The Marketing Environment

Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva 3-1

Marketing : An IntroductionAn Asian Perspective

Armstrong, Kotler & da Silva

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.

• 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.

Marketing Environment

Actors in the Microenvironment

Figure 3.3

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.

The Internal EnvironmentFigure 3.4

• Suppliers: – Provide resources

needed to produce goods and services.

– Important link in the “value delivery system.”

– Most marketers treat suppliers like partners.

• Marketing Intermediaries: – Help the company to promote, sell, and

distribute its goods to final buyers• Resellers• Physical distribution firms• Marketing services agencies• Financial intermediaries

Marketing : An IntroductionAn Asian Perspective© Armstrong, Kotler & da Silva

• 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.

Resellers

Partnering With Intermediaries

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

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

Physical distribution firms

Marketing Service Agencies

Acorn Marketing and Research Consultants Co. Ltd

Research Dynamics Co. Ltd.

TNS Research International

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

• Customers: – Five types of markets that purchase a

company’s goods and services– Consumer markets– Business markets– Reseller markets– Government markets– International markets

Consumer markets

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

Business markets

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

Reseller markets• Reseller markets

buy goods and services to resell at a profit.– Retailers – Wholesalers

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.

International markets

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

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

Who will win?

The Competitive “Radar Screen”

Figure 3.7

Types of PublicsPublics:

Group that has an interest in or impact on an organization's ability to achieve its objectives

Financial Public

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

Media Public

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

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.

Citizen action Public

Local/General public

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.

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.

The Company’s MacroenvironmentFigure 3.8

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.

Changing Demographic Trends in Asia create new Marketing Opportunities

Economic Environment

• Changes in Income– 1980’s –

consumption frenzy

– 1990’s – “squeezed consumer”

– 2000’s – value marketing

• Income Distribution– Upper class– Middle class– Working class– Underclass

Consists of factors that affect consumer purchasing power and spending

patterns.

Rising Consumer Affluence in Asia

Natural Environment

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

Factors Impacting the Natural Environment

Shortages of Raw Materials

Increased Pollution

Increased Government Intervention

Environmentally Sustainable Strategies

Environmental Responsibility

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

Technological Environment

• Most dramatic force now shaping our destiny.

Technological Environment

• Changes rapidly.• Creates new

markets and opportunities.

• Challenge is to make practical, affordable products.

Technology Gaps Between Asian Markets for Consumer Electronic Products

Figure 3.9

Political Environment

Includes Laws, Government Agencies, and Pressure Groups that Influence or Limit Various Organizations and Individuals In a Given Society.

Increasing Legislation

Changing GovernmentAgency Enforcement

Increased Emphasis on Ethics& Socially Responsible Actions

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.

Thai culture

Schools

Themselves

Others

Organizations

Society

Nature

The UniverseCultural Environment

Society’s Major Cultural Views Are

Expressed in People’s Views of:

Linkage between Environmental Analysis and Marketing

Figure 3.10

Linking of Macro and Micro Environmental Forces

Figure 3.12

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.

The Marketing Environment

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