing products and
processes obsolete and the unprepared firm can be
left behind.
• Society is experiencing a faster rate of
technological change than ever before.

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• The internet
• Interactive television
• Mobile phones
• ‘Active’ billboards
• Microchips embedded in products

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The Technological Environment
Implications for Marketers
• Technology is a source of competitive advantage
for a firm.
• It leads to the development of new products and
services and new processes.
• It aids marketers in their practice.

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The Political and Regulatory
Environment
• Political stability is important for business.
• Ireland at present and very recently has an
unstable stable political environment -
Investment….. job creation…..
• Of most relevance to business are the laws enacted
by the Oireachtas and the various government
agencies involved in the support and development
of business and enterprise.

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Irish Laws of Relevance to Business
• The Companies Acts (1963 and 1986)
• The Sale of Goods and Supply of Services
Act (1980)
• The Consumer Information Act (1978)
• The Competition Act (1991)

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The Political and Regulatory
Environment Implications
for Marketers
• The political environment can be a source of
rules and regulations that can have an impact on
the marketer or on the way in which business is
done.
• A central issue for firms is their ability to adapt to
changes in the political environment… eg:
– Consumer information, Environmental issues, Health &
Safety, Hygiene regulations, Employment laws,
Minimum wage

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The Socio-Cultural Environment
• The socio-cultural environment involves
forces that affect our values, beliefs, perceptions
and behaviour.
Culture is a broad phenomenon and comprises of
different elements including:
1. Material Culture…
2. Social Institutions
3. Religion, decline in organised religion
4. Human Culture
5. Language, growing language groups in ireland

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Socio-Cultural Changes
• Declining birth rates
• Increased life expectancy
• Increase in number of working women
• Postponement of marriage age
• Increased divorce rate
• Increased single parent families
• More people taking early retirement
• Culturally diverse populations
• Increased level of education/More Informed consumers
• Increasing concern for health
• Increasing concern for the natural environment

28. © Donal Rogan
The Socio-Cultural Environment
Implications for Marketers
• The rate of cultural change can be quite slow,
however, it is an important phenomenon creating
both opportunities and threats for firms.
• Cultural change may mean that marketers have to
re-evaluate the ways in which they segment the
market and the development of positioning
strategy.

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For Example: More working women –
Implications:
• Home shopping
• Childcare
• Convenience foods
• Labour saving devices
• Clothing
• Financial Services
• Leisure interests (Hobbies, holidays, eating out)
• Treating oneself
• Shopping seen as a new leisure activity – retail
therapy

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The educated/informed consumer
• In 1979 when Margaret Thatcher became
the first woman to become prime minister
of Britain over 60% of women in the Uk
had finished education by the age of 15 and
less than 10% had benefited from higher
education………..
• More educated workforce
• More white collared workforce

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Marketing implications:
• As Education is a good benchmark to measure
consumers ‘Sophistication
• Increase awareness of consumer rights
• Growth in consumer activist groups
• Media effectiveness un disseminating consumer
right information
• Consumers who are aware of their rights and
complain will be more satisfied than those who
do not complain…’Zone of tolerance’

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The Natural Environment
• In recent years there had been an increased
awareness of the natural environment and its
protection.
• The European Union had introduced a number of
initiatives and directives aimed at protecting the
natural environment.
• In addition to product development and support
for environmental issues firms have devoted
resources to improve their environmental image.

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The Natural Environment
Implications for Marketers
• Firms must respond to environmental regulations and
controls.
• There are potentially more advantages for a marketer who
takes the initiative rather than simply reacts.
• The basic requirement for marketers in relation to
environmental marketing is a communication regime of
integrity and clear-sightedness, both within companies and
between companies and their relevant publics.

34. © Donal Rogan
Consumerism
• Consumerism is a force in the macro-
environment designed to aid and protect the
consumer by exerting moral, economic, political
and legal pressures on business.
• Consumerism grew as a force because of many
cases of fraud, deceit or misleading claims about
products and services.

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The Goals of Consumerism
• Helping buyers cope with complexity
• Protection from fraud
• Representing consumer interests
• Protecting consumer rights
• Protecting the less well off

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Reasons for the Growth of
Consumerism
• The consumer movement has grown in line with the
growth in the availability of products on the market.
Consumers have become more concerned about:
1. Deceptive advertising and packaging
2. The exploitation of children
3. Slow or inadequate servicing
4. Misleading guarantees or warrantees
5. Poor product quality
6. Badly trained staff
7. The attitude of customer service staff

37. © Donal Rogan
Consumerism
Implications for Marketers
• The consumer movement represents a threat to
firms that do not listen to their customers.
• The consumer movement can be a source of
information and ideas for marketers.
• Marketers need to be familiar with factors within
the regulatory environment.

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Environmental Trends in the
Years Ahead
• Globalisation
• World Peace and Stability
• Demographic shifts
• Environmentalism
• Changing technologies
• South-east Asia as an economic force
• The European Single Market
• China as an economic force!!!!!