Transcript Chapter 3

CHAPTER 3
Scanning the
Marketing
Environment
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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After reading this chapter you
should be able to:
• Understand how environmental scanning provides
information about social, economic, technological,
competitive, and regulatory forces.
• Explain how social forces such as demographics and
culture and economic forces such as macroeconomic
conditions and consumer income affect marketing.
• Describe how technological changes can affect
marketing.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3-2
After reading this chapter you
should be able to:
• Understand the forms of competition that exist in a
market, key components of competition, and the
impact of competition on corporate structures.
• Explain the major legislation that ensures competition
and regulates the elements of the marketing mix.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3-3
Environmental Scanning in the New
Millennium
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The business environment is constantly changing.
What may have been true three years ago is now no
longer certain or even may have disappeared
completely.
Environmental scanning is therefore crucial for any
business.
This is not just in the start up phase, but on-going.
There are five primary environmental influences a
marketer should be concerned about:
1.
2.
3.
4.
5.
Social
Economic
Technological
Competitive
Regulatory
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3-4
Influence of Environmental Factors on
Marketing
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3-5
Social Forces - Demographics
• Social forces include the demographic characteristics
of the population and its values.
• Changes in these forces can have a dramatic impact
on marketing programs.
• Demographics is describing the population according
to characteristics such as age, gender, ethnicity,
income and occupation.
• The Australian population over the last 30 years has
become more ethnically diverse, and is increasingly
living in non-traditional families.
• Australia’s population is now well over 21 million,
increasing from 10 million in only 48 years.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Olay Ad
Which population
group is this
advertiser trying to
reach?
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Social Forces – The Baby Boom, Gen
X, Gen Y and Gen Now
• Apart from changing
demographics,
generational change
can also affect
marketers.
• Marketers have
defined generations
into different
categories according
to the era they were
born into.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3-8
Social Forces - Culture
• Culture can also be a powerful social force on
marketing programs.
• Culture includes the set of values, ideas and attitudes
that are learned and shared among members of a
group.
• Culture in Australia is always changing, and the
Australian culture of BBQ’s, meat pies and
kangaroo’s is a thing of the past.
• Australia is one of the most competitive markets in
the world and Australians always rank as amongst
the hardest working employees.
• Australia is still to many, the land of the lucky country.
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3-9
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Hiving
• Hiving refers to social activities that bring people into
contact with each other around a central home base.
• As an example of this in practice, we are now likely to
spend thousands of dollars on a home theatre system
instead of going to the local cinema.
• Sales of associated products, such as widescreen TV’s,
DVD’s, DVD Recorders and even cinema style recliners
have boomed in recent times.
• We play computer games online against millions of other
competitors, and spend hours every month on Facebook
or MySpace.
• Hiving has definitely changed many marketing programs
for products associated with this social change.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 10
Climate Change
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Climate change is increasingly
having an impact on marketing
programs.
All around the world companies
are changing their marketing
programs to be more
environmentally friendly.
Many companies now sell
‘green’ products, such as hybrid
cars or green power, or allow
consumers the choice to carbon
offset.
Global warming has also seen a
boom in sales of products such
as air conditioning.
Source:http://www.actewagl.com.au/greenchoic
e/, viewed January 28 2008
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 11
Concept Check
1. Explain the term hiving.
2. What are the marketing implications of racial and ethnic
diversity in Australia and New Zealand?
3. What is global warming? Give an example of how it may
affect the marketing of a product?
1. Hiving refers to social activities that bring people into
contact with each other around a central home base.
2. The marketing implications of racial and ethnic diversity
has been a change in the way some products, such as
food, are marketed.
3. Global warming is an increase in temperatures around the
world. Marketing of cars now focuses on fuel efficiency
and recycling, and less on engine size and power as in the
past.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 12
Economic Forces
• Economic forces pertains to the income,
expenditures and resources that affect the cost of
running a business or household.
• Key economic indicators marketers consider are
disposable income, or how much money is left to
spend after taxes, along with discretionary income.
• Discretionary income is the money that remains after
paying for taxes and the necessities.
• Marketers also consider the impact of inflation,
interest rates and consumer confidence.
• It is also worth knowing what products prices are
rising or falling faster than inflation.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 13
Reserve Bank of Australia
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•
The Reserve Bank is Australia’s
central bank.
It is an important in the fiscal
management of the Australian
economy through its power to
raise or lower interest rates.
It’s website has lots of useful
resources and is well worth a
visit.
www.rba.gov.au
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
Technological Forces
• Everyone in this room uses the internet every day.
That alone says how powerful the impact of
technological forces are in our society and on
consumers.
• However, it is not just the internet that has changed
our way of doing business.
• Electronic commerce also means computers now
control nearly every aspect of purchasing and
logistics in every major company in Australia.
• Technology also depreciates quickly due to the rapid
degree of change in these products. DVD’s have
quickly killed the VCR. CD’s are dying because of
MP3’s.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Technology’s Impact on Customer
Value
• This rapid change in technology and technology
related products has also impacted upon customer
value.
• When DVD recorders were first introduced into
Australia in 2001 their price was $3000. Now you can
get one for below $500.
• DVD’s themselves have dropped in price from $30 for
one disc in 2001 to 50c now.
• Marketers need to be aware of how technology can
impact upon current and future customers
perspective of value of their product.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 16
Electronic Business Technologies and
the Internet
• As we discussed earlier everyone uses the internet.
• The internet has made the modern consumer the
most powerful and knowledgeable consumer ever.
• Thanks to Google we can find out anything and
everything we want to know about a product we want.
• Companies also use intranets for internal marketing
activities.
• Extranets have been set up between some
companies as this speeds up purchasing and
shipping of products.
• Extranets are used extensively in the FMCG sector.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 17
Woolworths Extranets
• Woolworths uses
extranets with several
large suppliers to
ensure that it’s shelves
are always stocked with
the products you want
when you want them.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 18
Competitive Forces
•
•
Competition in an environmental scan refers to the
alternative firms that could provide a product to
satisfy a specific market’s needs.
The four basic types of competition that a marketer
will come across are:
1. Pure competition
2. Monopolistic competition
3. Oligopoly
4. Monopoly
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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3 - 19
Regulatory Forces
• All business decisions are influenced either directly or indirectly by
regulation.
• Regulation is the restrictions governments place on business with
regard to its activities.
• In Australia there are two major pieces of legislation that impact
upon marketers: the Trade Practices Act 1974 (Cth) and state based
Fair Trading Acts.
• The Trade Practices Act is administered by the Australian
Competition and Consumer Commission (ACCC) and by Fair
Trading departments at a state level.
• These acts are constantly changing so all marketers need to keep
up to date with consumer legislation at all times.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 20
Anti-Competitive Practices
• Part IV of the Trade Practices Act deals with anti-competitive
conduct.
• This part is also constantly undergoing change so please check
the ACCC website or the Act itself to ensure that you know the
current law.
• Some of the areas that are dealt with by Part IV include:
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Market Sharing
Misuse of Market Power
Exclusive Dealing
Price Discrimination
Predatory Pricing
Price Fixing
Resale Price Maintenance
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 21
ACCC
• The ACCC website
(www.accc.gov.au) provides
excellent consumer and
business advice across
many industries.
• It is worth paying a visit too
and educating yourself about
your rights as a consumer,
including if you can take
back that dress that isn’t the
right colour! Oooops!
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 22
Australian Consumers Association
• The Australian Consumers
Association is Australia’s
largest consumer rights
organisation.
• They have a large influence
on government regulations in
the area of consumer affairs.
• A visit to their website or
reading their magazine is
always useful for any
consumer.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 23
Concept Check
1. What is the difference between a consumer’s
disposable and discretionary income?
1. Disposable income is the money left after paying
taxes for food, clothing, and shelter. Discretionary
income is the money that remains after paying taxes
for necessities.
2. In pure competition there are a ______ number of
sellers.
2. large
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 24
Concept Check
1. What is the difference between a consumer’s
disposable and discretionary income?
A. Disposable income is the money left after paying
taxes for food, clothing, and shelter. Discretionary
income is the money that remains after paying taxes
for necessities.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 25
Concept Check
2. In pure competition there are a ______ number of
sellers
large
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 26
Concept Check
3. What is a network organisation?
A: An organisation that uses the Web as a management
tool, giving everyone in the organisation the ability to
access and process information at any time and from
any location.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
3 - 27
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