1. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–1 Chapter 2 The Marketing Environment

2. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–2 Our changing world Changing attitudes to – Work. – Leisure. – Lifestyle. New gender and family roles. Communication revolution. Tougher market conditions.

3. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–3 External macro-environment Insert Fig 2.1 p 38

4. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–4 THE SIX INTERRELATED MACRO- ENVIRONMENTAL FORCES Demographics. Economic conditions. Competition. Social and cultural forces. Political and legal forces. Technology.

5. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–5 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 household. – Increasing cultural diversity.

6. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–6 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, 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. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–7 Competition Companies face competition from three main sources: 1Brand—from manufacturers of similar products. 2Substitute products—dissimilar products satisfying the same needs. 3Indirect—other firms trying to win customers’ purchasing power.

8. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–8 Competition 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. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–9 Competition A marketing program is influenced by four types of competitive structures: 1Pure competition. 2Monopolistic competition. 3Oligopoly. 4Monopoly.

10. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–10 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. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–11 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. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–12 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. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–13 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. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–14 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. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–15 Political and legal forces The five categories affecting political–legal influences on marketing 1Monetary and fiscal policies. 2Social legislation and regulations. 3Government relationships with individual industries. 4Legislation specifically related to marketing. 5The provision of information and the purchase of products.

16. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–16 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.

17. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–17 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.

18. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–18 External micro-environment Micro-forces that are external to the firm that is directly involved. – The firm’s market. – Its producer–suppliers. – Its marketing intermediaries.

19. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–19 External micro-environment Insert Fig 2.2 p 51

20. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–20 Suppliers—Organisations that provide the firm with the items it needs to conduct business. Market definition—A place where buyers and sellers meet, products or services are offered for sale, and transfer of ownership occurs. – Demand made by a group of potential buyers for a product or service. Market demand factors: – People or firms with needs and wants. – Their purchasing power. – Their buying behaviour. Suppliers & the firm’s market

21. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–21 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 buyer and sellers. They complete the trade or channels of distribution.

22. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–22 Internal environment The micro-environmental forces within a firm. – The relationship between the different functions in a firm. – The environment and resources within the marketing department.

23. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–23 Internal and non-marketing resources Insert Fig 2.3 p 53

24. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 2–24 The firm’s entire environment and marketing program Insert Fig 2.4 p54