The Marketing Environment

1. Armstrong, Kotler & da Silva Marketing : An Introduction An Asian Perspective 3 The Marketing Environment

2. Marketing Environment • The marketing environment consists of actors and forces outside the organization that affect management’s ability to build and maintain relationships with target customers. • Environment offers both opportunities and threats. • Marketing intelligence and research used to collect information about the environment.

3. Marketing Environment • Includes: • Microenvironment: actors close to the company that affect its ability to serve its customers. • Macroenvironment: larger societal forces that affect the microenvironment. • Considered to be beyond the control of the organization.

4. Actors in the Microenvironment Figure 3.3

5. The Company’s Microenvironment • The Company • Areas inside a company. • Affects the marketing department’s planning strategies. • All departments must “think consumer” and work together to provide superior customer value and satisfaction.

6. The Internal Environment Figure 3.4

7. The Company’s Microenvironment • Suppliers: • Provide resources needed to produce goods and services. • Important link in the “value delivery system.” • Most marketers treat suppliers like partners.

8. The Company’s Microenvironment • Marketing Intermediaries: • Help the company to promote, sell, and distribute its goods to final buyers • Resellers • Physical distribution firms • Marketing services agencies • Financial intermediaries

9. Resellers • Resellers are distribution channel firms that help the company to find its customers or make sales to them. • These include wholesalers and retailers who buy and resell merchandise. • Big C, Carrefour, Tesco Lotus etc. are examples of big retailers.

10. Partnering With Intermediaries Coca-Cola provides McDonalds with much more than just soft drinks. It also pledges powerful marketing support.

11. Physical distribution firms • Physical distribution firms help the company to stock and move goods from their points of origin to their destinations.

12. Marketing Service Agencies Acorn Marketing and Research Consultants Co. Ltd Research Dynamics Co. Ltd. TNS Research International

13. Financial intermediaries • Financial intermediaries include banks, credit companies, insurance companies and other businesses that help the finance transactions or insure against risks associated with the buying and selling goods

14. The Company’s Microenvironment • Customers: • Five types of markets that purchase a company’s goods and services • Consumer markets • Business markets • Reseller markets • Government markets • International markets

15. Consumer markets • Consumer market consists of individuals and households that buy goods and services for personal consumption.

16. Business markets • Business markets buy goods and services for further processing or for use in their production process.

17. Reseller markets • Reseller markets buy goods and services to resell at a profit. • Retailers • Wholesalers

18. Government markets • Government markets are made up of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them.

19. International markets • International market consists of buyers in other countries including consumers, producers, resellers, and governments.

21. The Company’s Microenvironment • Competitors: • Those who serve a target market with products and services that are viewed by consumers as being reasonable substitutes • Company must gain strategic advantage against these organizations • Competitor analysis is an important aspect of developing effective marketing strategies

22. Who will win?

23. The Competitive “Radar Screen” Figure 3.7

24. Types of Publics • Publics: • Group that has an interest in or impact on an organization's ability to achieve its objectives

25. Financial Public These influence the company’s ability to obtain funds. Banks, investment houses and stockholders are the major financial publics.

26. Media Public These carry news, features etc. They include newspapers, magazines, and radio and television stations.

27. Government public Management must take government developments into account. Management must always follows the government rules and regulations when doing businesses mainly on issues of product safety, truth in advertising and other matters.

28. Citizen action Public

29. Local/General public

30. Internal Public These include workers, managers, volunteers, and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. When employees feel good about their company, this positive attitude spills over to the external publics.

31. The Macro environment • The company and all of the other actors operate in a larger macroenvironment of forces that shape opportunities and pose threats to the company.

32. The Company’s Macroenvironment Figure 3.8

33. The Company’s Macroenvironment • Demographic: • The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. • Marketers track changing age and family structures, geographic population shifts, educational characteristics, and population diversity.

34. Changing Demographic Trends in Asia create new Marketing Opportunities

35. Changes in Income 1980’s – consumption frenzy 1990’s – “squeezed consumer” 2000’s – value marketing Income Distribution Upper class Middle class Working class Underclass Economic Environment Consists of factors that affect consumer purchasing power and spending patterns.

36. Rising Consumer Affluence in Asia

37. Natural Environment • Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.

38. Factors Impacting the Natural Environment Shortages of Raw Materials Increased Pollution Increased Government Intervention Environmentally Sustainable Strategies

39. Environmental Responsibility McDonald’s has made a substantial commitment to the so-called “green movement.”

40. Technological Environment • Most dramatic force now shaping our destiny.

41. Technological Environment • Changes rapidly. • Creates new markets and opportunities. • Challenge is to make practical, affordable products.

42. Technology Gaps Between Asian Markets for Consumer Electronic Products Figure 3.9

43. Political Environment Includes Laws, Government Agencies, and Pressure Groups that Influence or Limit Various Organizations and Individuals In a Given Society. Increasing Legislation Changing Government Agency Enforcement Increased Emphasis on Ethics & Socially Responsible Actions Cause-Related Marketing

44. Cultural Environment • The institutions and other forces that affect a society’s basic values, perceptions, preference, and behaviors. • Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government. • Secondary beliefs and values are more open to change.

45. Thai culture

46. Schools

47. Themselves Others Society’s Major Cultural Views Are Expressed in People’s Views of: Organizations Society Nature The Universe Cultural Environment

48. Linkage between Environmental Analysis and Marketing Figure 3.10

49. Linking of Macro and Micro Environmental Forces Figure 3.12

50. Rest Stop: Reviewing the Concepts • Describe the environmental forces that affect the company’s ability to serve its customers. • Explain how changes in the demographic and economic environments affect marketing decisions. • Identify the major trends in the firm’s natural and technological environments. • Explain the key changes in the political and cultural environments. • Discuss how companies can react to the marketing environment.