MCD2050

MARKETING 1
Lecture 2 – The Marketing Environment
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Icons

Pages
6 - 10

Prescribed
Pages
6 - 10

Recommended Class Activity – Case Study - Watch the

!
Important
reading. Refer reading. Refer Answer the Real world video via the point to
to textbook to textbook question example link remember

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Overview

 The controllable elements of the organisation’s internal

environment
 The importance of the elements of the marketing
organisation’s micro-environment
 The broad concept of the organisation’s macro-environment

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The Marketing Environment

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21

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The Marketing Environment

 The marketing environment refers to all of the internal and

external forces that affect a marketer’s ability to create,
communicate, deliver and exchange offerings of value.
 Micro‐environmental factors affect all parties in the industry,
including suppliers, distributors, customers and competitors.
 Macro‐environmental factors include political forces,
economic forces, sociocultural forces, technological forces,
environmental forces and legal forces. Internal
Environment

Marketing Micro
Environment Environment

Macro
Environment

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MCD2050

The Marketing Environment

The Internal Environment
The Internal Environment

 The internal environment considers the different parts within a

company that works together in order to create, communicate
and deliver value to customers.
 The different parts consist of the teams, groups, departments
and processes within the organisation that must work together
effectively.
 The internal environment is generally believed to be Internal
Environment
controllable by marketers. Marketing Micro
Environment Environment

Macro
Environment
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An Overview of the internal environment

The structure of any organisation can be summarised in an ‘organisation chart’.

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The Internal Environment – Company Structure

 Senior Management: Senior management sets the

organisation’s mission, objectives, broad strategies and
policies.

 Middle Management: Responsible for the performance of

departments or specific regions. They need to ensure that the
objectives of the department or regions aligns with the
broader company objectives.

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The Internal Environment – Company Structure

 Functional Departments: The specific teams based on

organisational functions such as:
– Marketing
– Sales
– R&D
– Manufacturing
– Finance
– Human Resources
 Functional Department managers are responsible for the
performance of their own specific department.
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The Internal Environment – Company Structure

 Employees: The workforce that carries out tasks that meet

departmental objectives. Employees are the ‘face’ of the
organisation and their attitudes, behaviour and performance
can significantly impact the company.

 External Vendors: The other organisations that the company

outsources for services and procedural support i.e. auditors,
call centres, legal services.

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The Internal Environment – Marketer’s Responsibility

 Marketing managers must make decisions within the plans made by senior
management.
 In designing marketing plans, marketing management takes other
organisation departments into account such as: top management, finance,
R&D and manufacturing.
 Organisations that adopt the marketing concept must ‘think customer,’ and
work together to exceed customers’ expectations.
 All parts of the organisation must work together to achieve the greatest
benefit from the marketing concept.

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Group Activity 1: Tesla
As the marketing team for
Tesla Motors, discuss who
you would have to work
with in the internal
environment, in order to
bring this product to the
market.

Source: https://player.vimeo.com/video/192179726

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Group Activity 1: Tesla
As the marketing team for
Tesla Motors, discuss who
you would have to work
with in the internal
environment, in order to
bring this product to the
market.
Possible departments here
could include:
Manufacturing
Human Resources
R&D
Source: https://player.vimeo.com/video/192179726
Finance
Marketing Communications

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MCD2050
The Marketing Environment
The Micro environment
The Micro environment

 The company’s micro environment consists of:

– Customers and Clients
– Partners
– Competitors

 These micro environmental factors cannot be controlled,

however they can be influenced by the marketer.
Internal Customers &
Environment Clients

Marketing Micro
Partners
Environment Environment

Macro
Competitors
Environment

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The Micro environment: Customers and Clients

The marketing organisation must study its customer markets

closely. The organisation can serve two main types of markets:

1. Business to Consumer Markets

– Serving end consumers locally and internationally
2. Business to Business markets
– Clients and other businesses (i.e. providing offers to
Monash College)
– Reseller markets (i.e. selling products to David Jones)
– Government markets (providing offers to the Department
of Defence)
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Example: Sony

Here’s an example of how Sony may cater to multiple customers

with a single offer:

Consumers: Clients and Businesses Government Customers

For use at home i.e. Monash College

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Group Activity: Identify the customers for the below product

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The Micro environment: Partners

 Partners are other companies that marketers work with in

order to create value for their customers.
 Marketers need to understand their partners work processes
and how the partnership benefits both parties.
 The partners within the micro environment includes:
– Logistics Firms – Retailers
– Financiers – Wholesalers
– Advertising Agencies – Suppliers

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Partners: Logistics Firms
 Help the organisation in the distribution of goods from their point of
origins, to their destinations. They also help with storage and
transport.
 Here’s an example of a logistics firm used by businesses:

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 Example of Logistics Firm

Source: https://youtu.be/EtGf7uwRuD0 24
Partners: Financiers

 The financiers provide the company with financial services

such as banking loans and insurance. This also includes the
institutions that provide electronic payment and processing
systems.

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Partners: Advertising Agencies

 The advertising agencies are trusted by marketers in assisting with

targeting and promoting the company’s offers to the right markets.

 Here’s an example of the kind of support provided by advertising agencies

to McDonald’s:

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An example of what Advertising Agencies do

Source: https://youtu.be/oSd0keSj2W8 27
Partners: Retailers

 Retailers are stores designed to service the end consumer.

 Many retailers sell products that are made by others and can
therefore generally be classified as a type of “reseller”.
 This includes businesses such as:
– Supermarkets
– Convenience Stores
– Boutiques
– Online Shops

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Partners: Wholesalers

 Wholesalers purchase products from the manufacturer in bulk

and generally “resell” these products to the retailers.
 They are an intermediary acting in between the producer and
retailers.

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Partners: Suppliers

 Suppliers provide the necessary resources for organisations to

produce their market offers.
 They can have a negative or positive impact on the
performance of your firm based on:
– The quality of the supply provided
– The quantity of the supply provided
– The timeliness of the supply provided

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The Microenvironment: Competitors

 Every organisation faces a wide range of competitors.

The marketing concept states that, to be successful, an
organisation must provide greater customer value and
satisfaction than its competitors.
 Organisations are facing competition from international
competitors as well as opportunities in international markets.
 Marketers exist in competitive markets and there are many
different types of market competition.

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Types of competition and markets

 Pure Competition: many buyers and sellers, uniform offer

 Monopolistic Competition: many buyer and sellers,
different offer
 Oligopoly: many buyers and few sellers, product can be
uniform or different
 Monopoly: many buyers, one seller.

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MCD2050
The Marketing Environment
The Macro environment
The Macro environment

 “The organisation itself and all of the forces within the micro
environment operate within a larger environment known as
the macro environment” (Elliott et. al, 2018).
 There are six (6) macro environmental factors affecting the
organisation and industry: Political
Internal
1. Political 4. Technological Environment
Economic
Marketing Micro
2. Economic 5. Environmental Environment Environment
Sociocultural
Macro
3. Sociocultural 6. Legal Environment
Technological

Environmental

Legal

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! Macro Environmental Analysis: PESTEL Analysis
It is important to note that when
discussing each of the macro
environmental factors, we must
discuss the key considerations within
each factor and the potential impact
or affect of these considerations and
factors on an organisation or industry.

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Political Forces

 The political environment measures the impact of politics on

marketing. The major considerations include:

The stability of the political environment

The influence of government policies

Government trade agreements

Taxation and Government Rebate Policies

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The impact of the Political Force

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Source: https://youtu.be/VWDlNsOxkFg
Economic Forces

 The economic environment

measures the affects of the Interest rates, economic growth (GDP)
changing economy on both and consumer confidence

the organisations and the Income levels, savings, credit and

spending levels
customers.
The level of inflation, employment and
 The changes within this unemployment

environment can have

Exchange rates and balance of trade
significant impact on company
and customer buying power
and spending patterns.

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Example of Economy

Source: https://youtu.be/9nrZwjcjS1A 39
Sociocultural Forces

 The sociocultural environment encompasses a range of

demographic and cultural factors. It is important that
marketers understand and adapt to the changing demography
and culture within the marketplace.
Religion, culture, subculture, values,
attitudes and beliefs

Population trends: age, family structure,

marriage and divorce trends, places lived,
ethnicity and health

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Example: Culture, Values, Attitudes and Beliefs

 Changes in culture, values,

attitudes and beliefs can have
significant impacts on industries.
 The rise of veganism in Australia,
making it the third fastest growing
vegan market in the world
(Cormack, 2016), is a direct result
of shifts in secondary culture –
resulting in changes in attitudes
and beliefs regarding the use of
meat in food.

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Example: Population Trends

 The changing demographics

(population) in relation to
family size, age structure,
ethnicity and places lived has
an impact on the types of
products sold by organisations.

Source: https://mccrindle.com.au/wp-
content/uploads/Australia-then-and-now-1984-
2014_Infographic_McCrindle.pdf

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Here’s an example of a company that’s adapting:

Source: https://youtu.be/4_WEu2-FOnE 43
Technological Force

 The technological environment is perhaps the most dramatic force now

shaping our future. Technology has released medical wonders and
advanced communication; however, it also leads to destruction and ethical
dilemmas. New technologies replace older technologies, creating new
markets and new opportunities.

Cheaper offerings at a higher quality

Technological advancements and

innovations

Improving distribution and

communication through technology.

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Example: PKvitality’s K’Watch – released 2022
PKvitality, focusing on
health and sport
biowearables, is
developing K'Watch
Glucose, the first
Continuous Glucose
Monitor (CGM)
in the form of a
smartwatch,
designed to change
the daily lives of
millions of diabetic
patients.

Source: https://youtu.be/4zz6rDdbdZY 45
Environmental Forces

 The environmental forces consider the changing natural

environment, particularly in relation to changing
ecosystems, weather and climate. This force may
significantly impact supply of raw materials and
resources.

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Example of a company adapting to environmental forces

Source: https://youtu.be/-YFaAG6gE58 47
Legal Forces

 The Legal forces specifically consider the impact of laws and

regulations on business operations.
 Companies must operate within the law (often referred to as
Acts). Regulatory bodies exist to ensure that companies
comply with government regulations.

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Example of the potential impact of legal forces:

Source: https://youtu.be/IssfoWPWM-o 49
Responding to the Marketing Environment

‘There are three kinds of

companies: those who
make things happen,
those who watch things
happen, and those who
wonder what’s
happened.’

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Marketing Environment

Internal Customers &

Clients
Environment
Partners

Competitors
Political
Marketing Micro
Environment Environment Economic

Sociocultural

Technological
Macro
Environment Environmental

Legal

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Summary

 Internal Environment consists of the departments,

managers and teams within the organisation.
 Micro-environment consists of the actors close to the
organisation that affect its ability to serve its customers
 Macro-environment consists of the larger societal forces
that affect the whole micro-environment

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Online Weekly Quiz

 Reminder to complete the online weekly quiz on Moodle.

 Quiz will close 5pm Saturday

 The test is open book – you can refer to your lecture notes and
textbook(s)

 The test is timed – 60 minutes to complete from when you start it.

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