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Principles of marketing: week 2 (07/10)
The marketing environment is made up of 2 dimensions:
MACROENVIRONMENT: impact on all actors, people and businesses that trade in the
global environment – PEEST (political, economic, environmental, social, technological) The
factors within the macroenvironment shapes the opportunities and threats which a
company will face and are out of the business’s control
...
(Jain, 1989)
...

- EU wide laws: Focuses on anti-competitive activities, by preventing the collusion by
price fixing, and the abuse of market dominance
...
g
...

Economic forces: Has a large impact on the levels of supply and demand, therefore
contingency plans need to be set up
...
g
...

- Unemployment: figures can be misleading as it fails to take into account frictional
unemployment for example
- Interest rates: Represent the price that borrowers have to pay lenders for use of
their money over a period of time
...
Imports = more expensive, exports =
cheaper and has a big impact on households, families and pensioners however
positively impacts the tourism industry (e
...
The number of tourists visiting from
China increased by a fifth in the summer of 2019)
- EU
- Eurozone
- Brexit: for example, the car industry is struggling and there is a threat that Brexit will
cause cars to be more expensive as tariffs from cars imported from Germany for
example, will make costs higher, and therefore the price, lowering demand
...

- Growing economies
Montgomery and Weinberg (1979) stated that marketing managers predict
governmental policy responses to economic uncertainty in decision making and contingency
planning
...
g
...

Threats to national security: companies that sell safety measures (CCTV) would
benefit as there would be a higher demand for their services in order to combat the
possible threats
...

Gender equality
Legislation: Legislation impacts marketing decisions, as it sets out the rules by which
a business is conducted – e
...
the smoking ban in public places had an effect on the
demand for cigarettes, forcing new products such as e-cigarettes to be developed
...
g
...

- Ethical consumerism: Occurs when individual consumers, when making purchase
decisions, take personal, environmental and social interests into account
...
g
...
Therefore,
people now purchase recyclable cups and make their coffee in there
...

Culture/society:
- Climate change
- Demographic change: Identifying the changes in demographics is important to
marketers, as they can predict market growth and size rates
...

Technological forces:
- Research and development = new product development
...
g
...

- Communication: Allows new channels of communication and distribution
...

- Society: social media has allowed protests to be set up in societies
...
g
...
However, this is seen as a
threat to existing services, as they may be replaced by automated services
...
Accessibility of information (stored
in ‘data warehouses’ are seen as a competitive advantage, as they can facilitate

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strategic information, and allow managers to make better informed decisions
faster as they access better quality information = corporate and marketing success
...


EXAMPLES OF MACROENVIRONMENT:
-Zuegg (Italian manufacturer of fruit juice and jam) had to analyse legislation of food
preparation and packaging when wanting to expand into other European markets
...
, 1999, p51)
-Cadbury’s developed a low-calorie chocolate bar, following healthy trends among
consumers
-JLR focus on developing Hybrid cars, after failing to follow the trend sooner, which led to
sales declining
...
The company has the influence, which
impacts the relationships between actors
...

- Threat of substitute products depends on switching costs, level of differentiation
SWOT ANALYSIS (Bonnici et al
...

- Weakness: Internal aspects of the business which may lead to failure and is within
their control
- Opportunities: Aspects of the external environment which the business can take
advantage of, in order to lead to success
...

The strengths and weaknesses = Microenvironment analysis
...

The opportunities and threats = Macroenvironment analysis
+ Simple
X More of a descriptive tool of the environment, instead of identifying a strategic plan
+Allows a business to maximise strengths, minimise weaknesses, exploit opportunities and
avoid threats
...
g
...

The value of a currency expressed in
-If the pound becomes weak,
another
businesses will market more to
exporters as exports become
cheaper (e
...
tourism)
Group of countries who give up part of their -Businesses may need to adapt their
sovereignty, in order to be part of a trading pricing, and charge a higher price if
agreement
...

due to tariffs following Brexit (e
...

the UK farming market will not
benefit from the EU subsidy policy,
causing them to face higher costs
than rivalries in the EU, and they
consequently will have to increase
their prices, and become less
competitive)
...
g
...
g
...

incomes will be increasing, which
would increase the levels of
consumerism
...
g
...
g
...

-Products will need to match local
tastes and customs if they develop
in new economies (e
...
McDonalds
adapt products to suit local tastes –
India)
-Large amount of market research is
required to expand and ensure
things are done correctly
...
g
...

-Businesses change the way in
which they will distribute their
goods when expanding into growing
economies – E
...
China seen an
Internet boom, with 80% of adult’s
in China’s largest cities shopping
online = use the internet as a
channel of distribution

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