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UNIT 3
MARKETING ENVIRONMENT

▪ Macro environment
▪ Industry environment
▪ Internal environment

BUSINESS ENVIRONMENT

Firm

Micro Environment

Macro Environment

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MARKETING ENVIRONMENT?

Marketing Environment?

The actors and forces outside

marketing that affect marketing
management successful
relationships with target market

Philip Kotler

MACRO ENVIRONMENT

▪ Political and legal

▪ Economics
▪ Social and Demographic
▪ Technological
▪ Nature

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MACRO ENVRIONMENT
 It is the remote environment of the firm. The external
environment in which it exists. As a rule this
environment is not controllable by the firm, it is too
huge & too unpredictable to control
 The success of the company, to a large extent will
depend on the compny’s ability to adapt & react to the
changes in the macro environment
 Primarily the company has to closely monitor the
various elements of macro environment. This will help
them understand the dynamic nature of the macro
environment. It is also helps them adapt to the
constant changes in the envrionment

MACRO ENVIRONMENT

Political & legal environment

Macro Environment

Factors that Economic environment

affect the whole
micro environment Social-cultural environment
and firms in the
long term
Technological environment

Natural environment

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POLITICAL & LEGAL FACTORS

 Political & legal factors are the most important of
all external agents.
 Business has to be more careful than other
factors.
 Before thinking of any business, an organization
always observes the political & legalsituation of a
nation.
 The unstable government or political tensions will
act as a barrier to implementing the marketing
strategies

POLITICAL & LEGAL

POLITICAL LEGAL
Account for all the political Includes government regulation & legal
activities that go on within a issue and both formal & informal rules under
which business has to operate its work
country
 Tax & labor policy of government
 Parties
 Government’s economic policy
 Government
 Involvement of government in different
 Relationship with other trading agreement
countries  National, regional & worldwide

TRENDS OF LEGISLATION
 Put more attention to protect natural environment
 Put more attention to protect consumer rights/ benefits
 Protect transparent/ healthy competition
 More international integration

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ECONOMIC FACTOR
 Close relationship between economic situation &
performance of a business (inputs, selling
products)
 Economic force consists of factors affectting
consumer purchasing power & spending patterns.
 Important criteria are:
 Income (GDP, GDP per capita)
 Inflation
 Spending pattern
 Economic cycle/economic revolution
 Balance trade = Export value – Import value
 Exchange rate

ECONOMIC

Year 2013 2014 2015 2016 2017 2018 2019 2020

GDP growth 5.8 5.98 2.80 5.03 7.89 7.08 7.02 2.91
rate (%/year)
GDP/ capita 1.900 2.052 2.109 2.215 2.389 2.564 2.714 2.750
(USD)

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ECONOMIC

ECONOMIC

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ENGEL’S LAW
 When family revenue increase
 Expenditure share for food will be decreased
 Expenditure share for living comfortability (house
rent, gas, electricity, phone, TV will be unchanged
 Expenditure share for others (clothes,
transportation, education, entertainement, sport…)
ans saving will be increased

ECONOMY CYCLE
 Prosperous stage: high demand for luxuries,
customers require more supporting services
 Recession (Stagnant) stage: demand for luxuries
will be declined sharply, customers only require
core product
 Recovery stage: Demand for materials, equipment
will be increased rather than consuming products

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SOCIAL FACTOR
 Social factors are related with society. How the
society behaves & thinks about any thing
 Business cannot exist without society because it is a
part of it
 Social factor are varied from country to country. It
depends upon culture and demographics
 Social factor includes
 Culture: belief, religion, customs, dominant values
in a community
 Demographics

DEMOGRAPHIC VARIABLES
 Variables:
 Population (size, growth)
 Age structure
 Population density
 Population movement
 Gender structure
 Average life Expectancy
 Urbanization
 Migration
…

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Household Patterns
Traditional Non-traditional household
household ▪ Singles Singles (VN-10.1% (2019)
Sweeden (47%); Norway (42%); England (34%);
 Husband, wife America (38%); Korea (29% - 36% (2045)
& children ▪ Single-parent families
▪ Divorcees

Growing rapidly
▪ Distinct needs, buying habits
– Eg smaller furniture, food sets
▪ Singles can spend > family

The Trend in Korea of Living Alone

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VIET NAM
 Population density (305/km2), double comparing
to China
 Population (2016 – 94,4 mill. – 1,27% world
population; 2019 – 96,2 mill.)
 3rd in Indochina
 15th in the world
 Median of age: Average age (2020): 32,5
 Average life expectancy:
 Vietnam 75,47 (2020); 79.9 (female); 71.7 (male)
 World: 73,2 (both sex) 75,6 (female); 70,8 (male)
 Healthy age is 66 – no. 116/182

VIET NAM
 An “aging” country (10% of the population> 60
years)
 An “aged” country is a country with more than
20% of population older than 60
 Vietnam is an aging country since 2011
 2030 – 17% population >60 (19 million people)
 2050 – 25% population >60 (28 million people)

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No Quốc gia Người Tốc độ tăng trưởng

1 Trung quốc 1.439.323.776 +0,41%

2 Ấn độ 1.380.004.385 +1,17

3 Mỹ 331.002.651 +0,81%

4 Indonesia 273.523.615 +0.86%

World population 2020

5 Pakistan 220.892.340 +1,43%

6 Brasil 212.559.417 +0,73%

7 Nigeria 206.139.589 +2,43%

8 Bangladesh 164.689.383 +1,04%

9 Nga 145.934.462 -0,08%

10 Mexico 128.932.753 +1,12%

11 Japan 126.476.461 -0,21%

12 Ethiopia 114.963.588 +2,85%

13 Philipines 109.581.078 +1,57%

14 Egypt 102.334.404 +2,45%

15 Vietnam 97.338.579 +0.93%

16 (congo) 89.561.403 +2,37%

17 Turkey 84.339.067

TREND OF SOCIAL FACTOR

 Aging population
 Falling fertility rates
 Become more loyal to the core values
 Pay more attention to the life quality
 Increasing role of woman

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TECHNOLOGICAL FACTOR

 Marketers must watch the technological

environment closely & adapt in order to keep up.
Otherwise, the products will soon be outdated, &
the company will miss new product & market
opportunities

TECHNOLOGY ENVIRONMENT
 Business need to understand the technology penetration &
user-technology interface …
 It is related to new inventions & development
 New technology – new product
 Affect the cost & quality of the outputs
 It includes: automation, technology incentives; rate of
technological change
 Monitor the changes of technology in the world

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TECHNOLOGY ENVIRONMENT
 Technological variables:
 Technology level
 Replacement rate of technology
 Dissemination of technology
 The friendliness of technology

 Technologicla trends
 Fast Improvement of technology
 Shorter product life-cycle
 Huge investment of the leader enterprises
 Fast imitation of the followers

NATURAL ENVIRONMENT
 It refers to the geographical location, the
presence of ecology & biodiversity, temperature,
weather, climate & predominant seasons and
natural resources
 Understand all of these, maketers will know
where to sell what ecological & environmental
aspects such as climate, weather & climate
 Trend of natural environment
 Exhausted non-renewable resources: coal, crude oil,
mineral resources
 Renewable resources: wind, solar energy, forest…
 Polutted environment: Air, water, noise, wastes..
 Global warming

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EMERGING TRENDS IN MACRO

ENVIRONMENT
• Number of working woman is increasing
• More People become more concern in their health
• Number of vegetarian people are increasing
• Get married late
• Divorces are increasing
• People become more concerned in environment
• Better education
• Average age is increasing
• Aging in many developed countries
• …

CHANGE OF WORLD
ENVIRONMENT
 V – Volatility – Thay đổi
 U – Uncertainty – Bất định
 C – Complexity – Phức tạp
 A – Ambiguity – Không rõ ràng (mơ hồ)

VUCA WORLD

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INDUSTRY ANALYSIS

INDUSTRY ENVIRONMENT

Threats of
new entrants

Competitor Rivals
Supliers Customers

Porter Five forces

Substitutes

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Number of potential new entrants

depend on...

• High Profit margin

• Attractive future growth opportunities in the
market
• Low Entry barrier (investment, technology,
legal…)
• Competition is limited
• Feasibility of gaining an equivalent (or
better) competitive advantage over the
existing firms serving the market

Entry barriers
 Entry barriers
 capital requirements
 economies of scale
 patent & licensing requirements
 Know-how, technologies
 Scare locations
 Raw material requirement
 Distributor requirements
 Reputation requirements
 The lower entry barrier, the lower profit

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Power is…

Ability to change price (offer) of customers and

supliers

Power of customer/suplier
depend on…

❖Number of customers (supliers)

❖Ability to coordinate of customers and
supliers
❖Number of purchased products and value;
frequency of buying
❖Cost to switch to other suplier

❖…

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Substitute

❖ A substitute product is a product from

another industry that offers similar benefits
to the consumer as the product produced
by the firms within the industry
❖Threat of substitutes occurs when there is
the availability of a product that the
consumer can purchase instead of the
industry’s product

Identifying competitors
Direct competitors Indirect competitors

Other companies offering a similar Other companies satisfying

product and service to the same the same customer needs
customers at a similar price in different ways

Direct Indirect
Company competitors
competitors

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Areas of evaluation of competitor’s

strengths and weaknesses
• Sales volume and market position in segment served
• Level of customer satisfaction
• Business approach (price, quality, service, speed...)
• Financial performance
• Financial resources and leverage
• Cost position relative to key competitors
• Relative product quality
• Product portfolio
• Methods of distribution
• Marketing strategies and effectiveness
• Management capability

INERNAL ENVIRONMENT

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INTERNAL ENVIRONMENT

R&D

Company

Top management Human resource Finance

Manufacturing

SWOT

Opportunities Strengths
What firm might
choose to do

External Gap Internal

environment environment

What firm
can do
Threats Weaknesses

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