Marketing Environment

• The marketing environment includes external actors and forces that impact marketing management's ability to build and maintain successful relationships with target customers.
• Marketers need to have disciplined methods for marketing research and be able to collect marketing intelligence.

Microenvironment

• This includes actors close to the company, such as the company itself, suppliers, marketing intermediaries, competitors, publics, and customer markets.
• Marketers consider internal company groups like top management, finance, R&D, purchasing, operations, and accounting.
• Marketing managers make decisions based on strategies and plans set by top management.
• Suppliers provide resources needed for the company's production.
• Supply shortages, delays, and labor strikes can decrease sales and damage customer satisfaction.
• Rising supply costs may lead to price increases.
• Marketing intermediaries help promote, sell, and distribute products to the final buyer.
• Examples of marketing intermediaries include resellers (distribution channels), physical distribution firms, marketing service agencies, and financial intermediaries.
• It is important to partner effectively with marketing intermediaries to optimize system performance.
• Marketers need to gain a strategic advantage by positioning their offerings strongly against competitors.
• A public is any group with an actual or potential interest in or impact on the organization's objectives.

Types of Publics

• Financial publics influence the company's ability to obtain funds.
• Media publics carry news, features, and editorial opinions.
• Government publics should consult legal advisors on issues like product safety and advertising truth.
• Citizen-action publics include consumer organizations, environmental groups, and minority groups.
• Local publics consist of local residents and community organizations.
• General publics are the general public's image of the company, and this affects buying behavior.
• Internal publics include workers, managers, volunteers, and the board of directors.
• Customers are the most important actors in the microenvironment.
• Consumer markets consist of individuals and households buying goods and services for personal consumption.
• Business markets buy goods and services for further processing or for use in production.
• Reseller markets buy goods and services to resell at a profit.
• Government markets are government agencies that buy goods and services.
• International markets consist of buyers in other countries.

Macroenvironment

• This consists of larger societal forces affecting the microenvironment, including demographic, economic, natural, technological, political, and cultural forces.

Demographic Environment

• Demography is the study of human populations (size, density, location, age, gender, race, occupation, etc.).
• Changing demographics have major implications for business.
• In 2023, Australia's population was 26.8 million, and New Zealand's was 5.2 million.
• An important demographic trend is the aging population.
• Baby Boomers were born between 1946 and 1964, following WWII.
• Baby Boomers are a powerful force in the market.
• Baby Boomers are the wealthiest generation in Australian history, holding 56% of national wealth.
• Baby Boomers outspend every other generation.
• In 2021, people aged 55-74 were 21.5% of the population.
• Baby Boomers represent a lucrative market for products and services to help them enjoy their lives.
• Generation X were born between 1965 and 1980, following the baby boom.
• Generation X makes up 19.3% of the population.
• 1/4 of Generation X has a university degree.
• Generation X is sometimes overlooked as a consumer group.
• Generation X prefers job security over job flexibility.
• Generation X lived through the global financial crisis.
• Generation X allocates most of the household budget to education, mortgage, and retirement.
• Generation X is price sensitive, prefers quality, is skeptical, and researches purchases.
• Millennials were born between 1977 and 2000 and are the children of baby boomers.
• Millennials make up 21.5% of Australia's population.
• 1/3 of Millennials has a university degree.
• Millennials are the most educated generation compared to Baby Boomers and Gen X.
• Millennials often have better jobs and above-average incomes.
• Millennials are often the most financially strapped generation due to COVID.
• Millennials make up 40% of Australian internet users.
• 70% of Millennials believe the biggest influence on a purchase is experiencing a product before buying it.
• Generation Z were born after 2000 and before 2010.
• Approximately 6 million Australians and New Zealanders are part of Generation Z.
• Generation Z are comparatively big spenders.
• In Generation Z, 1 in 4 families with children spends over $500 per child on toys annually.
• Generation Z is fluent and comfortable with digital technologies.
• Generation Z expects brands to support causes they value, like climate change.
• 63% of Generation Z are more likely to support brands supporting a social cause.
• 4/5 of Generation Z expect to shop online more.
• Companies can engage Generation Z through brand experiences and causes they believe in.
• Generation Alpha were born from 2010 onwards.
• Generation Alpha makes up 12% of the Australian population.
• There is a geographic shift in marketing.
• 40% of all Australian residents move every 5 years.
• 42% of Australians are attracted to moving from cities while retaining a city job through remote work.
• The workforce is becoming more white-collar with nearly 70% of Australians in white-collar jobs.
• A rising number of people are receiving tertiary education.
• 1/3 of people in Australia were born overseas.

Economic Environment

• This includes factors affecting consumer purchasing power and spending patterns.
• The economic environment can affect consumer spending and buying behavior dramatically..
• Consumers are buying less and seeking greater value.
• Value marketing aims to offer value with the right combination of product quality and service at a fair price.
• Changes in income require marketers to pay attention to income distribution and levels, measured by the Gini coefficient.
• 20% of Australian households earn about 50% of the country's adjusted gross household income.
• The bottom 20% earn only 4% of Australia’s adjusted gross household income.
• Key economic variables like income, cost of living, interest rates, and savings/borrowing greatly impact the market.

Natural Environment

• Includes natural resources needed as inputs by marketers or affected by marketing activities.
• Natural disasters such as bushfires increased protective mask sales and COVID-19 increased hand sanitizer sales.
• Environmental sustainability develops management strategies and practices that supports the environment’s resources, so future generations can meet their requirements.
• Environmental trends: Australians are concerned about sustainability.
• 88% of consumers want businesses to help make an environmental difference.
• Companies can aim to increase pollution.
• Government intervention.

Technological Environment

• Forces create new technologies that also create new products as well as market opportunities.
• New technologies offer opportunities for marketers.
• There is an increasing trend towards Australians using electronic payment options as well as mobile credit-card payments.
• Technologies can be used to collect consumer data.
• Companies not keeping up with technological trends are finding their products have come outdated.
• Governments set comprehensive laws and guidelines to ensure product safety, which marketers should be aware of .
• Virtual Reality is coming up with good content that uses VR to engage customers.
• Augmented reality allows customers to virtually “try on” makeup and apparel.
• The metaverse is a technological option for marketing by selling non-tangible products.
• An example is the Zed Run platform where virtual horses are raced, bred, and traded.
• Non-fungible tokens (NFTs) digital tokens coming from blockchain are used as a store of value or smart contracts.

Political and Social Environment

• Includes laws, government agencies, and pressure groups that influence organizations/individuals.
• Well-conceived regulation promotes competition and fair markets.
• Governments develop public policies to guide commerce, establishing laws and regulations for the good of society.
• Examples include fair trade, environmental protection, product safety, truth in advertising, and consumer privacy.
• Business legislation protects companies from unfair competition, enforced by the ACCC in Australia.
• Government regulations protect consumers from unfair business practices and the interest of society against business behavior.
• Profitable business activity does not always mean a better quality of life.
• Regulations exist for firms to take responsibility for social costs of their production/products.
• Marketers worldwide will encounter many agencies set up for enforcing trade policies and regulations.
• Marketers need to focus of main laws, protecting competition/consumers/society.
• Emphasis is put on actions that are ethical as well as socially responsible.
• Socially responsible firms actively find a way for protecting consumer/environment interests long term.
• Becoming open to sourcing.
• Online marketing has formed new social and ethical issues like online privacy, so businesses has to tell consumers/public their personal collection.
• Cause-related marketing exercises its social responsibility/builds positive images, linking to worthwhile causes.
• Many companies found cause-related missions.
• Become main form of corporate giving, linking the firm's products/services with fundraising for worthwhile causes/charities.

Cultural Environment

• Includes institutions/forces affecting basic societal values, perceptions, preferences, and behaviors.
• Core beliefs and values are highly persistent.
• Authentic brands communicate how they achieve goals of Australian consumers.
• Secondary beliefs and values are more open, such as what particular charity to give to and is a secondary belief.
• Shifts in secondary cultural values require marketers to predict cultural shifts for spotting new opportunities/threats.
• People’s views of themselves mean they use their products to express them.
• People’s views of others mean the interaction way online impacts how firms communicate as well as market their brands.
• Peoples view of organizations mean that work expect the firms to do society’s needs.
• People’s view of society means that their society influences consumption patterns/attitudes in the marketplace.
• People appreciate nature, so they shop around to find natural, organic products as well as fuel-efficient cars/medicines.
• People’s view about the universe influences consumer’s behavior spiritually.
• Companies can respond to the marketing environment either passively or proactively.
• A company with a passive stance will accept the pandemic and not design strategies that may have helped out.
• A company that will plan ahead develops strategies to change the environment.
• A proactive company will be take aggressive actions to increase their influence in their marketing activities.