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MKC1200 (16)
Chapter 5

MKC1200 - Chapter 5 (week 2).docx

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Monash University
Dr Maya Mandery

THE GLOBAL MARKETING ENVIRONMENT MARKEING ENVIRONMENT – It is the total of all actors and forces not under the control of marketing but that can affect the marketing management’s ability to manage success transactions with the customers. IMPORTANCE OF MARKETING ENVIRONMENT 1) The marketing environment is rapidly changing. Eg. Global financial crisis, terrorist acts 2) The marketing environment has a potential of benefits like investment opportunities and technology innovation 3) The marketing environment can be unpredictable like changing exchange rates and death of CEO 4) The marketing environment brings significant changes to the organisation’s strategy, operations positioning and other factors. MICROENVIRONMENT – This refers to all closely related forces that can affect the company’s ability to satisfy the needs of the customers 1) COMPANY – The Company is made up of many different departments that can affect marketing management’s ability to satisfy the needs of the customers. For example, the marketing department of Kmart cannot promise low prices without ensuring that the operations department can produce at low costs. The marketing department needs to develop plans that are in accordance with the strategies of top management. 2) SUPPLIERS – The suppliers play a huge role in ensuring that the marketers are able to satisfy the needs of the customers and hence it is vital that the company maintain good relations with them. If the suppliers delay the supply of materials or provide low quality materials or go on strike, then the organisation cannot satisfy the needs of the customers. 3) MARKETING INTERMEDIARIES – The marketing intermediaries refer to all the firms that help the company promote, sell or distribute the products to the final customers. a) RESELLERS – They are the firms that help provide the product to a wider customer base by buying the product from the company and reselling it. b) PHYSICAL DISTRIBUTION FIRMS – They are the firms that help to store and distribute the products from the place of origin to the place of sale. c) FINANCIAL INTERMEDIARIES – Banks, credit companies and insurance companies that help the organisation finance transactions and insurance against risks in the buying and selling of products. d) MARKETING SERVICES AGENCIES – They include marketing research firms, advertising firms, media firms and marketing consultancy firms that help the company to target and promote the product to the customers. 4) COMPETITORS - They are the firms selling similar goods to the same target market. These firms provide substitute goods in the market. Woolworths and Aldi are competitors for Coles and Coles need to provide better product to the target market at better prices to prosper. The aim is to provide a product that provides greater customer value and satisfaction than its competitors. 5) CUSTOMERS – They are the most important force in the microenvironment and the focus of all other forces is to satisfy the needs of the customers. Consumer markets sell the products to the final consumers. Business markets purchase the products for reuse or further transformation in the production process. Government markets purchase the products to provide public services or transfer the goods to those who are in need. Reseller markets consist of marketing intermediaries that purchase the product from the organisation and sell it to the customers. International market consists of people from all over the world in the consumer, business and government market. 6) PUBLIC –they refer to any group that has an actual or potential interest in or impact on the organisation’s ability to achieve its objectives. a) Financial public - these are the firms that help the organisation to obtain funds. They include banks, credit companies, and insurance companies. b) Media public – This group carries news, features and editorial opinions about a company’s product. c) Government public – the group that can impose laws and regulations against the produce of a certain product or create a few restrictions. d) Citizen-action public – they include customer groups, environmental groups and minority groups that are capable of causing trouble if mistreated. e) Local publics – they include neighbourhood residents and community organisations belonging in an area where the organisation resides. f) General public – they refer to the entire customer base of an organisation and it is important to know their reaction when it comes to products and services. g) Internal publics – they refer to the workers, managers and volunteers of an organisation and they can influence the way and the type of product that the organisation sells. MACROENVIRONMENT – They refer to large societal forces that can affect the marketing management’s ability to satisfy the needs of the customers. They affect the entire microenvironment. 1) THE DEMOGRAPHIC ENVIRONMENT – the study of human populations in terms of its size, diversity, age, gender, and other statistics. a) Changing age structure – the people are generally divided into three age structures. The baby boomers that were born just after the Second World War. They are currently in their late fifties and sixties. They are the target of most marketers. The next is the Generation X. they were born in the late 1960s and 1970s. They grew up in the age of global recession and corporate downsizing and hence have a more cautious financial outlook. The last is the Generation Y. They are the more technologically oriented. They grew up with the internet and social networking sites that changing communication in the world today. The number of older people aged 65 and above is steadily increasing as Australian women are having fewer kids and their proportion in the population has exceeded the under 15 category. b) Changing structure of family – the structure of the traditional family is changing. The idea of a two kid, two car families is gone and the number of families has reduced. The age of men and women’s first marriage has increased to be close to 30. The number of single people and divorces has increased and housing has changed to cater to the new needs. Women have started working and more men are staying at home to tend for their children as was in previous times. Marketers are now focusing on men when advertising for household needs and food. c) Geographic shifts of the population – the number of people living in urban areas has increased tremendously. At one point, 64% of the Australians lived in rural areas and now 65% of the population lives in urban areas and this has increased to a complete 100% in places like Singapore. The people have moved around from the city to the suburbs in the 1960s a
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