l02 global marketing environment

8/8/2019 L02 Global Marketing Environment

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Global MarketingEnvironment

Session II Global Marketing


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Marketing Environment: An Overview

Consists of all factors external to an organization

Affect the organizations marketing activities.

Largely uncontrollable, although marketers can

influence some of them.For example,

cannot control population trends, economic

conditions, or laws once passed,

but it can have some influence on political processes,technological developments, and competitive

situations.


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Why Study It?

identifying the important elements of themarketing environment for their

organization

assessing current and likely futurerelationships between these factors

developing effective strategies for a

changing environment Has become more complex as it change

rapidly and unpredictably


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Why Study It?

creates opportunities or threats in two basicways changes in the marketing environment can directly

affect specific markets (can make markets larger orsmaller or create new)

changes in the marketing environment can directlyinfluence specific marketing activities

Bottomline:

marketers need to understand the marketingenvironment to be able to make good decisions


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Identifying Market Opportunities and Threats

use environmental scanning

to identify important trends, and

determine if they represent present or future

market opportunities or threats

consists ofidentifying relevant factors and

assessing their potential impacton the

organizations markets and marketing activities

simpler to say than do


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Environmental Scanning Approach


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How to analyze market environment?

One way to deal with a volatile marketingenvironment is to use the seven key marketing

perspectives

These perspectives are at the interface between

the controllable marketing circle and theuncontrollable marketing environment

The perspectives work both ways:

they guide both a marketers outwardevaluation of the environment, and

inward response to the environment through

marketing decisions


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Marketing Environment


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Social Environment

Includes all factors and trends related togroups of people, including their number,

characteristics, behavior, and growth

projections 2 important components of the social

environment:

The demographic environment, and The cultural environment


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Demographic Environment

refers to the size, distribution, and growth rate ofgroups of people with different characteristics.

people from different countries, cultures, age

groups, or household arrangement often exhibit

different purchasing behaviors

Global perspective requires that marketers be

familiar with important demographic trends

around the world


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Global population size and growth one indication of potential market opportunities.

tremendous disparity in population size andgrowth rates across countries

population statistics make it clear that marketerscannot rely on population growth in developedcountries alone for general increases in marketsize

largest growth markets, measured by populationsize, are in the developing countries


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The most populous countries


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Global Demographic Characteristics andTrends

Most marketers target subgroups within these

large populations. Trends in population subgroups are therefore

typically the most useful to marketers

growth of the urban population

aging of the population nature of household units


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Cultural Environment

refers to factors and trends related to howpeople live and behave.

Cultural factors, including the values,

ideas, attitudes, beliefs, and activities ofspecific population subgroups, greatly

affect consumers purchasing behavior.

Thus, marketers must understandimportant cultural characteristics and

trends in different markets


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Cultural Diversity Different cultural groups retain many of their

habits, attitudes, interests, and behaviors even

though they may migrate to other parts of the

world Its not a melting pot but a mosaic

Successful marketers understand the delicate

balance between important cultural differences

and similarities that unite different cultures


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Changing Roles As more women enter the workforce and

household compositions change, typical

household roles are altered

Emphasis on health and fitness

pursuit of a healthier lifestyle includes eating

more nutritious foods, exercising regularly,

participating in various sports activities, andfocusing on wellness


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Desire for convenience Changes in household composition and a

general shortage of time underlie an

increased desire for convenience

Consumerism

is the movement to establish and protect the

rights of buyers

need to adopt an ethics perspective will gain

more prominence

Increased environmentalism


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Economic Environment

includes factors and trends related to incomelevels and the production of goods and services

Economic trends affect the purchasing power of

markets

Economy is strong enough to provide sufficient

purchasing power for consumers to satisfy their

wants and needs

Economic trends in different parts of the worldcan affect marketing activities in other parts of

the world


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Economic Environment

Some of the economic indicators whichare of importance to global marketers

GDP

Economic activity per person Economic growth

Innovation in economy


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Politico-Legal Environment

encompasses factors and trends related togovernmental activities and specific laws and

regulations that affect marketing practice

closely tied to the social and economic

environments

important for marketers to understand specific

political processes, laws, and regulations, as

well as important trends in each of these areas


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Global Political Trends

international political events greatly affectmarketing activities

One significant trend is a move fromgovernment-dominated economies and socialist

political systems toward free market economies Another is movement toward free trade and

away from protectionism

Free trade trend goes beyond trading blocs and

encompasses a globalperspective Use of embargoes or sanctions by the UN or

individual governments to limit trade to specificcountries


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Legislation

must deal with laws at the international,federal, state, and local levels

Typically fall into two categories:

Those promoting competition among firms,and

Those protecting consumers and society


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Regulation and Regulatory Agencies

Most legislations are enforced throughregulations developed by a variety of agencies,

and marketers must often work with them

Often these regulations are not same at all

levels of governance

As more firms participate in the global

marketplace, the need for international

regulations is emerging. One example is the International Standards

Organizations 25-page set of quality standards

called ISO 9000.


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Technological Environment

includes factors and trends related toinnovations that affect the development of newproducts or the marketing process

Rapid technological advances make it

imperative that marketers take a technologyperspective

can provide opportunities for

new-product development,

affect how marketing activities are performed,or

both


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Competitive Environment

consists of all the organizations thatattempt to serve similar customers

Two types of competitors are of major

concern:brand competitors and

product competitors


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Institutional Environment

consists of all the organizations involved inmarketing products and services

include marketing research firms, advertisingagencies, wholesalers, retailers, suppliers, andcustomers

Trends in the institutional environment includereengineering, restructuring, the virtualcorporation, horizontal organizations, andempowerment

The potential marketing implications oforganizational changes are illustrated by thetotal quality management (TQM) and downsizingtrends


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Assignment 1

Scan through newspapers, TV programs,journals or any other literature, and find

out atleast one event/items related to each

category of marketing environment and itsimplications

l02 global marketing environment

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