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 5

CHARLES W. LAMB JOSEPH F. HAIR CARL MCDANIEL

JANE SUMMERS MICHAEL GARDINER
 5

CHARLES W. LAMB JOSEPH F. HAIR CARL MCDANIEL

JANE SUMMERS MICHAEL GARDINER
MKTG5 © 2023 Cengage Learning Australia Pty Limited
5th Edition
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1 2 3 4 5 6 7 26 25 24 23 22
BRIEF CONTENTS
PART 1 — AN INTRODUCTION TO MARKETING

1 An overview of marketing 2

2 Ethics and the marketing environment 18

PART 2 — CONSUMER INFORMATION

3 Consumer decision making 36

4 Business-to-business marketing 64

5 Segmenting and targeting markets 82

6 Market research, data collection and analytics 103

PART 3 — MANAGING THE MARKETING MIX

7 Product concepts 126

8 Developing and managing products 145

9 Services, non-profit and other intangibles 162

10 Marketing channels and distribution decisions 176

11 Integrated marketing communication (IMC) 210

12 The promotions mix 230

13 Pricing 269

PART 4 — THE WORLD OF MARKETING

14 Global marketing 292

15 Marketing strategy and planning 308

16 Marketing and new technology 326

Endnotes 341
Index 350
Tear-out review cards

iii
 How social media have changed our behaviour 25
Growth of component lifestyles 25
The demographic environment 26
The changing character of families 26
Multiculturalism 26

CONTENTS The economic environment

Consumer incomes
Inflation
27
27
27
Recession 27
The technological environment 27
The competitive environment 28
Industry analysis 28
Identifying your place in the industry 29
Competitor analysis 29
The political and legal environment 29
Federal legislation 29
Regulatory agencies 30

PART 1 Ethics, morality and law 30

AN INTRODUCTION Ethical theories 31
Personal ethics 33
TO MARKETING 1

1 An overview of marketing 2

What is marketing? 2
A social and evolving science 3 PART 2
Participating in marketing 4 CONSUMER
Marketing exchange 4 INFORMATION 35
Marketing management philosophies 5
Production orientation 5 3 Consumer decision making 36
Sales orientation 6
Market orientation 6 Understanding consumer behaviour 36
Societal marketing orientation 8 Value 37
Co-created value orientation 8
Who’s in charge? 9 The traditional consumer decision-making process 38
Stage 1: Need recognition 39
How organisations apply the different orientations 10 Stage 2: Information search 39
The organisation’s focus 10 Stage 3: Evaluation of alternatives 42
The organisation’s understanding of customer value 10 Stage 4: Purchase 44
The organisation’s attitude to customer satisfaction 12 Stage 5: Post-purchase behaviour 44
Defining the organisation’s business 12
Identifying the product’s target audience 12 Consumer buying decisions and involvement 46
The organisation’s primary goal 13 Determining the level of consumer involvement 47
The sales tools the organisation uses 13 Marketing implications of involvement 48
Building relationships 14 The consumer decision journey 48

Why study marketing? 16 Factors influencing consumer buying decisions 50

Marketing plays an important role in society 16 Cultural influences 51
Marketing is important to businesses 16 Social influences 54
Marketing offers outstanding career opportunities 16 Individual influences 58
Marketing is important to you 17 Psychological influences 60

2 Ethics and the marketing environment 18 4 Business-to-business marketing 64

What is business-to-business marketing (B2B)? 64

The external marketing environment 18
Factor 1: Understand current customers 19 Business versus consumer markets 66
Factor 2: Understand what drives consumer decisions 20 Demand 66
Factor 3: Identify the most valuable customers and Purchase volume 67
understand their needs 20 Number of customers 68
Factor 4: Understand the competition 20 Distribution structure 68
Environmental management 20 Nature of buying 68
Primary promotional method 69
The sociocultural environment 21
Baby boomers: demanding change 22 Trends in B2B marketing 69
Generation X: savvy and cynical 23 Social media in B2B marketing 70
Generation Y (Millennials): born to shop 23 Content marketing 71
Generation Z or iGeneration: the silent generation 24 Personalised communications and AI 71
Generation Alpha 24 Account-based marketing 71

iv Contents
Relationship marketing and strategic alliances 73 The growth of emerging technologies 122
Major categories of business customers 74 Mobile-first delivery 122
Producers 74 Consumer-generated media (CGM) 123
Resellers 75 Competitive intelligence 124
Governments 75
Institutions 75
Types of business products 75
Major equipment 76
Accessory equipment 76
PART 3
Raw materials 76 MANAGING THE
Component parts 76
Processed materials 77 MARKETING MIX 125
Supplies 77
Business services 77
7 Product concepts 126
Understand business buying behaviour 77
Buying centres 77 What is a product? 126
Evaluative criteria 78
Buying situations 79 Types of products 127
Purchasing ethics 80 Convenience products 128
Customer service 81 Shopping products 129
Speciality products 129
Unsought products 129
5 Segmenting and targeting markets 82
Product items, lines and mixes 130
Understanding market segmentation 82 Adjustments to product items, lines and mixes 132
What is a market segment? 83 The market uses of branding 134
Why marketers use segmentation 84 Benefits of branding 134
The process of segmenting a market 85 Branding strategies 136
Generic products versus branded products 136
Step 1: Select a market or product category Manufacturers’ brands versus private brands 137
for study 85 Individual brands versus family brands 138
Step 2: Select bases and descriptors/variables Co-branding 139
for segmentation 86 Trademarks 139
Geographic base 86
Packaging and labelling 140
Demographic base 87
Packaging functions 140
Psychographic base 89
Labelling 142
Behavioural base 90
Greenwashing 142
Access base 91
Universal product codes 143
Step 3: Analyse and profile segments to identify Quick response codes 143
target markets 92
Product guarantees and warranties 143
Step 4: Select targeting strategies 94
Undifferentiated targeting
Concentrated targeting
94
95
8 Developing and managing products 145
Multi-segment targeting 95
The product life cycle (PLC) 145
Step 5: Develop a positioning strategy 96 Introductory stage 147
Perceptual mapping 97 Growth stage 148
Positioning bases 97 Maturity stage 149
Segmenting for markets other than consumer markets 98 Decline stage 149
Segmenting business markets 99 Implications for marketing management 150
Segmenting for a one-to-one market 100 The importance of new products 151
Segmenting a global market 101 Categories of new products 152
Segmentation in a social market 101
The new-product development process 152
New-product strategy 153
6 Market research, data collection and analytics 103 Idea generation 154
Idea screening 155
The role of market research in marketing Business analysis 155
decision making 103 Development 156
The practice of market research 104 Test marketing 156
Steps in a market research project 106 Commercialisation 157
Opportunity or problem definition 106 Global issues in new-product development 158
Secondary data 108
The spread of new products 159
Research design 110
Diffusion of innovation 159
Sampling 118
Product characteristics and the rate of adoption 160
Collecting data 120
Marketing implications of the adoption process 160
Analysing data 121
Present findings and recommend actions 121
Following up 122

Contents v
 Trends in supply chain management 201
9 Services, non-profit and other intangibles 162 Outsourcing logistics functions 201
Supply chain risk, security and resilience 201
The importance of services marketing 162 Electronic distribution 202
How services differ from goods 163 Blockchains 202
Intangibility 163 Global logistics and supply chain management 203
Inseparability 164 Channel and distribution decisions: retail and
Heterogeneity 164 services 204
Perishability 164 Retailing 204
Service quality 164 Main types of retail operations 205
The gap model of service quality 165 Services 207

Marketing mixes for services 167 Customer trends and advancements 207
Product (service) strategy 167 Omnichannel versus multichannel marketing 207
Place (distribution) strategy 168 Use of emerging technology 208
Promotion strategy 169
Price strategy 169 11 Integrated marketing communication (IMC) 210
Global issues 169
Relationship marketing in services 170 Introducing integrated marketing
Internal marketing in service organisations 170 communication (IMC) 210
Traditional media and digital marketing 212
Non-profit-organisation marketing 171
Unique aspects of non-profit organisation marketing The communication process 213
strategies 171 The sender and encoding 213
Product decisions 172 Message transmission 214
Place (distribution) decisions 172 The receiver and decoding 214
Promotion decisions 173 Feedback 215
Pricing decisions 173 The communication process and the promotional mix 216
Social and peer-to-peer marketing 173 The goals and tasks of promotion 218
Peer-to-peer marketing 174 Informing 218
Persuading 219
10 Marketing channels and distribution decisions 176 Reminding
Connecting
219
219
Marketing channels 176 The elements of the promotional mix 220
Specialisation and division of labour 176 Personal selling 220
Overcoming discrepancies 177 Direct marketing 220
Contact efficiency 178 Advertising 221
Sales promotion 221
Channel intermediaries and their functions 179
Public relations 222
Channel functions performed by intermediaries 180
Content marketing and social media 223
Channel structures 180
Alternative channel arrangements 183 Factors affecting the promotional mix 223
Nature of the product 223
Issues that influence channel strategy 184
Stage in the product life cycle 224
Factors affecting channel choice 184
Target market characteristics 225
Levels of distribution intensity 185
Type of buying decision 225
Channels and their relationships 187
Availability of funds for promotion 225
Supply chains and supply chain management 189 Push and pull strategies 225
Benefits of supply chain management 190
Promotional goals and the AIDA concept 227
Supply chain integration 190
AIDA and the promotional mix 228
The key processes of supply chain management 192
Customer relationship management
Customer service management
192
193
12 The promotions mix 230
Demand management 193
The importance and effects of advertising 230
Order fulfilment 193
Advertising and market share 231
Manufacturing flow management 193
Advertising and the consumer 233
Supplier relationship management 194
Product development and commercialisation 194 Types of advertising 234
Returns management 195 Institutional advertising 234
Product advertising 234
How supply chain functions affect company
success 195 Making creative and media decisions 236
Supply management 196 Determining advertising campaign objectives 237
Inventory control 196 Post-campaign evaluation 240
Order processing 197 Media types 240
Production 198 Media selection considerations 245
Warehousing and materials handling 198 Media scheduling 247
Transportation 199
Supply chain technologies 200
Sustainable supply chain management 200

vi Contents
Sales promotion 247
The objectives of sales promotion 248
Tools for consumer sales promotion 248
PART 4
Public relations 251 THE WORLD
Major PR tools 252
Managing unfavourable publicity 254 OF MARKETING 291
Personal selling 254
Relationship selling 255 14 Global marketing 292
Selling in the technology age 256
Customer relationship management (CRM) and The impact of global marketing 292
personal selling 257 Developing a global vision 293
Leveraging customer information 259 Importance of global marketing 294
Social media 260 The external environment 294
Types of media 261 Culture 294
Social behaviour of consumers 262 Economic and technological development 296
Identifying social media objectives 263 Political structure 298
Evaluation and measurement of social media 264 Demographic make-up 300
Social media tools 265 Natural resources 301
Mobile technology 265
The changing world of social media 268 Global marketing by an organisation 301
Exporting 301
Licensing 302
13 Pricing 269 Contract manufacturing 302
Joint venture 302
The importance of price 269 Direct foreign investment 302
What is price? 269
The importance of price to marketing managers 272 The global marketing mix 303
Product and promotion 303
Pricing objectives 274 Pricing 305
Profit-oriented pricing objectives 275 Place (distribution) 305
Sales-oriented pricing objectives 275
Status-quo pricing objectives 275 Effect of the Internet on global marketing 307
Social media 307
The demand determinant of price 275
The nature of demand 275
How demand and supply establish prices 276 15 Marketing strategy and planning 308
Elasticity of demand 276
Why plan? 308
The cost determinant of price 278 Developing a mission statement and objectives 309
Mark-up pricing 279
Levels of strategy 309
Other determinants of price 279
Stages in the product life cycle 279 Corporate social responsibility 310
The competition 280 Sustainability 311
Distribution strategy 281 Ethical business decision making 312
The electronic environment 281 Marketing strategic planning 313
Promotion strategy 281
Analysis of the marketing situation 316
Demands of large customers 282
Identifying competitive advantage 317
The relationship of price to quality 282
Identifying strategic alternatives 318
How to set a price on a product 283
Developing the marketing plan 322
Establish pricing goals 283
Marketing objectives 323
Estimate demand, costs and profits 284
Establishing marketing mix components for each
Choose a price strategy 284
target market 323
The legality and ethics of price strategy 286
Implementation, evaluation and control processes 324
Unfair trade 286
Price fixing or collusion 286
Price discrimination 286 16 Marketing and new technology 326
Predatory pricing 286
The impact of the changing environment on
Fine-tuning the base price 287
marketing 326
Discounts, allowances, rebates and value pricing 287
Sociocultural environment 327
Value-based pricing 288
Economic environment 328
Geographic pricing 288
Political and legal environment 328
Special pricing tactics 289
Competitive environment 329
Technological environment 329

Contents vii
 The impact of disruptive technologies on Emerging issues affecting marketing 335
marketing practice and strategy 330 Virtual worlds and virtual reality 335
Crowdsourcing 332 Value and co-creation 338
Technology and entrepreneurship 332 Analytics and metrics 338
Operating systems and mobile technology 332 Artificial intelligence (AI) 339
Market research and technology 333 Conclusion 339
The impact of new technologies and media on
business-to-business (B2B), business-to-consumer
(B2C) and peer-to-peer (P2P) markets 334
B2B markets 334 Endnotes 341
B2C markets 334 Index 350
P2P markets 334 Tear-Out Review Cards

viii Contents

CHAPTER OPENING FEATURES
Learning objectives at the
start of each chapter identify
key concepts that will be
covered. Learning objective
icons appear throughout the
chapter to identify where
each objective is discussed.
te less. Related to this
velopment of Recycling
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Hong Kong residents
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s to use the recycling
troduced the GREEN$
to earn GREEN$ when
deemed in the form of
FEATURES WITHIN CHAPTERS
and environmentally
council probably has in
Important Key terms are marked in bold in the text
ls are actively involved and defined in the margin when they are used for the
you make judgements
e offer the best value in
first time.
eting is not a new area
ave been participating
of your life.
arketing
if you are already a
answer is that even
e marketing exchange
r in this chapter), there
ics that organisations
duct you want, when
want and at the time
his view, we see that
ers aiming to meet the
arketing can be viewed
hings you buy, acquire
d from the perspective Gain
ands you as a customer
real world through the Real world marketing boxes.
ducts and offerings to
er perspective that will
t i ng, t here a re two
xperienced marketing.
believe they know and
se of their experience.
keting, people often
ng and selling. These
s an organisation may
ny other promotional
her general strategies
plied to get a valued
aïve understanding of
ople undervalue what
ganisation, whether it
e iPhone or attempting
ch as by asking people
at you will find many
during your study, but
g
Guide to the text
As you read this text you will find a number of features in
every chapter to enhance your study of marketing
AN OVERVIEW
understand how the theory is applied in the
OF MARKETING
actually have specialised meanings in a marketing
context, so care needs to be taken to develop and use
your marketing vocabulary correctly.
Accordingly, when we look at marketing, there
are many facets and intricacies to be explored. One
of the easiest ways to do this is to look at the various
concepts and theories that we will address in this
text and think about how those concepts and theories
may describe the processes you follow when deciding
whether to buy or adopt the latest product.
The remainder of this chapter will consider some key
concepts: marketing exchange, marketing orientations
and the concepts of customer value and satisfaction.
LO2 Marketing exchange
Exchange is a core function of
exchange
marketing. The concept of exchange
When people give up
is quite simple: you must give up something of value
something of value to get something to receive something
of value that they
of value that you would rather have. would rather have.
Normally, we think of money as the
2
medium of exchange; that is, we ‘give up’ money
(something of value) to ‘get’ goods and services that
are of equal or greater value to us as buyers. But
BK-CLA-MKTG5-220105-Chp01.indd
exchange does not always require money. People may
barter or trade such items as lunches, computer games,
time, effort or behaviours and ways of thinking.
For an exchange to take place, five conditions need
to occur:
Stepan insight
There mustinto how
be at least twomarketing theories relate to the
parties (that is, people
1 or groups of people/organisations)
Step Each party must have something of value that
2 the other party also wants
Each party must be able to communicate with
Step the other party and deliver the goods or services
3 sought by the other party
Step Each party must be free to accept or reject the
4 other’s offer
Step
5
Each party must want to deal with the other party3
Exchange won’t always take place even if these
conditions exist – however, all five conditions must
exist for an exchange to be possible. For example,
suppose you place an advertisement on http://
carsales.com.au stating that your used car is for sale
at a certain price. Several people may contact you to
ask about the car; some may test-drive it; and one or
1
andwehelp
In this chapter, introduceyou
the idea of marketing
and explain how the study of marketing often covers a
real world.
wider scope than people realise. We focus on the core
principle of marketing – the exchange of value – and
reflect on different orientations that have been used in
the development of marketing practice. We also discuss
why the study of marketing will help you in your studies
and your career.
LO1 What is marketing?
What does the term marketing mean to you? Many
people think marketing is the same as personal
Learning Objectives selling. Others believe it is the same as
personal selling and advertising. Still
LO1 Define marketing. others believe that it has something
LO2 Explain the marketing to do with making products available
exchange conditions in stores, ar ranging displays and
and their influence on
What is marketing?
maintaining inventories of products
marketing. for future sales. Marketing includes all
these activities and more.
LO3 Describe the five
Marketing has two facets. First, it can
competing marketing
be considered a philosophy, an attitude, a
management orientations. perspective or a management orientation that
LO4 Discuss ways management stresses customer satisfaction. (These views
orientations are applied in an will be discussed further in this chapter.) Second,
organisation. marketing can also be an organisational process
used to apply the philosophy, attitude, perspective or
LO5 Identify reasons for studying marketing.
management orientation.
Australian and American marketing associations’
definitions encompass both perspectives. The
American Marketing Association suggests that
marketing is ‘the activity, set of
institutions, and processes for
marketing
‘[T]he activity, set
creat i ng, c o m m u n i c a t i n g , of institutions,
del ive r i ng a nd e xc ha ng i ng and processes
offerings that have value for communicating,
for creating,
customers, clients, partners and delivering and
exchanging offerings
society at large’.1 The ‘activity’ that have value for
Examine how theoretical concepts have been used
a nd ‘processes’ i nclude t he customers, clients,
planning and execution of the partners and society
in practice through the Marketing in practice
fol low i ng concepts: pr ici ng
at large’.
(price), promotion and distribution (place) of ideas,
boxes.
goods and services (i.e. product) to create exchanges
that add value to the customer while achieving
organisational goals.
Marketing entails processes that focus on
delivering value and benefits to customers, not
just selling goods, services and ideas. It uses
communication, distribution and pricing strategies
2 03/08/22 1:05 PM
Explore the real-world ethical issues faced by marketers
in the Ethical marketing boxes throughout the chapters.
Guide to the text ix
 END-OF-BOOK FEATURES

Chapter tear-out cards

found at the back of the book
provide a portable study tool,
summarising each chapter
REVIEW 1 AN OVERVIEW OF MARKETING

LEARNING OBJECTIVES
for class preparation and
LO1 Define marketing.
revision. Key Terms
The ultimate goal of all marketing activity is to facilitate mutually satisfying
marketing societal marketing exchange of value between parties. The activities of marketing include
‘[T]he activity, set orientation the conception, pricing, promotion and distribution of ideas, goods and
of institutions and The idea that an services.
processes for creating, organisation exists not
communicating, only to satisfy customer Creating
delivering and needs and wants, value
exchanging offerings and organisational Customer value
that have value for objectives, but also to and beneficial
customers, clients, preserve or enhance relationships
partners and society an individual’s and
at large’. society’s long-term Product Place
best interests.
exchange
When people give up co-created value
something of value orientation Exchange
in order to receive The orientation where A B
something of value that customers are part
they would rather have. of the value creation
in use and at the
production orientation exchange. Price Promotion
A marketing philosophy Delivering Communicating
that focuses on the co-creation of value value value
internal capabilities A concept of the source
of an organisation, of value that suggests
rather than on the value is created by
marketplace’s needs customers using
and wants. the resources of a
company, as opposed LO2 Explain the marketing exchange conditions and their
sales orientation to value being inherent influence on marketing.
A marketing philosophy to the product.
that assumes that Marketing exchange is the cornerstone of any marketing activity.
people will buy more competitive advantage To understand marketing exchange is to understand the process
goods and services The idea that of exchanging things of value, whether they are money or goods
if aggressive sales a product’s and services. An exchange has five conditions:
techniques are used characteristics can
and that high sales solve a set of customer ●● There must be at least two parties.
result in high profits. problems better than ●● Each party has something that might be of value to the other party.
any competitor’s ●● Each party is capable of communication and delivery.
market orientation product.
A marketing philosophy ●● Each party is free to accept or reject the exchange offer.
that assumes that a customer value ●● Each party believes it is appropriate or desirable to deal with the
sale depends on a The ratio of benefits to
customer’s decision to
other party.
the sacrifice necessary
purchase a product. to obtain those Even if all five conditions occur, an exchange might not transpire.
benefits. People engage in marketing whether or not an exchange happens.
marketing concept
The idea that the customer satisfaction LO3 Describe the five competing marketing management
social and economic The feeling that orientations.
justification for an a product has
organisation’s existence The five business orientations are:
met or exceeded
is the satisfaction the customer’s 1 Production orientation: focuses on the internal capabilities of
of customer wants expectations. an organisation.
and needs while
meeting organisational 2 Sales orientation: focuses on aggressive sales techniques.
relationship marketing
objectives. A strategy that focuses 3 Market orientation: focuses on consumer decision-making.
on keeping and 4 Societal marketing orientation: where the focus is on meeting the
improving long-term needs, wants and objectives of customers, and organisational
partnerships with
customers.
objectives, while meeting individuals’ and society’s long-term
best interests.
5 Co-created value orientation: recognises that value is created by the
customer by combining the new product with what the customer
already has available.

BK-CLA-MKTG5-220105-Review_Card.indd 1 15/09/22 10:34 AM

x Guide to the text

 Guide to the online resources
FOR THE INSTRUCTOR

Cengage is pleased to provide you with a selection of resources

that will help you to prepare your lectures and assessments,
when you choose this textbook for your course.
Log in or request an account to access instructor resources
at au.cengage.com/instructor/account for Australia
or nz.cengage.com/instructor/account for New Zealand.

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MindTap for MKTG5 is full of innovative resources to support critical thinking, and help your students move from
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MindTap is a premium purchasable eLearning tool. Contact your
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INSTRUCTOR’S MANUAL
The Instructor’s Manual includes:
• Summary of Learning Objectives • Application exercises and activities
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for group work Marketing questions in the text
• Review questions • Additional case studies for use in class

COGNERO TEST BANK

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want using Cognero. Cognero test generator is a flexible online system that allows you to import, edit, and manipulate
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POWERPOINT™ PRESENTATIONS
Use the chapter-by-chapter PowerPoint slides to enhance your lecture presentations and handouts by reinforcing the
key principles of your subject.

Guide to the online resources xi

 ARTWORK FROM THE TEXT
Add the digital files of graphs, tables, pictures and flow charts into your course management system, use them in
student handouts, or copy them into your lecture presentations.

FOR THE STUDENT

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xii Guide to the online resources

 PART ON E

AN INTRODUCTION
TO MARKETING

1 An overview of marketing

Ethics and the marketing

2
environment
 1 In this chapter, we introduce the idea of marketing

AN OVERVIEW and explain how the study of marketing often covers a

wider scope than people realise. We focus on the core

OF MARKETING principle of marketing – the exchange of value – and

reflect on different orientations that have been used in
the development of marketing practice. We also discuss
why the study of marketing will help you in your studies
and your career.

LO1 What is marketing?

What does the term marketing mean to you? Many
people think marketing is the same as personal
Learning Objectives selling. Others believe it is the same as
personal selling and advertising. Still
LO1 Define marketing. others believe that it has something
LO2 Explain the marketing to do with making products available
exchange conditions in stores, arranging displays and
What is marketing?
and their influence on maintaining inventories of products
marketing. for future sales. Marketing includes all
these activities and more.
LO3 Describe the five
Marketing has two facets. First, it can
competing marketing
be considered a philosophy, an attitude, a
management orientations. perspective or a management orientation that
LO4 Discuss ways management stresses customer satisfaction. (These views
orientations are applied in an will be discussed further in this chapter.) Second,
organisation. marketing can also be an organisational process
used to apply the philosophy, attitude, perspective or
LO5 Identify reasons for studying marketing.
management orientation.
Australian and American marketing associations’
definitions encompass both perspectives. The
American Marketing Association suggests that
marketing is ‘the activity, set of
marketing
institutions, and processes for
‘[T]he activity, set
creat i ng, c o m m u n i c a t i n g , of institutions,
del ive r i ng a nd e xc ha ng i ng and processes
for creating,
offerings that have value for communicating,
customers, clients, partners and delivering and
exchanging offerings
society at large’.1 The ‘activity’ that have value for
a nd ‘processes’ i nclude t he customers, clients,
planning and execution of the partners and society
at large’.
fol low i ng concepts: pr ici ng
(price), promotion and distribution (place) of ideas,
goods and services (i.e. product) to create exchanges
that add value to the customer while achieving
organisational goals.
Marketing entails processes that focus on
delivering value and benefits to customers, not
just selling goods, services and ideas. It uses
communication, distribution and pricing strategies

2
to provide customers and other stakeholders with
the goods, services, ideas, values and benefits they
desire, when and where they want them. It involves
building long-term, mutually rewarding relationships
that benefit all parties concerned. Marketing also
entails an understanding that organisations have
many connected stakeholder ‘partners’, including
employees, suppliers, stockholders, distributors
and others.
Marketing also helps find customer-focused
solutions to new and emerging problems. Consider
the following ‘Real World Marketing’ box to learn
how restaurateurs used marketing principles to adapt
during the COVID-19 pandemic.
A social and evolving science
Marketing is a social science, meaning that things
are not always as clear-cut as in fields of science
such as chemistry. Because it is a relatively new
area of business study, marketing is likely to evolve
as academics and practitioners understand more
about it.
You will find that you have an innate understanding
of marketing, one developed through your everyday
experiences. For example, suppose that one morning
you decide to have some cereal for breakfast. The
cereal you select will be a product you have chosen
from various other offerings in the marketplace. You
have decided that this product provides the value you
require from cereal. Factors you may consider include
your available time, the food’s quality and taste, and
its ability to sustain you until your next meal.
Another example is social marketing programs. In
Hong Kong, as in most countries, there is a problem
with the amount of household waste. The government
has established a promotional campaign encouraging

Real World Marketing

DISHING UP FINE DINING AT HOME

The hospitality industry has taken a hit in many
countries as COVID-19 restrictions have forced
fine-dining restaurants to close their doors or limit
customer numbers. While physical doors were
closing, restaurant owners were opening the door

Shutterstock.com/Aleksandrs Muiznieks
to new and innovative ways of delivering the fine
dining experience while upholding the quality of
their service offering.
Sydney fine-dining restaurant Sixpenny, owned
by three-hat chef Dan Puskas, turned its dining
room into a general store, offering everything from
house-made passatas and fluffy Japanese
cheesecakes to four-course take-home set menus.
In the UK, acclaimed chef Adam Handling, owner of multiple award-winning restaurants including Frog,
turned to creating menus that could be finished and enjoyed at home. Through business venture Hame,
Adam now delivers his signature dishes in the form of make-at-home meal kits. All dishes require varying
levels of at-home preparation and come with recipe cards featuring QR codes that link to a step-by-step
video of Adam finishing and plating the dishes. A Hame menu for two can cost upward of $260 and may
include courses such as Lobster Wagyu and Champagne truffles. Customers are encouraged to share
their Hame dishes online using the hashtag #Hamebyah. While other meal kit providers such as Hello
Fresh and Marley Spoon cater for the value-conscious consumer, these emerging fine-dining meal kits
target those seeking the taste of a restaurant experience in the comfort of home.
Whether through live-streamed cooking demonstrations on Instagram, online cooking class
subscriptions or cook-at-home recipe cards and meal kits, fine dining restaurants are leveraging content
creation and new distribution channels to support their core product offering. Furthermore, as customers
are provided with more opportunities to bring fine dining experiences into their own homes, they are
concurrently becoming co-creators in the dining experience, and then sharing these experiences online.
Source: Rigby, M, 2020, ‘Hats off to top Sydney chefs and providores changing with the new world order’, Good Food, 20 April,
https://www.goodfood.com.au/eat-out/news/hats-off-to-top-sydney-chefs-and-providores-changing-with-the-new-world-order-20200415-
h1ndm9; Adam Handling, 2022, https://www.adamhandling.co.uk/hame/

CHAPTER 1 An overview of marketing 3

 residents to use less and waste less. Related to this
promotional strategy is the development of Recycling
Stations, sites where recyclable materials can be left,
and a centre to educate the Hong Kong residents
about sustainable choices and waste minimisation.
To further encourage residents to use the recycling
facilities, the government introduced the GREEN$
Smart Card, allowing residents to earn GREEN$ when
they recycle, which can be redeemed in the form of
gifts such as recycling bags and environmentally
friendly products. 2 Your local council probably has in
place similar schemes.
As you can see, all individuals are actively involved
in marketing. As a consumer, you make judgements
about products that you believe offer the best value in
each situation. As such, marketing is not a new area
of study to you because you have been participating
in marketing activity for most of your life.
Participating in marketing
Why, then, study marketing if you are already a
marketing participant? The answer is that even
though you participate in the marketing exchange
(something we will discuss later in this chapter), there
are a lot of strategies and tactics that organisations
use to ensure you get the product you want, when
you want it, in the size you want and at the time
and place you want it. With this view, we see that
producers are resource providers aiming to meet the
customer’s expectations. So, marketing can be viewed
as a personal reflection on the things you buy, acquire
or are given; or it can be viewed from the perspective
of how an organisation understands you as a customer
and develops and refines products and offerings to
meet your needs. It is this latter perspective that will
be the focus of this text.
In t he study of ma rket i ng, t here a re two
downsides to already having experienced marketing.
The first is that many people believe they know and
understand marketing because of their experience.
W hen asked to define marketing, people often
respond that it is advertising and selling. These
are two promotional activities an organisation may
use. However, there are many other promotional
strategies and tactics, and other general strategies
and tactics that can be applied to get a valued
product to the market. This naïve understanding of
marketing can mean that people undervalue what
marketing can bring to an organisation, whether it
is selling a product such as the iPhone or attempting
to change social behaviour, such as by asking people
to reduce their home waste.
The other downside is that you will find many
terms that may seem familiar during your study, but
4 PART ONE An introduction to marketing
actually have specialised meanings in a marketing
context, so care needs to be taken to develop and use
your marketing vocabulary correctly.
Accordingly, when we look at marketing, there
are many facets and intricacies to be explored. One
of the easiest ways to do this is to look at the various
concepts and theories that we will address in this
text and think about how those concepts and theories
may describe the processes you follow when deciding
whether to buy or adopt the latest product.
The remainder of this chapter will consider some key
concepts: marketing exchange, marketing orientations
and the concepts of customer value and satisfaction.
LO2 Marketing exchange
Exchange is a core function of
exchange
marketing. The concept of exchange
When people give up
is quite simple: you must give up something of value
something of value to get something to receive something
of value that they
of value that you would rather have. would rather have.
Normally, we think of money as the
medium of exchange; that is, we ‘give up’ money
(something of value) to ‘get’ goods and services that
are of equal or greater value to us as buyers. But
exchange does not always require money. People may
barter or trade such items as lunches, computer games,
time, effort or behaviours and ways of thinking.
For an exchange to take place, five conditions need
to occur:
Step There must be at least two parties (that is, people
1 or groups of people/organisations)
Step Each party must have something of value that
2 the other party also wants
Each party must be able to communicate with
Step the other party and deliver the goods or services
3 sought by the other party
Step Each party must be free to accept or reject the
4 other’s offer
Step
5
Each party must want to deal with the other party3
Exchange won’t always take place even if these
conditions exist – however, all five conditions must
exist for an exchange to be possible. For example,
suppose you place an advertisement on http://
carsales.com.au stating that your used car is for sale
at a certain price. Several people may contact you to
ask about the car; some may test-drive it; and one or
more may even make you an offer. Some people might
Exhibit 1.1 F
 IVE MARKETING
even offer you a like-value car, or another item, in
trade. All five conditions that are necessary for an MANAGEMENT
exchange to occur are present in this scenario. But PHILOSOPHIES
unless you reach an agreement with a buyer and
actually sell the car, an exchange will not take place. Orientation Focus

Notice that marketing activities can occur even Production

What can we
if an exchange does not result. In this example, you
make or do best?

would have engaged in some marketing activities by

uploading the car’s details onto the website, even if Sales
How can we sell
more aggressively?
no one bought it.
Now that you have a basic understanding of
marketing exchange, it is important to understand Market
What do customers
want and need?
how an organisation’s marketing orientations will
influence the way it deals with you as a customer. What do customers
Societal want and need, and
how can we benefit society?
LO3 Marketing
management
What resources does the
Co-created product present to the customer
so that they can create value?

philosophies
An organisation’s marketing management philosophy
influences its behaviour and characteristics, and
how it interacts with its customers. Organisations
may adopt any of several marketing management
philosophies, but we will focus on the major
orientations in the following sections (see also
Exhibit 1.1). These orientations are:
1 A production orientation. The focus is on an
organisation’s internal capabilities to develop
and produce better and cheaper products.
2 A sales orientation. An organisation focuses on
aggressive sales techniques to encourage high
sales volume and, it is hoped, high profits.
3 A market orientation. An organisation focuses
on satisfying customers’ needs and wants as
well as organisational goals, thereby developing
the social and economic objectives of an
organisation.
4 A societal marketing orientation is a derivative
of the marketing orientation. It focuses on
customers’ wants and needs, and embraces
the notion of preserving, or improving, an
individual’s or society’s long-term best interest.
5 A co-created value orientation is the recognition
that value is not given to the customer when they
buy a product. Value is created by the customer
by combining the new product with what the
customer already has available.
Production orientation
A production orientation is an
production
orga n isat iona l ph i losophy t hat orientation
focuses on an organisation’s internal A marketing
capabilities, rather than on the philosophy that
focuses on an
marketplace’s needs and wants. A organisation’s
production orientation means that internal capabilities,
management assesses its resources
rather than on the
marketplace’s
and asks these questions: needs and wants.
•• ‘What can we do best?’
•• ‘What can our engineers design?’
•• ‘What is easy to produce, given our equipment?’
In the case of a service organisation, managers ask:
•• ‘What services are most convenient for the
organisation to offer?’
•• ‘Where do our talents lie?’
Some organisations have the belief that if they
produce something, the market will want to buy it.
There is nothing wrong with assessing an
organisation’s capabilities; in fact, such assessments
are major considerations in strategic marketing
planning (as discussed later in this chapter). The
only downfall of the production orientation is that it
doesn’t consider whether the products an organisation
efficiently produces also meet the marketplace needs.
Sometimes what an organisation can best produce
is just what the market wants. Apple has a history
of production orientation – creating computers,
operating systems and other gadgetry ‘because it can’,

CHAPTER 1 An overview of marketing 5

 hoping to sell the resulting products. Some items have
found a waiting market (early computers, the iPod Consumers may be left questioning the
and iPhone). Other Apple products, though, simply motivation behind Apple’s decision to remove
flopped. An example is the Newton Message Pad, one the headphone jack. Do you think this
of the first versions of a personal digital assistant, represents the company embracing an
which featured handwriting recognition technology: increasingly wireless future, or forcing one
an innovative feature in technological terms, but upon customers for its own gain?
one that, from the perspective of the market, simply
replicated the functionality of a paper notebook and
A s w it h t he product ion or ientat ion, t he
pen for a considerably higher price. 4
f u nda menta l issue fac i ng a sa les- or iented
organisation is that it risks a lack of understanding
Sales orientation of the market’s needs and wants. These organisations
A sales orientation is based on the belief that people find that, despite the quality of their sales teams,
will buy more products if aggressive sales techniques are they cannot convince people to buy products they
sales orientation used, and that high sales result in high don’t need or want, for example, life insurance and
A marketing profits. Not only are sales to the ultimate other products presented in early-morning and late-
philosophy that buyer emphasised, but intermediaries evening television infomercials. Some sales-oriented
assumes that people
will buy more are encouraged to push manufacturers’ organisations simply lack the understanding of what
goods and services products more aggressively. To sales- is important to their customers.
if aggressive sales
techniques are used
oriented organisations, marketing
and that high sales means selling things and collecting Market orientation
result in high profits. money (see the following ‘Marketing in
Organisations that have a market market orientation
Practice’ box).
orientation focus on the needs of A marketing
the customer that contribute to their philosophy that
Marketing in Practice assumes that a
decision to purchase a product. This sale depends on a
approach recognises that a sale does customer’s decision
The iPhone goes wireless at a cost to to purchase a
not depend on an aggressive sales product.
consumers
team, but rather on a customer’s
One of the dangers of a production or sales decision to purchase a product. What is of primary
orientation is failing to understand what is importance is that an organisation is defined not by
important to the organisation’s customers.
what the business thinks it produces, but by what
When Apple was developing the iPhone 7, it
the customer thinks they are buying – that is, the
decided to remove the headphone jack, a
perceived value.
design decision that would free up internal
space for other technologies. The decision
played an integral role in making the iPhone 7
Ethical Marketing
the first water-resistant iPhone, with its entire
enclosure re-engineered. While the water-
resistant feature may have benefited Apple
USING PRICE TO SELL OLD STOCK
When an organisation adopts a sales
iPhone 7 users, it came at a cost. Apple iPhone 7
orientation, the price is often a key component
users needed a headphone jack adaptor if they
of the sale. As we will discover later in this text,
wanted to use their existing earphones. The
the consumer often uses price as an indicator of
iPhone 7 came with a single adaptor; this
quality when they are unsure or unfamiliar with
meant that consumers could no longer listen
the product. In a marketing orientation the
to music while charging their phone. The
organisation looks to satisfy the needs and
solution to this problem involved purchasing
wants of the consumer. In the example below
an additional dual adaptor also sold at an extra
the wholesaler/retailer has unused stock with a
cost by Apple. Alternatively, customers had the
looming expiry date. How they choose to deal
option to purchase wireless headphones.
with the matter depends on their orientation.
Strategically, Apple timed the iPhone 7 release
A sales orientation philosophy will look to price,
with the release of its Apple AirPods, the
while a marketing orientation will look to value
company’s latest innovation in wireless
as to the key for the quick sale of the product.
headphone technology.

6 PART ONE An introduction to marketing

 During the COVID-19 pandemic many food
retail outlets suffered slow or low sales, and
some businesses needed to shift operation
from instore to takeaway, or close. The
outcome of this change in the marketplace
meant that wholesalers, who supply these
businesses, were holding more stock. It is
common for wholesalers to use a six-month
lead time when ordering stock from
manufacturers. With slowing demand from
their customers, and previously ordered and
paid-for stock arriving, wholesalers needed to
move old stock to have space for the arriving
stock and to move stock before it reached its
used-by date.
Wholesalers’ first response was to offer
sales deals such as buy 10 cases and get one
free, but the take-up was slow and did not
resolve the problem. Next, they went to hard
selling but with a greatly reduced price. In
some cases, they had to sell below cost price
to recover some sales before the stock would
have to be destroyed.
Question:
Do you think it is ethical to sell a product with a
limited life at a very low price? Explain your
answer.
Organisations that are market-oriented adopt and
implement the marketing concept, which is the idea
t hat t he soc ia l a nd econom ic
marketing concept
justification for an organisation’s
The idea that the
social and economic ex istence is the satisfaction of
justification for customer wants and needs while
an organisation’s
existence is the
meeting organisational objectives.
satisfaction of This means these organisations
customer wants and recognise that there is no reason why
needs while meeting
organisational customers should buy their product
objectives. offerings over those of another, unless
they are receiving a perceived better
value from the exchange.
The marketing concept includes:
• focusing on customer wants and needs so that
the organisation can distinguish its product(s)
from competitors’ offerings
•• integrating all organisation activities, including
production, to satisfy these wants and needs
•• achieving an organisation’s long-term goals by
satisfying customer wants and needs legally and
responsibly.
Achieving a marketing orientation involves
obtaining information about customers, competitors,
Shutterstock.com/Ben Wehrman
Tesla vehicles, that are both futuristic and eco-friendly,
are growing in popularity in Australia. These cars appeal
to customers who desire a cleaner and more economical
luxury car.
and markets; examining the information from a total
business perspective; determining how to deliver
superior customer value; and implementing actions to
provide value to customers. It also entails establishing
and maintaining mutually rewarding relationships
with customers.
Competitor analysis
Understa nd i ng you r compet it ive a rena a nd
competitors’ strengths and weaknesses is a critical
component of market orientation. This understanding
includes assessing what existing or potential
competitors might be intending to do tomorrow as well
as what they are doing today.
BlackBerry (formerly Research in Motion) failed to
realise it was competing against computer companies
as well as telecommunications companies, and its
wireless handsets were quickly eclipsed by offerings
from Google, Samsung and Apple. Had BlackBerry been
a market-oriented company, its management might
have better understood the changes taking place in
the market, seen a competitive threat and developed
strategies to counter the threat. Instead, after a five-
year slump, it re-entered the market with the wholly
redesigned BlackBerry 10 operating system, which
launched alongside two new handsets in 2013. These
strategies did not work, and the company underwent
a slow decline in market share. New life was brought
to the company with its adoption of Android and iOS
operating systems and newly designed devices –
however, the decision to stop production came in
2017. In 2021, there were rumours that Blackberry
will return with a 5G smartphone. Time will tell if
this relaunch will be a success. 5 By contrast, Tesla
recognised the need for an electric vehicle, but more
importantly an electric vehicle that complemented
CHAPTER 1 An overview of marketing 7
 existing needs and aspirations when buying a new car. In order to understand this orientation we
However, they also offered additional value items such first need to unpack the concept of value. The
as the over air software updates, automised driving exchange of value is the cornerstone of marketing.
and, of course, no CO2 emissions. But what exactly is value, and how is it explained?
Unfortunately, a precise definition of marketing
Societal marketing orientation value does not exist. Instead, there are several themes
related to the term; this led one group of researchers to
A market-oriented organisation may choose not to
conclude the term has a ‘fuzzy definitional problem’.7
deliver the benefits sought by customers on the grounds
In spite of this, all those who have attempted to
that these benefits may not be good for individuals
define value agree on the premise that some form of
or society. This philosophy is called
assessment of benefits against sacrifices occurs in
societal marketing a societal marketing orientation.
orientation the creation of value. 8
Organisations adopting this philosophy
The idea that an Today, value creation is seen as the process through
believe that an organisation exists to
organisation exists
which a customer is made better off in some respect, or
not only to satisfy satisfy customer needs and wants and
customer needs their wellbeing is increased, as a result of consuming
meet organisational objectives – in
and wants, and the good or service they purchase. 9 Thus, value
organisational this respect, it is the same as a market
creation emerges when a customer uses or possesses
objectives, but orientation – but also to preserve or
also to preserve resources (goods) or achieves particular mental states
or enhance an enhance individuals’ and society’s
(services). This is known as value-in-use. Because this
individual’s and long-term best interests.
society’s long-term process will be unique for everyone, the process of
best interests. For example, organisations that
value creation will differ for every individual, and this
adopt this orientation often strive
makes it challenging for marketers to fully utilise this
to help less privileged communities
concept. So why is it important?
receive fair and equitable payment for their goods
Customers have an increasing abundance of
and labour by dealing with other like-minded
choice in most of their purchases, and this creates
organisations.
a buyer’s market of high customer expectations
Although the societal marketing concept has been
and limited loyalty. If a brand cannot accurately
discussed for more than 30 years, it did not receive
create, communicate and deliver potential value to
widespread support until the early 2000s. Concerns
customers, it will quickly be rejected – or, worse, not
such as climate change, the depletion of the ozone
even considered for purchase. So, it is increasingly
layer, fuel shortages, pollution and health issues
important for brands to understand what customer
have caused consumers and legislators to become
value is and, more importantly, what it is not.
more aware of companies’ and consumers’ needs to
Remember from the previous paragraph that customer
adopt measures that conserve resources and cause
value is determined by the customer, and not by the
less damage to the environment. Studies reporting
seller or producer of a good or service. People buy
consumers’ attitudes towards, and intentions
things because they like them or need them, not
to buy, environmentally friendly products show
because they exist or because the company that sells
widely varying results. The 2020 pandemic made all
them likes them.
consumers change their behaviour, but researchers
When we think about value creation this way,
speculated on if the changes would stick. A study
it becomes clear that the design, development and
from October 2020 to March 2021 found that
manufacturing of resources and back-office processes
consumers are more digital, more health conscious,
are not part of the value-creation process for customers
more eco-friendly, more price sensitive and want to
(remember, value creation comes from the use or
buy more local. 6
experience of the resource, not from its production).
While these processes are important to enable a
Co-created value orientation customer to create or perceive value, they are not part of
An organisation adopting a co-created value the value-creation process for the customer. We can say
co-created value orientation can adopt the philosophies that these activities provide real value to the company
orientation of market and societal marketing and potential value to the customer, since the customer
The orientation orientations but differs in that can only achieve true value creation through their use
where customers
are part of the value these organisations see value being of these resources.
creation in use and co-created rather than a component of
at the exchange.
the product provided by the producer.

8 PART ONE An introduction to marketing

 Exhibit 1.2 A
 DIAGRAMMATIC EXAMPLE OF HOW TO THINK ABOUT THE CREATION
OF VALUE

Provider sphere Customer sphere

Value-in-use
accumulating
over time
(process)
Design Development Manufacturing Delivery Usage
Back office Front office

Creation of Value-in-exchange Creation of

value-in-exchange as a singular value-in-use
entity in time
(outcome)

Source: Gronroos, C, 2011, ‘Value co-creation in service logic: A critical analysis’, Marketing Theory, 11(3), 279–301: 283; permission conveyed through Copyright Clearance Center, Inc.

Exhibit 1.2 shows this diagrammatically. When the the strength of the company’s relationship with its
customer uses or consumes the resources on offer by customers all over the world.10
the organisation, they can experience value creation The co-creation theory, like most marketing theories,
in use. This process is considered to be in the customer is still developing, but it provides an understanding of the
sphere of influence. You can see in the exhibit that exchange of value that was not possible from previous
the provider sphere (or back-office processes) is where theoretical perspectives, and can give customers and
potential value is created. enterprises a better understanding of how to manage the
The only exception to this rule is when the marketing interface at the point of exchange.
customer is intrinsically involved in these production From this review, you should appreciate that not
activities. In these situations, customers play a role in all organisations are in the business of meeting and
both the provider and the customer spheres of satisfying customers’ needs and wants. Furthermore,
influence. This process is known as the orientation that organisations adopt will influence
co-creation of value co-creation of value. In this case, how they react to the customer and their needs. In
A concept of the value creation is considered to be an the next section, we will look at the impact of an
source of value
that suggests all-encompassing process. organisation’s orientation.
value is created by One company t hat has f ully
customers using
embraced this concept of co-creation
the resources of Who’s in charge?
a company, as of value is The LEGO Group, makers
opposed to value of LEGO-bra nd toys. LEGO has The Internet and the widespread use of social media
being inherent to the
product. recognised that its customers are have accelerated the shift in power from producers and
the greatest resource for innovation, retailers to consumers and business users. This change
and so encourages its online communities to submit began when customers started using catalogues,
ideas for new LEGO projects. If a project gets 10 000 electronics and the Internet to access information,
votes, LEGO will review the idea and create new sets goods and services. Customers use their widespread
based on it, which are then offered worldwide to its knowledge to ‘shop smarter’, leading executives such
market. In return for the idea, the creator is involved as former Procter & Gamble CEO AG Lafley to conclude
in final approval of the design and production of the that ‘the customer is boss’.11
sets, as well as receiving a royalty on sales and being As the use of the Internet and mobile devices
recognised for their input on the product’s packaging becomes increasingly pervasive, the shift of control
and marketing. This approach has not only helped from producer to customer will continue to grow.
LEGO grow its market appeal but has also increased This means that organisations must create strategy

CHAPTER 1 An overview of marketing 9

 from the outset by offering distinct and compelling
resources that are complementary to the customer
value.12 This can be accomplished only by carefully
studying customers and using deep market insights to
inform and guide companies’ outside-in view,13 which
is why most successful businesses today tend to adopt
a market or social marketing orientation.
LO4 How organisations
apply the different
orientations
As we saw in Exhibit 1.1 earlier in the chapter, each
management orientation has a different focus.
The sales and market orientations are those most
commonly adopted by organisations. The customer’s
experience, in terms of the attention they receive and
the delivery of the product, will vary depending on the
orientation adopted by an organisation.
This section reviews several key themes that
distinguish one organisation from another based on
their adopted orientations.
The organisation’s focus
E mployees i n produc t ion- or sa les- or ie nted
organisations tend to be ‘inward-looking’, focusing
on producing or selling what an organisation
makes, rather than thinking about what the market
wants. Historically, companies have successfully
gained competitive advantages by focusing on new
technology, innovation and economies of scale.
These allowed companies to prosper by simply
focusing their effor ts internally on what they
could do better. Today, however, many successful
organisations find themselves operating in markets
where the product is already highly developed,
with little scope for significant improvement,
competitive
so they must instead derive their
advantage competitive adva ntage from an
The idea that ex ter na l, ma rket-or iented focus.
a product’s
characteristics
In the Australian skincare market,
can solve a set of Sukin are loved for their eco-friendly
customer problems sta nce a nd a f fordabi l it y, wh i le
better than any
competitor’s Go-To skincare products have gained
product. success because of the company’s
si mpl ist ic a nd f u n approach to
product. A market orientation, or a derivative such as
societal orientation, helps companies such as Sukin
10 PART ONE An introduction to marketing
and Go-To outperform their competitors in such
an environment. Today, key issues in developing
competitive advantage include co-creating customer
value, maintain ing customer satisfaction and
building long-term relationships. The co-creation
focus means the organisation understands its
product offering does not give value to the customer.
Rather, the customer uses the product to complement
their own resources to develop a product that has
individual value to them. To be successful, the
organisation must understand its customers and
their needs and wants, and appreciate its product
complements the void the customer has and that the
product completes it.
The organisation’s
understanding of customer
value
Production- or sales-oriented organisations equate
customer value with the customer being satisfied
with what they get, rather than getting what they
want. For example, Henry Ford is often quoted as
having once said, ‘Any customer can have a car
painted any colour that he wants, so long as it is
black.’ He was focusing on providing a cheap and
reliable means of transport. Customers had to accept
that variety had to be sacrificed for a cheap car.
For the other orientations, customer value is
traditionally seen as the ratio of customer value
benefits that the customer receives The ratio of benefits to
versus the sacrifices they must make sacrifice of resources
necessary to obtain
to obtain those benefits. The customer those benefits.
determines the value of both the
benefits and sacrifices. Customer value is not merely
a matter of high quality. A high-quality product that is
available only at a high price may not be perceived as
good value; nor will bare-bones services or low-quality
goods selling for a low price. Instead, customers value
goods and services that are of the quality they expect,
and are sold at prices they are willing to pay.
Marketing value can be used to sell a $200 000
luxury car as well as a $5 pizza. To understand
marketing value, the criteria of existence, type,
direction and scale must be considered for any
given targeted market. Let’s consider some of the
key tenets of customer value in the ‘Real World
Marketing’ box.
 Real World Marketing

KEY TENETS OF CUSTOMER VALUE

Marketers interested in customer value ensure they
do the following:
1 Offer products that perform. Product
performance is the bare-minimum requirement.
After grappling with the problems associated

Shutterstock.com/Heather Shimmin
with its Vista operating system, Microsoft listened
to its customers and made drastic changes to
Windows 7, which received greatly improved
reviews. Microsoft’s subsequent release,
Windows 8, had some good features but was not
widely adopted by the public. In 2015, the release
of Windows 10 provided a platform for many
users across a range of devices to come under one operating system. In 2021 Windows 11 was
released, but many PC users are finding their existing hardware is not capable of running the new
operating system. This change in the minimum requirements will either see many upset users or a
long trail of support for Windows 10.
2 Earn trust. A stable base of loyal customers can help an organisation grow and prosper. To attract
customers, eyewear company Specsavers offers two pairs of glasses for one low price and provides special
discounts for kids, students and people over 60. Moreover, the company offers virtual glasses ‘try-ons’,
simple returns and encourages its staff members to do whatever it takes to ensure a smooth and stress-
free customer experience. Specsavers’ focus on earning customers’ trust is evident.
3 Avoid unrealistic pricing. E-marketers are leveraging Internet technology to redefine how prices are
set and negotiated. With lower costs, e-marketers can often offer lower prices than their brick-and-
mortar counterparts. As mobile device usage grows, brick-and-mortar stores are facing customers
who compare prices using their devices and purchase items for less online while standing in the store.
4 Give the buyer facts. Today’s sophisticated consumer wants informative advertising and knowledgeable
salespeople. It is becoming tough for business marketers to differentiate themselves from competitors.
Rather than trying to sell products, salespeople need to find out what the customer needs, which is
usually a combination of goods, services and thought leadership. In other words, salespeople need to
start with the customer needs and work towards the solution.
5 Offer organisation-wide commitment in service and after-sales support. Eyewear retailer Sunglass Hut is
widely known for its company-wide support system. As part of its ‘Perfect Pair Promise’, customers are
offered a lifetime of free personalised adjustments and custom cleaning services. Customer service
agents at each of Sunglass Hut’s 192 locations in Australia are knowledgeable and eager to assist
customers before, during and after a sale, and strive to make the return process as stress-free as
possible. Sunglass Hut also offers ‘Oops Coverage’, a 50 per cent replacement discount promise. This
attention to customer service is carried through to Sunglass Hut’s online store, as well, with free
delivery on all orders within Australia and New Zealand, and free returns within 90 days of purchase.
However, and wherever they place their orders, customers know that Sunglass Hut will support them
throughout, and long after, the checkout process.
6 Co-creation. Many companies are creating products that allow customers to contribute to creating their
own experience. For example, Vistaprint, a printing organisation that produces marketing materials,
makes form-fitting cases for mobile phones, laptops and other personal devices. Customers can
design their cases by uploading photos or by manipulating art from designers using the ‘design with’
feature at Vistaprint. Either way, customers produce unique covers for their devices.
Sources: Inc., 2010, ‘10 ways to support your best customers’, 3 August, http://www.inc.com/guides/2010/07/10-ways-to-support-your-
bestcustomers.html (accessed 16 April 2012); Sunglass Hut, 2021, ‘We offer more than a great pair of shades’, https://www.sunglasshut.com/au/
trends/Perfect-Pair-PromiseP (accessed 24 Feb 2021); Specsavers, nd., http://www.specsavers.com.au/ (accessed 6 July 2015).

CHAPTER 1 An overview of marketing 11

 The organisation’s attitude to
customer satisfaction
As noted earlier, for production- or sales-oriented
organisations, customer satisfaction is not considered,
since they are focused on producing at the most
efficient price or selling whatever is produced. Other
or ientations recog n ise customer
customer
satisfaction as the feeling that a
satisfaction
The feeling that product has met or exceeded the
a product has customer’s expectations. Keeping
met or exceeded
current customers satisfied is just as
the customer’s
expectations. important as attracting new ones –
and a lot less expensive. Organisations
that have a reputation for delivering high levels of
customer satisfaction do things differently from
their competitors. Top management place importance
on customer satisfaction, and employees in these
organisations understand the link between their
job and satisfied customers. The culture of these
organisations is to focus on delighting customers and
delivering products that meets the needs and wants of
customers, rather than on selling products.
In response, clients tend to become loyal to a
product or brand, or both, which is advantageous for
both the customer and the producer. Skincare and
apparel brands often garner loyalty. Fashion brands
that have a strong following can offer pre-order
options for seasonal lines, often leading to a line
being completely sold-out before it has even finished
being manufactured. Good examples of customer
loyalty also occur with technology products such
as smartphones or laptops, which are very personal
items. Apple buyers will camp outside stores to get the
latest Apple device.
Defining the organisation’s
business
Production- and sales-oriented organisations define
their business (or mission) in terms of goods and
services. Market-oriented organisations define their
business in terms of the resources and benefits their
customers seek. People who spend their money,
time and energy expect to receive benefits, not just
goods and services. This distinction has enormous
implications.
When customers predominantly seek benefits
rather than goods and services, there are three
significant advantages:
1 It ensures that organisations keep focusing on
customers and avoid becoming preoccupied with
goods, services or internal needs.
12 PART ONE An introduction to marketing
2 It encourages innovation and creativity by
reminding people that there are many ways to
satisfy customer wants.
3 It stimulates awareness of changes in customer
desires and preferences so that product offerings
are more likely to remain relevant.
Having a market orientation that focuses on
customers’ wants does not mean offering customers
anything they desire. It is not possible, for example,
to profitably manufacture and market car tyres that
will last for 200 000 kilometres for $25. Furthermore,
customers’ preferences must be mediated by sound,
professional judgement about how to deliver the
benefits they seek.
As one traditional adage suggests, ‘People don’t
know what they want – they only want what they
know.’ This traditional mindset suggests consumers
have a limited set of experiences and are unlikely to
request anything beyond those experiences because
they are not aware of the benefits they may gain from
other potential offerings. For example, before the
Internet, many people thought that shopping for some
types of products was boring and time-consuming but,
because the concept of electronic shopping didn’t yet
exist, they could not express their need for it as an
alternative. However, this thinking goes to the first
tenant of marketing value, which asks: Is the product
valuable to the customer?
Identifying the product’s target
audience
A sales-oriented organisation targets its product
at ‘everybody’ or ‘the average customer’, while a
production-oriented organisation does not target
anyone; it simply produces the most efficient product
for the whole market. A market-oriented organisation
aims at specific groups of people. The fallacy of
developing products directed at the average user is that
relatively few ‘average users’ actually exist. Typically,
populations are characterised by diversity. Because
most potential customers are not ‘average’, they are
unlikely to be attracted to an average product marketed
to the average customer. Consider the market for
shampoo as one simple example. There are shampoos
for oily hair, dry hair and for treating dandruff. Some
shampoos are marketed for curly, fine or treated hair.
There are even special ‘delicate’ shampoos for babies
and ‘fun’ shampoos for children.
Market-oriented organisations recognise different
customer groups with different features or benefits,
for which they may need to develop different goods,
services and promotional appeals. They carefully
analyse the market and divide it into groups of similar

Shutterstock.com/Minerva Studio
When you understand marketing, you can achieve better
value outcomes from the products you buy.
people in terms of selected characteristics. They
then develop marketing programs that will bring
about mutually satisfying exchanges with one
or more of these groups. For example, Redcat
Industries, established in 2000, focuses on wheel
safety products for large vehicles. This simple but
essential product allows heavy vehicle drives the
ability to check the wheels are remaining tight in
the axels with a simple inspection of the wheel hub.14
This product saves time and lives, but also saves
money for the fleet operators.
iStock.com/vkp-australia
Heavy vehicle drivers can inspect wheel security by looking
at the links.
The organisation’s
primary goal
A produc t ion-or iented orga n isat ion ach ieves
profitability by reducing cost, while a sales-oriented
organisation seeks to achieve profitability through
sales volume and tr ying to convince potential
customers to buy, even if the seller knows that the
customer and the product are mismatched. Sales-
oriented organisations place a higher premium
on making a sale than on developing a long-term
relationship with the customer. In contrast, a
marketing-oriented organisation’s ultimate goal
is to make a profit by presenting resources to help
customers co-create value, providing customer
satisfaction and building long-term relationships
with customers. An exception to the profit goal is
non-profit organisations that exist to achieve goals
other than profits, but still want to achieve the goals
of creating customer value, by providing customer
satisfaction and building long-term relationships
with customers. Non-profit organisations can,
and should, adopt a market or societal marketing
orientation and acknowledge the importance of
co-created marketing value.
The sales tools the
organisation uses
A production-oriented organisation will use sales
tools to present their products to the market. Sales-
oriented organisations seek to generate sales volume
through intensive promotional activities, mainly
personal selling advertising. In contrast, market-
oriented organisations recognise that promotional
decisions are one of the basic marketing mix
decisions (all elements of the marketing mix are
discussed later in the text; see, in particular, the
chapters in Part 3). The mix elements are product
decisions, place (or distribution) decisions, promotion
decisions and pricing decisions. A market-oriented
organisation recognises that each of the four
components is important. Furthermore, market-
oriented organisations accept that marketing is not
just the responsibility of the marketing department.
Skills and resources throughout an organisation are
needed to create, communicate and deliver superior
customer service and value elements.
Exhibit 1.3 summarises the key differences
between organisations that take on production, sales,
market, societal or co-created orientations.
CHAPTER 1 An overview of marketing 13
 Exhibit 1.3 C
 OMPARISON OF PRODUCTION-, SALES-, MARKET-, SOCIETAL- AND
CO-CREATED-ORIENTED ORGANISATIONS

Production- Sales-oriented Market-oriented Societal-oriented Co-created-oriented

oriented
The focus of the Tend to be inward-looking, focusing Tend to be outward- Tend to be outward looking, Tend to be outward-
organisation on how to produce or sell more looking, focusing on what focusing on the needs and looking, focusing on what
effectively customers are looking for wants of customers and customers are looking for
society
Perception of Value determined by the organisation Value determined by the Value determined by the Suppliers provide
customer value – the customer is expected to be customer customer and society resources that are
satisfied with the product that is most used by the customer
efficient to produce to complement their
resources for the
development of value
Approach to Not considered – the focus is on The high value placed on The organisation’s focus The high value placed on
customer producing or selling efficiently customers feeling that is on satisfying the needs customers feeling that
satisfaction their expectations have of the customer while their expectations have
been met ensuring the actions been met
taken are consistent
with or exceed society’s
expectations
Definition of the Business defined in terms of goods Business defined in terms Business defined in terms Business defined by the
organisation's and services of the benefits their of the customer’s and alignment of resources
business customers seek society’s expectations with the customers
The target audience Targets Targets nobody – Targets specific groups of Targets specific groups of Targets specific groups of
of the product ‘everybody’ or ‘the produces the customers customers customers
average customer’ most efficient
product for the
whole market
The primary goal of To achieve To achieve To achieve profitability To achieve organisational Achieving organisational
the organisation profitability by profitability by creating customer goals by creating goals through the
reducing cost through sales value, providing customer customer value, customer complementary
volume satisfaction and building satisfaction and building integration of resources
long-term relationships long-term relationships with customers
with customers with customers, while
ensuring the organisation's
practice is not detrimental
to society
Sales tools used Seek to generate sales volume Use a combination of Use a combination of Use a combination of
through intensive promotional the four elements of the the four elements of the the four elements of the
activities, mainly personal selling and marketing mix: product marketing mix: product marketing mix: product
advertising decisions, place (or decisions, place (or decisions, place (or
distribution) decisions, distribution) decisions, distribution) decisions,
promotion decisions and promotion decisions and promotion decisions and
pricing decisions pricing decisions pricing decisions

relationships with existing customers directly

Building relationships addresses two of the three possibilities and indirectly
The best companies view attracting new customers as addresses the other.
the launching point for developing and enhancing a Relationship marketing is a relationship
long-term relationship. But attracting new customers strategy that focuses on keeping and marketing
to a business is only the beginning. Companies can improving relationships with current A strategy that
focuses on keeping
expand market share in three ways: attracting new customers. It assumes that many and improving long-
customers, increasing business with existing consumers and business customers term partnerships
with customers.
customers and retaining current customers. Building prefer an ongoing relationship with

14 PART ONE An introduction to marketing

one organisation rather than continually switching
among providers searching for value. Virtual Legal
is a fixed fee online law firm established in 2013 that
offers legal services to people around Australia via a
client portal company and their client, regardless of
their location or financial circumstances. In addition,
the portal provides the client with a permanent
place where all their legal transactions and records
can be stored safely – thus creating an ongoing link
to or relationship with the client. This long-term
focus on customer needs is a hallmark of relationship
marketing.
Most successful relationship marketing strategies
depend on customer-orientated personnel, effective
training programs, employees with authority to make
decisions and solve problems, and teamwork.
The Internet
The Internet is an effective tool for generating
relationships with customers because of its ability
to interact with the customer. Companies can use
various tools such as emails, social media and
website live chat software for fast customer service,
discussion groups for building a sense of community
and database tracking of buying habits to customise
products to their customers.15
Customers also benefit from stable relationships
with suppliers. Business buyers have found that
partnerships with their suppliers are essential to
Rewards programs encourage customers to become loyal to a specific product or organisation
and reward them for their continuing patronage.
producing high-quality products while cutting costs.16
Customers remain loyal to organisations that provide
them with greater value and satisfaction than they
expect from competing organisations. This value and
satisfaction can come in various forms, ranging from
financial benefits to a sense of wellbeing or confidence
in a supplier, and structural bonds.17
Rewards and loyalty programs
Rewards programs are an example of financial
incentives to customers in exchange for their
continuing patronage. For example, supermarket
g ia nt Coles of fers a Coles Flybuys prog ra m,
allowing customers to earn redeemable points for
their purchases and exclusive discounts instore
and online. Other examples include Priceline’s
Sister Club and Myer’s Myer One. These programs
encourage customers to become loyal to specific
organisations or brands and ‘reward’ them for this
behaviour.
A sense of wellbeing occurs when a customer
establishes an ongoing relationship with a provider,
such as a medical practitioner, a hairdresser or
an accountant. The social bonding that takes
place between provider and customer involves
personalisation and customisation of the relationship.
Organisations can develop these bonds by referring to
customers by name and providing service continuity
through the same representative.
Courtesy of Qantas
CHAPTER 1 An overview of marketing 15
 LO5Why study
marketing?
Now that you have been introduced to the meaning
of the term marketing, and to how the elements of
marketing are put into effect by organisations, you
may be asking, ‘What’s in it for me?’ or ‘Why should I
study marketing?’ These are good questions.
Shutterstock.com/Monkey Business Images
There are many jobs in marketing, and over the next
decade, there will be new jobs that do not exist today.
There are several important reasons to study
marketing, even if you are not undertaking a
Marketing degree and are instead studying another
field, such as accounting or finance, journalism,
nursing or graphic design. This is because marketing
plays a major role in society, is essential to the
success of businesses, offers outstanding career
opportunities and affects your life as a consumer
every day.
Marketing plays an important
role in society
The Australian Bureau of Statistics predicts that the
Australian population will reach between 37.4 and
49.2 million people by 2066.18 Think about how many
transactions will be needed each day to feed, clothe
and shelter a population of this size. The number is
huge. And yet these consumers’ needs should be
met, partly because of the well-developed economic
systems in place that efficiently distribute the output
of farms and factories. Suppose you take the example
of food purchases. In that case, marketing helps to
make food available when we want it, in the desired
quantities, at accessible locations and in hygienic and
convenient packages and forms (such as instant and
frozen foods).
16 PART ONE An introduction to marketing
Marketing is important to
businesses
The basic objectives of most organisations are
survival, profits (cost minimisation) and growth.
Marketing contributes directly to achieving these
objectives. Marketing includes the following activities
vital to business organisations:
•• assessing the needs, wants and satisfaction
criteria of present and potential customers
•• designing and managing product offerings
•• determining price and pricing policies
•• developing distribution strategies
•• communicating with present and potential
customers, and as we see from the pandemic
experience, the means to be agile and respond to
changing customer needs.
A l l bu si nesspeople, rega rd less of t he i r
specialisation or area of responsibility, need to be
familiar with the terminology and fundamentals of
accounting, finance, management and marketing.
People in all business areas also need to be able
to communicate with specialists in other areas.
Furthermore, marketing is not just a job done by
people in the marketing department; marketing is a
part of the job of everyone in the organisation.
Marketing offers outstanding
career opportunities
There are many jobs in Australia and New Zealand
that are marketing-focused because the service
sectors of both countries are very strong. Marketing
offers excellent career oppor tunities in such
areas as professional selling, market research,
advertising, public relations, services, retail buying,
distribution management, product management,
product development, wholesaling and information
technology. The Australian Marketing Institute
(see http://www.ami.org.au), the Public Relations
Institute of Aust ralia (http://www.pria.com.
au) and the Research Society (various; https://
researchsociety.com.au/) publ i sh resou rces
that provide extensive information about career
oppor tunities in marketing. Marketing career
opportunities also exist in various non-business
organisations, including healthcare, museums,
universities, the armed forces and various government
and social service agencies.
As t he global ma rketplace becomes more
challenging, all organisations regardless of size will
need to become better at marketing, and the people in
those organisations need to become better marketers.
Statistics show that small business accounts for more
than 88 per cent of all jobs in Australia.19 Regardless of
your job title or activity, you will need to market your
products to the world, and employees with marketing
skills will be highly regarded.
Marketing is important to you
Marketing plays a major role in your everyday life.
You take part in the marketing process every day
as a consumer of goods and services. About half of
every dollar you spend pays for marketing costs,
such as marketing research, product development,
packaging, transportation, storage, advertising
a nd sa les ex penses. By developi ng a bet ter
understanding of marketing, you will become a
better informed and more discriminating consumer,
you will better understand the buying process and be
able to negotiate better with sellers. Moreover, you
will be better prepared to demand satisfaction when
the products you buy do not meet the standards
promised by the manufacturer, service provider or
marketer.
CHAPTER 1 An overview of marketing 17
 2 The external environment – the focus of this chapter –

ETHICS AND are the environmental components that a marketing

manager or an organisation cannot control. It is essential

THE MARKETING for marketing managers to continuously review what is

happening globally to isolate changes that could impact

ENVIRONMENT their organisation’s products or provide an opportunity.

The art and practice of marketing do not operate
in isolation. Marketing is a practice adopted by
organisations to manage their presence in the market.
However, marketing practice must also function within
society. Therefore, these events and forces implicitly
influence the application of marketing in an environment
beyond their control.
Marketing provides the conduit between the outside
world and the organisation’s internal operations.
Learning Objectives While other disciplines manage the operational
practices within the organisation, marketing
LO1 Discuss the effects of ensures that the product offering by the
external marketing organisation is complementary to the needs
Managers can control the
environments on marketing mix, but they
of the marketplace and the environment.
organisations. cannot control elements in In this chapter, we explore the
the external environment. environmental forces that typically
LO2 Describe the
influence the strategies and practices of
sociocultural factors that organisations as they adapt for the future.
affect marketing. Organisations must explore environmental
LO3 Explain the importance of forces in all disciplines to operate today and
the demographic environment in future environments, minimise poor decisions
and understand current and future trends.
including changing family types and
multiculturalism.
LO4 Identify consumer and market reactions
to the economy.
The external
LO1
LO5 Identify the impact of technology on an
organisation. marketing environment
LO6 Explain the basics of foreign and The marketing mix was briefly introduced in Chapter 1
domestic competition. (see ‘The sales tools the organisation uses’), but
it is not related to the external environment. This
LO7 Discuss the political and legal
relationship is explored in this chapter. This section
environment of marketing.
explores how organisations ref lect upon and use
LO8 Discuss a range of ethical theories that the external marketing environment as a source
relate to the marketing environment. of information to help understand and develop an
organisation’s strategies.
The following section will look at the external
environment that the marketer cannot control
but which impact the market. The marketer needs
to be aware of these changes to develop strategy
and daily operations. These environmental forces
include awareness of how markets mature, with new
consumers becoming part of the target market while
others drop out. Those who remain may have different
tastes, needs, incomes, lifestyles and buying habits
from the original target consumers.

18
 Exhibit 2.1 shows t he cont rol lable a nd their market, how well they understand the nature of
uncontrollable variables that affect the target the change and what they do to respond to the change.
market, whether the market is other organisations or The following four factors help us to understand
final consumers. The uncontrollable elements on the the external environment.
outer edges of the diagram continuously evolve and
create changes to and influence the target market. Factor 1: Understand current
In contrast, managers can shape and reshape the customers
marketing mix depicted by the blue circle in Exhibit 2.1
– to influence the target market. You must first understand how customers buy, where
Unless the marketing managers understand the they buy, what they purchase and when they buy.
external environment, they cannot help the organisation In understanding current customers, marketers also
plan knowledgeably. Thus, many larger organisations need to understand what opinions they share. There
assemble a team of specialists to collect and evaluate are many ways to capture the voice of the customer,
environmental information. This and one predominant way is through market research.
process is called environmental The Scanlon Foundation Sur vey has been
environmental
scanning. The goal in gathering the undertaken since 2007 and seeks to determine issues
scanning
environmental data is to identify future that are of the greatest concern in the community.
The collection and
interpretation of market opportunities and threats. In 2020, of the 55 000 survey respondents, 63 per
information about
For example, technology continues cent selected the COVID-19 pandemic as the ‘most
forces, events and
relationships in the to blur the line between personal important problem’ facing Australians, followed by
external environment
computers, digital television, the the economy (at 15 per cent) and climate change (at
that affect the
organisation’s Internet and other smart mobile 5 per cent).1 A more recent trend that organisations
future or the
devices. As a result, Sony may must embrace is voice search. With the growth of the
implementation of its
compete against companies previously Internet of Things (IoT) and the improving accuracy of
marketing plan.
considered as servicing different voice recognition apps such as Siri, Google and Alexa,
markets, such as Hewlett-Packard, Microsoft and LG, to name a few, customers are using voice search to find
and telecommunications companies such as Telstra and explore brands. Organisations need to ensure the
and Optus. Whether this is considered to be an brands are easily found but, more importantly, allow
opportunity or a threat to Sony’s marketing managers voice searching once the customer has landed on the
will depend on how early they recognise this shift in home page.

Exhibit 2.1 C
 ONTROLLABLE AND UNCONTROLLABLE VARIABLES THAT AFFECT THE
TARGET MARKET

Uncontrollable

Controllable
Economic
environment
Competitive
environment
Product Distribution
strategies strategies

Target
Ethics market
Integrated Technological
marketing environment
communication Pricing

strategies strategies

Sociocultural
environment Political and legal
environment

Source: Based on Australian Bureau of Statistics data

CHAPTER 2 Ethics and the marketing environment 19

 Factor 2: Understand what
drives consumer decisions
The Australian banking sector has seen a marked
turnaround in its views of and services for customers
at its many branches. Before electronic banking, local
branches served customers’ needs, built relationships
and conducted fundamental organisation processes.
Electronic banking aimed to get the day-to-day
transactions out of the branch and administered
online. However, this created a rift in the relationship
between the sector and its customers, further
exacerbated with the banking sector using offshore
call centres. Then in 2019, the Banking Royal
Commission identified many areas detrimental to
the customers and needing improvement. Australian
Banking Association CEO Anna Bligh recognised that
‘Australians expect better from their banks, and more
than that, they deserve better’. 2
However, with COVID-19 in 2020, the banking
sector found they could embrace their reforms
and offer their service online, which helped many
customers exist in a trying time. Today we see many
customers are now comfortable with the digital-
dominant service offering.
Factor 3: Identify the most
valuable customers and
understand their needs
Often, 20 per cent of an organisation’s customers can
produce 80 per cent of the organisation’s revenue.
For example, a microgreens company had a thriving
business. The organisation was so successful it either
had to increase the size of the premises and staff or let
some customers go. As an exercise in understanding,
the company reviewed its customers’ current and
potential needs and the current and future value
they could bring to the organisation. The results
identified that 20 per cent of the company’s clients
were generating 80 per cent of its income. Another
20 per cent had the potential to grow the organisation,
and thereby have a greater need and provide greater
viability for the organisation. The microgreens
company decided to remain the same size and notified
60 per cent of its existing customer base that it could
no longer offer them the same service level they had
been receiving. Most of the 60 per cent left for other
providers. The ones that remained were willing to
accept lesser service, and the most valuable customers
received exceptional service.
20 PART ONE An introduction to marketing
Factor 4: Understand the
competition
Successful organisations know their competitors and
attempt to forecast their competitors’ future moves.
Competitors threaten an organisation’s market
share and its profitability. Take the example of the
smartphone market. In 2021 Samsung regained the
top global smartphone market share with 20.3 per
cent, followed by Apple 15.5, Xiaomi 12.9, Oppo 10.2,
Vivo 10.2 and others 30.9. 3 The figures show the
competitiveness of the market and the diversity of
players in the market. The volatility of the market
share changes each quarter with the launch of new
products. A new launch by any major player will see
the market react quickly, with changes in the market
share. Samsung’s reign in the top position in 2021
was on the back of having 16.8 per cent and Apple
20.8 per cent in the previous quarter. The launch in
the following quarter allowed Samsung to regain
top spot. However, in a later quarter when Apple
releases its new product range it is likely Apple will
have dominance. Understanding the variability of the
market and the timing of product launches will change
the global market share.
Once a n orga n isat ion has a fou ndat ion
understanding of these four factors, it is well
positioned to explore and manage the environmental
forces.
Environmental management
In general, no one organisation is large or powerful
enough to create substantial change in the external
environment. Thus, marketing managers typically
adapt to change rather than being agents of change.
However, an organisation is not always entirely at
the mercy of all external environmental elements, and
it can sometimes influence an external event. For
example, the political environment is open to
inf luences from organisations or sections of the
community. This inf luence is seen clearly in
government election periods, where government and
opposition policies change rapidly in response to
community sentiment. Therefore, when a company
implements strategies that attempt to shape the
external environment within which it
operates, it engages in environmental environmental
management. management
W he n e x a m i n i n g e x te r n a l When a company
implements
opportunities and threats, marketing strategies that
managers must analyse aspects of the attempt to shape
the external
marketing environment. Marketers environment within
will commonly use tools such as which it operates.
PESTLE analysis
PESTLE analysis, internal factor tools available to help the market analyst define and
An approach for evaluation (IFE) and external factor describe the market. We will explore these factors
reviewing the evaluation (EFE) matrices, and other more fully in Chapter 15 Marketing strategy and
macro environment
forces (Political,
techniques to consider an organisation’s planning.
Economic, Social, strengths and weaknesses (internal to We will now look at the leading forces in the
Technological, Legal an organisation) and opportunities and external environment that are impor tant for
and Environmental).
threats (external to an organisation). marketing managers. These are sociocultural,
internal scanning It is common to discuss internal demographic, economic, technological, competitive
The process scanning when looking at the external factors, and political and legal. We will also consider
of scanning an
organisation environment. the issues of ethics and morality and how this
for threats and The internal scanning considers inf luences the way an organisation looks at the
opportunities,
as well as other i ss ue s s uc h a s t he f i n a nc i a l external and internal environmental forces.
information that considerations, manager ial style,
may create a clear
cor porate culture and geographic
and comprehensive
picture of the dispersion of an organisation. To LO2The sociocultural
he lp w it h t hese r e v ie w s a nd
environment
organisation as an
overall entity.
understand the internal environment,
some organisations use organisation Social change is perhaps the most difficult external
por t fol io a na lysis a nd ma rket at t ract iveness variable for marketing managers to forecast,
analysis techniques. While you need to be aware influence or integrate into marketing plans. Social
that these market analysis techniques exist, you do factors include our attitudes, values and lifestyles. In
not, at this stage, need to be able to implement them. addition, social factors influence the products people
They are, after all, only some of the multitude of buy, for example, the value people determine a product

Exhibit 2.2 T
 WENTY YEARS OF POPULATION CHANGE

Population distribution, by sex and age groups – 2000 and 2020

Age group (years)

85+
80–84
75–79
70–74
65–69
60–64
55–59
50–54
45–49
40–44
35–39
30–34
25–29
20–24
15–19
10–14
5–9
0–4
5 4 3 2 1 0 0 1 2 3 4 5

Males 2000 (%) Males 2020 (%) Females 2000 (%) Females 2020 (%)
Source: ABS, 2020, ‘Twenty years of population change’, 17 December, https://www.abs.gov.au/articles/twenty-years-population-change (CC BY 4.0)

CHAPTER 2 Ethics and the marketing environment 21

 to have, the effectiveness of specific promotions, and sociocultural aspects of the environmental scan,
how, where and when people expect to purchase which we will now discuss.
products.
We begin the review of the sociocultural Baby boomers:
components by considering age. That is, we classify demanding change
people according to when they were born. Marketers
recognise that people born within specific year Baby boomers are identified as people Baby boomers
brackets tend to have similar behaviour and that their born after the Second World War and People born
behaviour differs from those born in other years. We before the 1960s (see Exhibit 2.3). This between roughly
1946 and 1964.
will consider the following five generations in detail: cohort created a blip in the age-group
pattern of the population, as more
•• ‘Baby boomers’ – born between 1946 and 1964.
people were born during this period than in any other
•• ‘Generation X’ – born between 1965 and 1979.
prior or subsequent period. A second blip, about one-
•• ‘Millennials’’ (Gen-Y) – born between 1980 and fifth the size, represents Generation X, which we will
1994. explore later.
•• ‘Generation Z’ – born between 1995 and 2009. The impact of the baby boomers over the past
•• ‘Generation Alpha’ – born between 2010 to 60 years in Australia and New Zealand has been quite
present. substantial. In the 1960s, the hippie and civil-rights
While it is helpful to appreciate the unique movements were the foundation of the baby boomers
characteristics of the various age cohorts, it would in their young-adult years.
be unrealistic to consider that all baby boomers, In the 1970s, the baby boomers moved into the
for example, will react in the same way in all family-forming phase of their life cycle, forcing
circumstances. If this were the case, nationality, politicians to address their need for better family
religion and culture would have no impact or influence care and facilities for young children. In the 1980s,
on the decision-making processes of individuals. the baby boomers were the captains of industry and
Therefore, a good marketer needs to consider other rode the wave of greed and self-indulgence. Their

Exhibit 2.3 A
 BS GRAPHIC SHOWING AUSTRALIAN EVENTS AND THE YEAR-OF-BIRTH
CLASSIFICATION

Cold War

World War I World War II Korean War

(1914–18) (1939–45) (1950–53)

Strong economy Depression Strong economy

Federation (1901)
Sydney White Australia
Women get the Spanish flu Harbour Bridge Polio epidemic Snowy Mountains Policy repealed
vote (1902) epidemic (1919) opened (1932) (1938) scheme (1949) (1958)

1900 1910 1920 1930 1940 1950

Oldest generation Lucky generation Baby boomers

Cold War
Vietnam War Gulf War
Iraq War
(1962–73) (1990–91)

Strong economy Economic downturn Strong economy

Aboriginal people included No fault divorce
Post-war migration in the Census (1971) (1975)
Television (1956) Credit cards Computers Internet Mobile phones

1960 1970 1980 1990 2000 2005

Baby boomers Generations X and Y iGeneration

Source: Based on Australian Bureau of Statistics data; see http://www.abs.gov.au/AUSSTATS/abs@.nsf/lookup/4914.0.55.001Main%20Features5May%202009.

22 PART ONE An introduction to marketing

 families were now older, and both partners were in the
workforce, meaning that dual-family incomes became
the norm, and families became less important than
careers.
By the 1990s, the baby boomers found that
material things were not as important to them as they
had been in the 1980s, and they once again began to
focus on developing family and community. In the
new millennium, the baby boomers are looking at
retirement and the meaning of life.
As this discussion shows, the baby boomers have
changed their values and attitudes as they have aged,
resulting in shifts in cultural norms (see ethics and
morality at the end of this chapter). These changes
have affected the marketing strategies adopted by
organisations.
This group cherishes convenience, which has
resulted in a growing demand for home delivery of
items such as large appliances, furniture and
groceries. In addition, the spreading culture of
convenience explains the tremendous appeal of, for
instance, prepared takeaway foods and smartphones.
Organisations offer the individualistic baby boomers
a growing array of customised products, services,
houses and retirement villages, cars, furniture,
appliances, clothes, holidays, jobs, leisure time and
even beliefs.
The importance of individualism among baby
boomers led to a personalised
personalised economy, which requires successful
economy orga n isat ions to del iver good s
Delivering valued a nd ser v ices at good value on
goods and services
on demand. demand. To do this, organisations
must understand their customers
exceptionally well. The intimacy between producer
and consumer is precisely what makes an economy
personalised. Characteristics of the personalised
economy include the following elements:
•• Customisation: Products are custom-designed
and marketed to ever-smaller target markets.
•• Immediacy: The immediate delivery of goods and
services is at the consumer’s convenience rather
than the provider.
•• Value: Orga n isat ions need to be va lue-
competitive or to create innovative products that
can command premium prices.
In review, the baby boomers are concerned with
their children, their jobs and their retirement.
Nevertheless, some things will never change. They
are a little selfish about their leisure time, a little
careless about how they spend their money, remain
suspicious of the status quo and love rock’n’roll.
Generation X: savvy and
cynical
The second age cohort that marketing
Generation X
managers have defined is Generation
People born
X. This is the first generation of between roughly
latchkey children – products of dual- 1965 and 1979.
career or single-parent households.
This group entered the workforce in the era of
downsizing and downturns, so its members were
likelier than the previous generation to be unemployed
or underemployed. On the other hand, many have a
higher education, and because multiple media have
bombarded them since the cradle, they are perceptive
and cynical consumers.4
Members of Generation X don’t mind indulging
themselves. They devote a larger-than-average share
of their spending dollars to restaurant meals, alcoholic
beverages, clothing and the latest electronic items. 5
They are more materialistic than previous generations
but have less expectation of achieving their goals.
Perhaps this combination of high aspirations,
high education levels and low expectations makes
Generation X such a challenge for marketers. They are
a group that don’t like being marketed to.6
Generation Y (Millennials):
born to shop
The next cohort we will look at is Generation Y
Generation Y, also referred to as People born
‘Millennials’. Although Generation Y between roughly
1980 and 1994.
is much smaller than the baby boomer
cohort, they are plentiful enough to
put their footprints on society. Generation Y-ers were
born into a world vastly different from that of their
parents. The changes in families, the workforce,
technology and demographics have affected their
attitudes in recent decades, but in ways unpredictable
to marketers.
Generation Y is also driving the educational
software industry, whose products are designed to
help infants as young as six months learn to identify
numbers, shapes, colours, words and body parts. While
they have grown with the changing digital world,
they are not quite digital natives, as is the following
generation. They are adopters of digital technology,
like the rest of us, but their adoption differs from
earlier generations. They tend to be more tech-savvy
and typically spend more time online and on social
media than they do watching television, listening to
the radio or reading newspapers – although they still
use traditional media.
CHAPTER 2 Ethics and the marketing environment 23
 They expect brands to have a presence on social
media. They are comfortable using social media and
tend to use photo/video-focused social applications
such as Instagram and Snapchat almost as much, if
not more than, text-based apps.
In response to this unique set of needs, we can see
apparel manufacturers are also targeting the older,
employed Generation Y crowd. This sector is about
sharing leadership and asking, ‘Why?’ These people
are quietly rebellious, reflected in their dress sense
and, of course, by being online via several mobile
devices.
Shutterstock.com/Dean Drobot
Although smaller in number than the baby boomers,
Generation Y has already had a significant impact on how
companies market to families and young adults.
Generation Z or iGeneration:
the silent generation
Generation Z has grown up with
Generation Z
the digital world. Synergy among
People born between
1995 and 2009. entertainment, study and work
intermingle. Like Generation Y,
this generation is ‘on’ all the time; communication
is not constrained by time or location. For them,
digital music players are their norm, on-demand TV
and movies are the expectation, and environmental
concerns are everyday issues. This generation is
likely to be optimistic, well informed and without any
political and social stigmas that affected the thinking
24 PART ONE An introduction to marketing
and value systems of their parents (Generations X and
Y) and grandparents (baby boomers).
These children and young adults have a significant
influence on family purchases. Many organisations
provide products that meet their needs, over and above
the essential requirement to purchase the product. For
example, carmakers provide multi-purpose and sport
recreational vehicles with built-in child seats and
audio-visual equipment. Equally, hotels and cruise
liners offer kids’ programs, while shopping centres,
furniture stores and even supermarkets provide
on-site babysitting. Restaurants are setting out
crayons, installing changing tables in restrooms and
offering more takeaway services to serve Generation Z
children in families.
Generation Alpha
Not much is yet known about the Generation Alpha
demography of Generation Alpha, People born
except that most of the technological between 2010 to
present.
changes that have occurred over
the lives of the baby boomers are
irrelevant to this group. Yet, marketers have not quite
worked out what makes this group tick commercially,
but since its oldest members are still in their teens,
there is time to reflect on this.
This group will grow up with access to information,
opinions and sophistication well beyond their years
and the purchasing power to match. In addition,
many of the products they purchase as youngsters
will continue to be bought for decades. Mobile devices
account for 41 per cent of all screen time.7 Apps
have resulted in young appetites for quick, tailored
engagement that is also sharable. In 2020, the highest
paid YouTube star was nine-year-old Ryan Kaji. His
YouTube channel ‘Ryan’s World’, which has over
30 million subscribers, targets his fellow Generation
Alpha members with a variety of ‘unboxing’ videos
and vlogs. Many merchants are striving to be more
relevant in this capacity of sharing experiences among
younger consumers. With so many needs, marketers
have targeted a broad array of goods and services at
this generation. At the same time, they establish a
young lifestyle and want to make their looks reflect it,
meaning they are more interested in what is on-trend
and relevant to their idols than in what name is on
the label.
How social media have changed Growth of component lifestyles
our behaviour A lifestyle is a mode of living; it is the
component lifestyle
Social media allow for creating and exchanging user- way people decide to live their lives.
The practice of
generated content and encompass many formats and Component lifestyle recognises the choosing goods
sites, such as TikTok, YouTube, Twitter, WhatsApp, various components in people’s lives and services meets
one’s diverse needs
Instagram, Facebook and Pinterest, each serving that meet their diverse needs and and interests rather
a different function (see Chapter 16.) These media wants. These components, in turn, than conforming to
have changed the way we communicate, keep track influence the goods and services people a single, traditional
lifestyle.
of others, browse and review goods and services, and select to meet their specific needs and
make purchases. Today, social networking is a part wants. This is quite different from the
of regular life for people of all ages. rather traditional view of stereotyping people. For
But it isn’t the number of Australians using social example, one may have considered an accountant to
media platforms that shows how deeply they have be typically dull. This is a stereotype, and these days
become ingrained in everyday life – it is the frequency marketers try to take a more nuanced approach and
with which they use them. Exhibit 2.4 shows a recognise that there may be an accountant who is into
breakdown of the data from the Yellow survey. extreme sports, has a full and active social life, is a
Social networking has ‘changed the game’ when it gourmet cook and a dedicated single parent.
comes to opinion sharing. Now, consumers can reach Each of these lifestyles is associated w ith
many people with their views and respond to brands different goods and services and represents different
and events in real-time. Facebook still registers as target markets. For example, marketers offer the
the most popular of all social media, but with a trend gourmet, cooking utensils, wines and exotic foods
towards the older categories. It is no surprise that it is th rough magazines such as Gourmet Traveller.
considered a valuable resource marketer. The f it ness ent husiast buys Ni ke equ ipment
So, what does this mean for organisations? and special jogging outfits and reads health and
Because people are online more often, there are more fitness magazines. Component lifestyles increase
opportunities for contact, interaction and dialogue. the complexity of consumers’ buying habits. The
With 32 per cent of social media users following accountant may own a BMW but change the oil
brands and organisations, 20 per cent accessing himself or herself. He or she may buy fast food for
offers and promotions and another 19 per cent lunch but French wine for dinner, own sophisticated
researching products and services they already want photog raphic equipment and no mobile med ia
to purchase, Australians are receptive to engaging devices, and shop for socks at Kmart or Big W and
with organisations through social media. 8 suits or dresses at Hugo Boss.

Exhibit 2.4 S
 OCIAL MEDIA USAGE, BY AGE AND GENDER, ACROSS AN AVERAGE WEEK
Q: In a typical week, how many times would you use [platform]?

Average uses Gender Age

per week
Male Female 18–29 30–39 40–49 50–64 +65
Facebook 25.8 32.7 35.2 34.6 29.9 25.9 20.4
YouTube 22.2 22.8 31.2 25.0 20.9 15.5 12.6
Instagram 21.7 31.3 36.2 28.3 23.4 19.2 7.7
LinkedIn 10.9 14.2 20.7 12.3 10.4 9.5 5.2
Pinterest 13.9 15.8 20.6 15.8 11.5 13.7 8.8
Twitter 19.8 18.3 21.0 20.1 18.4 21.0 9.1
Snapchat 21.7 29.3 33.2 23.0 17.5 15.2 2.8
TikTok 13.2 29.8 31.8 13.2 23.5 6.0 4.0
Source: Hello Social. Social Media Usage In Australia (and Beyond), http://www.hellosocial.com.au/

CHAPTER 2 Ethics and the marketing environment 25

 Real World Marketing

IMPACT OF CULTURAL CHANGES

The changing face of Australia’s and New Zealand’s populations has seen a marked change in how
we behave, what we eat, what we purchase, what we believe and how we conduct our lives (or
our life philosophies). This change requires the marketer to be aware
of cultural changes and adapt the goods and services offered and the
communication processes adopted in presenting those products to
the market. An example of these changes is the rejection of super-
slim models and demands for advertising to feature more realistically
sized models. Lingerie brand Victoria’s Secret is responding to such
changes by moving away from clichéd ‘perfect’ angels and injecting
more diversity and inclusivity into its campaigns. In 2019, the brand
hired its first plus-size model, Ali Tate Cutler. In 2020, the brand hired
Getty Images/ LOIC VENANCE/AFP

its first transgender model, Valentina Sampaio. More recently,

Victoria’s Secret used nine-month-pregnant model Grace Elizabeth for
its Mother’s Day campaign, all in an effort to redefine its image as an
inclusive and diverse brand.
Source: Maheshwari, S and Friedman, V, 2021, ‘Victoria’s Secret swaps Angels for “what women
want.” Will they buy it?’, New York Times, 16 June, https://www.nytimes.com/2021/06/16/business/
victorias-secret-collective-megan-rapinoe.html

The unique lifestyle of every consumer can require
a different marketing mix. Sometimes blending
products for a single target market can fail. Component
lifestyles have evolved because consumers can
choose from a growing number of goods and services
and because many have the money to exercise more
options. Rising purchasing power has resulted from
the growth of dual-income families, providing more
disposable income, in addition to society’s overall
increased wealth. The increase in childcare subsidies
allowing the family primary carer to go back to work
has probably had a greater effect on marketing than
any other social change, including the changing roles
within families.
Following on is the consequential change in the
character of families, which we will describe in the
following section.
LO3 The demographic
environment
Demography is studying people’s descriptive statistics,
The changing character of
families
The traditional family structure of mother, father
and two children is on the decline, representing a
little over 35 per cent of modern Australian families.
Families are also decreasing in size. Since 1911, the
average family size has decreased from 4.5 people to
2.6 people. 9 Furthermore, women’s participation in
paid work has increased considerably over the past
50 years. Women made up almost half the paid
workforce in Australia in 2020, compared to around
30 per cent in 1966.10
Families are increasingly time-poor. As a result,
there is greater reliance on home entertainment, and
family members’ roles, responsibilities and purchasing
patterns are changing. Consequently, the marketplace
is also changing, so the marketer must adapt to this
new environment.
Multiculturalism
Multiculturalism recognises and multiculturalism

such as age, race and ethnicity, and location. celebrates cu ltu ra l d iversit y; it When a society

Demographics are signif icant provides more opportunities than has more than one
ethnic culture, it
demographics because the basis for any market challenges within a community. It receives benefits
The study of people’s is people. Therefore, demographic also recognises social and economic because of this
diversity.
vital statistics, such as
characteristics are a convenient responses to the country’s culturally
age, race and ethnicity,
and location. way of monitoring consumer buyer
behaviour in the marketplace.

26 PART ONE An introduction to marketing

 diverse population’s rights, obligations and needs,
promoting social harmony among the different
cultural groups in our society and its benefits in
market diversity and expansion.
LO4 The economic
environment
In addition to the factors discussed so far, marketing
managers must understand and react to the economic
environment. The three economic areas of greatest
concern to marketers are the distribution of consumer
income, inflation and recession.
Consumer incomes
As disposable (or after-tax) incomes rise, families
and individuals have more money to spend on non-
essential items. This new level of affluence is not
limited to professionals or individuals within specific
age or education brackets. It cuts across all households,
well beyond what organisations traditionally consider
for high-priced goods and services markets. This
rising affluence in Australia and New Zealand stems
primarily from the increasing number of dual-income
families.
Inflation
inflation
Inflation is a general rise in prices
The overall general
upward price without a corresponding increase
movement of goods in wages, resulting in decreased
and services in an
purchasing power. In times of low
economy, usually
as measured by the inf lation, organisations seeking to
Consumer Price
increase their profit margins can only
Index. Over time,
as the costs of increase their efficiency. However,
goods and services
if they significantly increase prices,
increase, the dollar’s
value falls because no one will purchase their goods or
people will not services.
purchase as much
with a dollar. In higher inf lationar y times,
ma rketers u se severa l pr ic i ng
strategies to cope and be aware that inflation causes
consumers to either build up or diminish their brand
loyalty. Inflation pressures consumers to make more
economical purchases while still attempting to
maintain their standard of living.
In creating marketing strategies to cope with
inflation, managers must realise that, despite the
seller’s cost, the buyer will not pay more for a product
than the subjective value they place on it. Thus, no
matter how compelling the justification might be for
a 10 per cent price increase, marketers must always
examine the perceived value, not just the price.
Recession
A recession is a period of economic recession
ac t iv it y du r i ng wh ic h i ncome, A period of general
production and employment tend to economic decline,
specifically, a
fall – all of which reduces demand for decrease in GDP
goods and services. for two or more
consecutive
In 2020, off the back of bushfires, quarters.
d rought a nd as t he COV I D -19
pa ndem ic cont i nued to u n fold,
Australia fell into its first recession in 29 years. The
contraction of the economy was primarily driven by
declines in household expenditure. The problems of
inflation and recession go hand in hand, yet recession
requires different marketing strategies. For example:
• Improve existing products and introduce new ones:
The goal is to reduce production hours, waste and
materials costs. Recessions increase the demand
for goods and services that are economical
and efficient, offer value, help organisations
to streamline practices and procedures, and
improve customer service.
•• Maintain and expand customer services: Many
organisations postpone the purchase of new
equipment and materials. Sales of replacement
parts and other ser vices may become an
important source of income.
•• Emphasise top-of-the-line products and promote
product value: Customers with less to spend
will seek demonstrated quality, durability,
satisfaction and capacity to save time and
money. As a result, high-priced, high-value items
consistently fare well during recessions.
In addition, the review of customer income,
inflation or recessionary forces also need to be placed in
perspective, and the financial pressure on families and
individuals to have expected living standards considered.
For example, with upward pressure on the housing
market and energy prices in a somewhat stagnant
economy, marketers need to consider the impact of these
factors on the products they present to the market.
Having looked at the first three external
environmental forces, it is now appropriate to look at
the influence of technology on the environment.
LO5 The technological
environment
Sometimes new technology is an effective weapon
against inf lation and recession. New machines
that reduce production costs can be one of an
CHAPTER 2 Ethics and the marketing environment 27
 organisation’s most valuable assets. Any nation’s
ability to maintain and build wealt h depends
mainly on the speed and effectiveness with which
machines that lift productivity can be invented and
adopted.
Japanese organisational culture offers a model of

Shutterstock.com/ms_pics_and_more
translating the results of research and development
into goods and services. For example, VCRs, flat-panel
displays and compact-disc players were based on
A mer ica n resea rch t hat was not ex ploited
commercially in the United States. Japanese
companies took the results of this
primary research primary research a nd, t h rough
The rise of mobile technology presents marketers with
Pure research that applied research, developed these significant opportunities.
aims to confirm products for sale to consumers.
an existing theory
or to learn more Similarly, many Australian and New
about a concept or
phenomenon.
Zea la nd resea rchers conduct i ng LO6 The competitive
primary research have had to turn to
applied research companies overseas to convert their environment
Research that primary research into applied research
focuses on finding The final environment to be considered is the
and then into marketable products.
practical applications compet it ive e nv i ron me nt . T he compet it ive
of pure research, Developing new or improved products
environment operates within a given industry
often to develop
through innovation and adaptation
new or improved category; that is, the number of competitors an
can create vast new challenges for
products.
organisation must face, the competitors’ relative
marketing managers.
size and the degree of interdependence within the
One of the greatest opportunities of this decade
industry.
is the tremendous growth and use of the Internet
Management usually has little control over
and mobile media devices and networks. Together,
t he compet it ive env i ron ment conf ront ing a n
these help marketing organisations to operate
organisation but being aware of competitors’
more efficiently through better communications.
competitors, including competitors appearing in
Email enables many organisations to communicate
or dropping out of the market, can help it make
quickly with employees and clients in distant places
intelligent decisions about responding and competing
throughout the world. The convenience of email and
effectively. By doing this innovatively, even smaller
instant-messaging services results in many people
organisations can survive and even prosper in highly
using these for personal and organisational matters.
competitive environments.
The improving internet speeds and wireless systems
mean that technology allows people to communicate
more frequently and less expensively, using different
Industry analysis
devices, platforms and apps (e.g. social media, Before you can start gathering useful information
mobile phones, video conferencing and peer-to-peer about your competitors, it is essential to understand
resourcing). The prevalence of texting, blogging, the industry’s scope clearly.
tweeting and social media has taken communication to Industry analysis involves the review of the
a far more accessible level, most of which has occurred industry size (how many people in total use services
in the past 10 years. or products provided by that industry), trends, stage
As will be discussed throughout this text, of evolution, demand characteristics and the structure
technology is also influenced by many other means of any existing or emerging segments that could
of electronic data management and communication. influence an organisation’s ability to survive, prosper
These advances require the marketing manager to or perish. In terms of the competitive environment,
investigate these new media for use and integration industry analysis sets the foundation for subsequent
into the traditional marketing mix for an organisation, stages of analysis, which include consideration of an
its products and its various target markets. organisation’s competition and competitors.

28 PART ONE An introduction to marketing

 Identifying your place in
the industry
How you define the scope and dimensions of what
your organisation aims to do within the industry
can dramatically influence whom you see as your
competitors. For example, two organisations could
both be delivering accounting services. However,
one may be serving a local market, while the other
may be serving an international market. Accordingly,
even though these two organisations are in the same
industry, they have a very different set of competing
forces (and may not be competing against each other!).
Global competition is the strategy
global competition an organisation adopts to provide
The strategy an
the same product in all markets
organisation adopts
to provide the worldwide. In the sports shoe market,
same product in all organisations such as Nike, Asics
markets around
the world. and New Balance are in intense
competition across the globe. These
organisations are savvy international
competitors. They each conduct business with very
similar products in scores of different countries. They
must consider the competition the others provide
in the global arena and in the domestic markets. In
some countries, there will be competition from both
international and domestic or local brands.
International competition is the
international
strategy an organisation adopts to provide
competition
The strategy an products that are usually different or
organisation adopts modified in some way for each country.
to provide products
The different strategies adopted – global
that are usually
different or modified or international – can influence how the
in some way for each
marketer views the environmental forces
country.
that can, in turn, influence the strategic
analysis an organisation adopts in terms
of the environmental scan being undertaken.
Competitor analysis
Once a company has clearly defined its market,
scanning the competitors operating within the same
space is also an activity that the marketing officer
should undertake. In particular, the marketing
person is looking for traits that will allow them to
project how these organisations will behave when the
environmental conditions of the marketplace change.
For example, in the domestic airline industry in
Australia, if an airline strives to gain market share
by reducing its ticket prices, its competitors will react
swiftly to either match or improve on the reduced price
to retain their market share. Accordingly, if you were
aware that this was the expected behaviour of your
competitors, it is unlikely that you would adopt a
price-war strategy.
LO7 The political and
legal environment
Organisations need government regulations to
protect innovators of new technology, the interests
of society in general, the interests of one organisation
from another and, ultimately, consumers. In turn,
governments need organisations because private
enterprise provides employment and generates taxes
that support public efforts to educate society’s youth,
protect the country’s shores and so on. The private
sector also serves as a counterweight to government,
with the private enterprise system decentralised
power limiting government, which is essential for the
survival of a democracy.
Every aspect of the marketing mix is subject
to laws and restrictions. Marketing managers and
their legal advisers must understand these laws
and conform to them because failure to comply with
regulations can significantly affect an organisation.
Sometimes just sensing trends and taking corrective
action before a government agency acts can help to
avoid regulation. This did not happen in the case of
the tobacco industry. As a result, Australia now has
advertisement-free cigarette packaging to reduce
illness and disease caused by smoking.
However, the challenge isn’t simply to keep an
organisation’s marketing effort out of trouble but to
help it implement creative new programs to accomplish
marketing objectives. Unfortunately, it is all too easy
for a marketing manager, or sometimes a lawyer, to
say ‘no’ to a marketing innovation that entails little
risk. Thus, it is important to understand thoroughly
the laws established by the federal government,
state governments and regulatory agencies to control
marketing-related issues.
Federal legislation
Commonwealth laws that affect marketing fall
into several categories. For example, in Australia,
product fitness and integrated marketing
communications accuracy are covered by the
Competition and Consumer Act 2010 (formerly known
as the Trade Practices Act 1974), while privacy
issues are addressed by the Privacy Act 1988 (and
amendments). In addition, New Zealand’s Fair Trading
Act 1986 and Consumer Guarantees Act 1993 have
similar goals and objectives.
CHAPTER 2 Ethics and the marketing environment 29
 Regulatory agencies
Although some state regulatory bodies actively pursue
violations of their marketing statutes, Commonwealth
government regulators generally have the greatest
clout. The Australian Competition and Consumer
Commission (ACCC) and Food Standards Australia
New Zealand (FSANZ) are the agencies most directly
and actively involved in marketing activities. The
ACCC is a statutory authority responsible for ensuring
compliance with Australian consumer law, set out in the
Competition and Consumer Act 2010.
LO8 Ethics, morality
and law
It is essential to understand ethical theories, ethical
behaviour, morality, business decision making, and
ethical codes and guidelines to understand marketing
ethics.
In an organisational environment,
ethics regardless of the intensity of the
The principles or values,
based on morals used by
competition, organisations should
an individual or group to compete ethically. Ethics refers to
govern their behaviour the set of rules or standards based
and judge right and
on moral principles or values that
wrong conduct.
Real World Marketing
BUYING GLOBALLY
Rare earths are a group of 15 metals that are
used in a variety of applications. You will find
rare earths in your smart phone camera, your
phone speakers and the small engines that
make your phone vibrate. Rare earths are
found in environmentally friendly product
alternatives, such as batteries for electric and
hybrid cars, wind turbines and LED lights. They
are used in several military applications
including weapon guidance systems. Rare
earths are even used to produce petrol, diesel
and gas more efficiently. With so many uses,
understandably the demand for rare earths
is high.
China currently holds the world’s largest
reserves of rare earths by over two-fold and
supplies up to 80 per cent of the market. Rare
earth supply involves not only extraction from
the ground, but also a process of chemical
refinement, which is both complex and
30 PART ONE An introduction to marketing
expensive, posing barriers to entry from
competitors. China’s near-monopolistic control
of rare earths trade gives the nation power
over reliant countries such as the US. This
sense of reliance on a single supplier has
created tension in recent years. In 2010, China
restricted rare earth exports to Japan in
retaliation for a marine collision with a
Japanese vessel. More recently in 2020, China
threatened to limit rare earth supplies to US
defence contractors after discovering
involvement between US arms sales and
Taiwan. These incidents have spurred the US
to invest in alternative suppliers, including
Australian-owned Lynas Corporation which has
a rare earths mine in Western Australia.
This case raises a number of ethical
questions. Is it ethical to restrict the supply of
natural minerals that are used to produce
environmentally friendly products such as
electric vehicles and wind turbines for
economic gain?
Sources: AGI, 2022, https://www.americangeosciences.org/
critical-issues/faq/how-do-we-use-rare-earth-elements; Lynas
Rare Earths, 2022, https://lynasrareearths.com/products/how-
are-rare-earths-used/energy-efficiency/; Page, M and Coyne,
J, 2021, ‘Australia has a key role to play in reducing China’s
rare-earths dominance’, The Strategist, 25 February, https://
www.aspistrategist.org.au/australia-has-a-key-role-to-play-
in-reducing-chinas-rare-earths-dominance/; Mercer, D, 2021,
‘Race on for Australian rare earth supplies as fears grow over
China’s market “monopoly”’, ABC News, 19 July, https://www.
abc.net.au/news/rural/2021-07-19/rare-earths-race/100285830;
Treadgold, T, 2020, ‘China’s rare earth threat sparks an
international backlash’, Forbes, 7 August, https://www.forbes.
com/sites/timtreadgold/2020/08/07/chinas-rare-earth-threat-
sparks-an-international-backlash/?sh=fdcb37943947; Morrison,
WM, 2019, ‘Trade dispute with China and rare earth elements’,
Congressional Research Service, 28 June, https://fas.org/sgp/
crs/row/IF11259.pdf
individuals or groups use to govern their behaviour and
judge right and wrong, or ‘good’ and ‘bad’ conduct.
Legal actions may not always be ethical, and vice
versa. Laws are the values and standards that are
enforceable by the courts. Ethics consists of personal
moral principles and values (unwritten rules) rather
than societal prescriptions.
Defining the boundaries of ethicality and legality
can be difficult. We develop ethical standards based
on morality, which is subjective and
varies among people and groups. Morals morals
The rules people
are rules the community determine as develop because of
right and wrong due to cultural values cultural values
and norms. Cultural value is a socialising and norms.
force dictating what is considered right and wrong,
but not always agreed. Therefore, morality can vary
across cultures and even among groups within the
same culture.
The laws and reg ulat ions we d iscussed in
the previous section affect social and economic
behav iour and ref lect the com munity’s moral
standards. But as we have discovered earlier in
this chapter, a community has many cultures and
groups. Their values and norms may not wholly align
with these standards. As a result, the same action
can often be considered ‘good’ in some respects but
‘bad’ in others. This is demonstrated in the following
examples:
1 Selling alcohol, tobacco and X-rated movies to
people over the age of 18 is legal in Australia.
However, certain groups of the community would
suggest these activities are unethical.
2 If a salesperson sells a new Smart LED television
to a disadvantaged consumer while knowing
full well that they cannot keep up with the
required monthly payments, their behaviour is
legal. But is this a ‘good’ salesperson? What if
the sale enabled the salesperson to meet their
assigned daily sales quota? Here, the person can
be identified as a ‘good’ salesperson who makes
or exceeds the assigned daily quota and as a
‘bad’ person who sold something they knew the
customer could not afford.
3 A doctor who runs ads offering discounts on
open-heart surgery may be acting legally if there
are no laws against such advertising. This doctor
would be considered ‘bad’ or unprofessional, in
the sense of not conforming to the norms of the
medical profession, but ‘good’ in terms of offering
surgery at a price people can afford. Here, good
and bad morals are seen as conforming or deviant
behaviours.
4 A fundamentalist Christian who drinks whisky
or a Muslim who eats pork might be considered
‘bad’ by other members of their faith. But,
neither behaviour is illegal. Here, the terms
‘good’ and ‘bad’ reflect their religious beliefs, and
different religions can look at the same activity
in markedly different ways.
These examples demonstrate that while legality is
fixed and not open to subjective assessments, morality
and ethics are not clear-cut and depend on a person’s
culture, experiences and understanding of societal
norms.
Real World Marketing
ORGANISATIONS AND PERSONAL
COMMUNICATION
In the workplace, organisations struggle with
the use and progression of communication
technology. Should organisations allow
employees to use organisational resources for
personal use, such as social media and emails?
One study suggests that allowing designated
social-media breaks can be beneficial in
increasing employee productivity.
On the other hand, recent court cases also
suggest that in certain circumstances, it is legal
for organisations to browse social media sites
used by employees to gain information about
what they do and how they behave outside work
hours. These are not easy matters to address,
and they need careful consideration and clear
policy so that all parties understand how to use
social media and emails. Many organisations,
such as Adidas and IBM, have established official
social-computing and social-media guidelines.
Sources: Escribano, F, 2011, ‘Reloaded: Adidas Group social
media guidelines’, 24 November, Adidas, http://blog.adidas-
group.com/2011/11/reloaded-adidas-group-social-media-
guidelines/ (accessed 25 March 2018); IBM, nd., ‘IBM social
computing guidelines’, https://www.ibm.com/blogs/zz/en/
guidelines.html (accessed 25 March 2018); Ulloa, E, 2017,
‘Can social media breaks in the workplace increase employee
productivity?’, 3 March, Envision Consulting, http://www.envision-
consulting.com/2017/03/03/social-media-breaks-workplace-can-
increase-employee-productivity/ (accessed 25 March 2018).
Questions:
1 Is your view of the link between social media
use and employee productivity influenced by
whether you think organisations have an
‘ethical’ reason for allowing the personal use of
social media on company time?
2 Should organisations be allowed to browse
social media sites used by employees to learn
what they do and how they behave outside of
work hours?
Ethical theories
The study of ethical and moral behaviour is not black
and white but shades of grey.
Ethical theories help us to understand people’s
behaviour and choices. Marketers need to understand
their ethical position before judging them based
on their ethical opinion. Usually, people base their
individual choice of ethical theory on their own life
experiences. However, Exhibit 2.5 describes some of the
ethical theories that apply to marketing.
CHAPTER 2 Ethics and the marketing environment 31
 Exhibit 2.5 E
 THICAL THEORIES
Theory
1 Deontology
The deontologist believes that to be ethical,
we must fulfil our obligations and duties.
These obligations may be to other individuals
or to society.
Upholding one’s commitments is ethically
correct.
2 Utilitarianism
Utilitarian ethical theory suggests that the
choice which yields the greatest benefit to
the most people is ethically correct. This
theory also has a strong focus on the ability
to predict the consequences of an action.
Utilitarians may compare similar predicted
solutions and use a point system to
determine which option is more beneficial for
more people.
This point system provides a logical and
rational argument for each decision and
allows a person to use it on a case-by-case
basis.
There are two types of utilitarianism: act
utilitarianism and rule utilitarianism.
3 Moral relativism
A belief that ethical truths are not
universal but depend on the individuals
and groups holding them. We could call
this practice ‘time-and-place’ ethics since
it has no absolute rules that apply in all
circumstances.12
32 PART ONE An introduction to marketing
Example
A deontologist will always keep their promise
to a friend (an obligation they have placed
upon themselves) and follow the law (a duty
placed upon them by society). Therefore, a
deontologist would theoretically make very
consistent decisions based on their set duties.
Act utilitarianism adheres strictly to the
provided explanation of utilitarianism. The act
utilitarian analyses a situation and performs
the acts that benefit the most people in that
specific case, regardless of personal feelings or
societal constraints such as laws.
Rule utilitarianism, however, considers the
law and is concerned with fairness. A rule
utilitarian will act according to rules or laws that
benefit the most people overall, through the
fairest and most just means available – even
if, in specific circumstances, this means taking
an action that does not benefit the greatest
number of people possible. Therefore, the
added benefits of rule utilitarianism are that it
values justice and doing good simultaneously.
While stealing is often considered ethically
wrong, the moral relativist argues if you are a
parent and your child is starving, stealing a loaf
of bread is ethically correct.
In moral relativism, the proper resolution to an
ethical dilemma weighs the competing factors
at the given time and then decides to choose
the lesser of the evils as the resolution.
Issue
Deontological theory is not necessarily
concerned with the welfare of others. It can also
lead to conflicts that may be difficult to resolve.
For example, suppose a salesperson decides
they must always be on time for meetings with
clients.11 Today, though, they are running late.
How are they supposed to drive? If they take the
deontological view, they should speed to avoid
arriving at their meeting late and letting down
their client. But by speeding, they fail to fulfil
their obligation to uphold the law. They also risk
causing an accident, which is unethical, if they
consider themselves to have a duty not to put
others in danger. This scenario of conflicting
obligations does not lead us to a clear, ethically
correct resolution, nor does it protect the
welfare of others from the deontologist’s
decision.
As is true of all ethical theories, act and rule
utilitarianism contain numerous flaws. Inherent in
both are the problems associated with predicting
the future.
Although people can use their life experiences
to forecast outcomes, no human being can be
confident that their predictions will be accurate.
This uncertainty can lead to unexpected results.
This can make the utilitarian look unethical as
time passes because their choice did not benefit
the most people, as predicted.
Another assumption that a utilitarian must
make is to compare the various types of
consequences against each other on a similar
scale. However, comparing material gains, such
as money, against intangible gains, such as
happiness, is impossible because their qualities
differ so greatly.
If we continue to use the example of our
salesperson who is running late for a meeting,
the moral relativist might argue that the
salesperson should not speed. They may argue
that the greater good is obviously avoiding the
potential for harm to others that speeding might
cause, because being late to a sales meeting is
not a life and death situation.
But, another moral relativist could argue that the
low statistical risk of harming another person
by speeding on one occasion is outweighed by
the reputational risk of being late. What if the
salesperson loses their client, and this event
places their family at risk of hardship?
Another random document with
no related content on Scribd:
 Mutta Rietula piti Iisakin tarjousta pilkkana ja hotaisi menemään
tupakkavehkeet niin, että ne lensivät alhaalla makaavan sonnin
eteen.

— Jo on miehellä sisu, kun ei heltiä tällaisessakaan paikassa. Nyt

jos härkä syö minun piippuni ja massini, niin saat maksaa ne vielä
tämän leikin lopuksi.

Rietulan puusta kuului vain murinaa vastaukseksi.

— Mikä se sokaisikin miehet, että puuhun, kun kerran oli

venheetkin, joilla olisi voinut väistää, arveli Iisakki hyväntuulisena
edelleen.

— Piru se sokaisi minutkin lähtemään koko lahnareissulle,

pahoitteli
Rietula.

Aurinko nousi ja lähetti lämpimät säteensä tuoksuviin metsiin,

joissa helisi jo lintujen kuoro. Yksi sädekimppu sattui Rietulan
pahasti vääristyneeseen naamaan, jossa raivostuneet silmät
muljahtelivat vuoroin Iisakkiin, vuoroin taas maassa rauhallisesti
märehtivään sonniin, joka oli laittautunut aivan Rietulan puun
juurelle.

— Tulee siitä taas lämmin päivä, arveli Iisakki. Olisi tästä pitänyt
päästä lahnaakin keittämään. Sinunkin verkkosi voi siellä revetä, kun
oikein aikamoinen lahnakarja…

— Älä uhittele!

— Mitäpä tässä uhitelemaan… Kuuluisi huuto sinne joelle, niin

karjastaisiin yhteen ääneen, mutta ei se kuulu. Ja tuo sonni pahus
voi siinä makoilla puolelle päivin, jos lähtee sittenkään.

Rietula oli katkaissut puukollaan pisimmän oksan puusta ja

karsinut siitä neulaset ja kiinitteli sen toiseen päähän puukkoaan
nuoran kappaleella. Saatuaan laitteensa valmiiksi, aikoi hän osoitella
sillä sonnia silmään.

— Älä helkkarissa puhkaise siltä silmiä, hätääntyi Iisakki. Johan

sinä nyt, naapuri…

— Puhkaisen minä, jos vaan saan osumaan! karjasi Rietula.

Kepakko ei ylettynyt tarpeeksi pitkälle, ja Rietula taittoi uuden

oksan, leikkeli puukolla paitansa helmuksista kaistaleen, jolla sitoi
jatkon kepin nenään.

— Nyt se varmasti ulottuu! riemuitsi hän ja alkoi sohoa sonnia

silmien seutuville.

— Saat viisi markkaa, jos et puhkaise sonnilta silmiä, lupasi Iisakki

jo hätääntyen.

— Vaikka antaisit koko talosi, niin minä puhkaisen!

— Vaikkako antaisin Eedlankin? uteli Iisakki.

— Annat sinä sen vielä antamattakin!

— Et ota Eedlaa, jos minä terveenä pysyn, uhkaili jo Iisakkikin.

Sonni katseli ihmetellen Rietulan keksintöä. Saikara oli pitkä ja

raskas ja kun puukko alkoi ponnistuksilla osua silmän kohdalle,
käänsi sonni päätään, ja Rietula kirosi epäonnistumistaan.
 — Älä kiroile, se suuttuu, kiusotteli Iisakki. Kun annat sen
rauhassa lepäillä, niin jospa se jo iltapuolella jättää meidät.

Mutta Rietula jatkoi yrityksiään ja kohta sonni kapsahtikin jaloilleen

ja alkoi kieli pitkällä puskea Rietulan puuta. Saikara putosi Rietulan
kädestä ja yhä karkeammin kiroten tarttui hän puuhun.

— Kas kun et uskonut, vaikka sanoin, että se suuttuu, naurahti

Iisakki.

Rietulalta putosi hattu ja sonni pisti sen heti maata vasten

sarviinsa.

— Voi helvetti, kun se oli minun kirkkohattuni! karjasi Rietula.

— Taisi olla ihan kosimahattu. Ja nyt sillä tuo pahuksen mullikka

koreilee.

Rietulan haivenet olivat nousseet pystyyn. Sonni ei näyttänyt

pitävän Rietulan päähineestä, joka oli tarttunut lujasti sen sarviin eikä
irtautunut maata vastenkaan penkoessa.

Iisakki nauraa hihitti puussaan ja Rietula katseli julmistuneena

häneen ja vuoroin kirkkohatun häikäilemättömään hävittäjään.
Harakkakin oli huomannut mieltäkiinnittävän näytelmän ja lensi
koivuun aivan Rietulan istumapuun lähelle. Se katseli hetken pää
kallellaan ja päästi sitten lyhyen naurun. Rietula taittoi oksan
kappaleen ja heitti sillä ilkeästi nirskuttavaa lintua, mutta menettikin
siinä tasapainonsa ja tuli puusta maahan niin, että oksat katkeilivat.

Ihmeen ketterästi pääsi Rietula jaloilleen ja pötki venheelleen

sonni kintereillä. Iisakki katsoi myöskin parhaaksi laskeutua puusta
ja rientää venheeseensä. Sonni jäi rannalle töllistelemään, kun
venheet loittonivat rannasta.

— Tule nyt, naapuri, lahnakeitolle puolisen ajoissa, pyyteli Iisakki

kauniisti kalatoveriaan, mutta tämä vastasi karkealla kirouksella ja
lähti soutamaan niin, että vesi kokan alla kohisi.
XIV.

Kolmolaiset eivät ole kertaakaan käyneet korpijokelaisten

osuuskaupassa. Kirkonkylästä ovat tavaransa hakeneet ja silmät
kiinni ajaneet korpijokelaisten kaupan ohi omalle puolelleen.
Pikkupoikiakin kiellettiin ankarasti käymästä osuuskaupassa, mutta
salaa pujahtivat poikaset saamaan Nuusperilta karamelleja, jotka
maksettiin siten, että suoritettiin tuima tappelunäytelmä puodin
edustalla.

Mutta kolmolaiset ovat hiljaisuudessa puuhailleet hekin omalla

tahollaan. Rietula kokosi tarvittavan määrän osuuksia ja muutamana
yönä pidettiin salaa kokous, jossa päätettiin heti avata kauppa
suutari Horttanaisen uudessa mökissä, joka oli äsken kohonnut Ala-
Rietulan pellon laitaan maantien varrelle. Toistamiseen sai suutari
muuttaa asunnostaan, mutta teki sen tällä kertaa ilolla, kun oli
kolmolaisten etu kysymyksessä ja kun sai muuttaa ilman pakanallisia
pakkokeinoja.

Ja eräänä päivänä avattiin kauppa, joka suurimmalla

varovaisuudella, etteivät korpijokelaiset saisi tietää asiasta, oli pantu
kuntoon etupäässä sydänöillä, suutarin akan pitäessä vahtia
maantien veräjällä.
 Nimikilpi uuteen kauppaan laadittiin vielä suuremmaksi kuin
Korpijoen kaupan ja maalattiin sitäpaitsi koristeellisesti. Nimen
ympärille oli maalari Mikkelson, joka oli vartavasten Kuopiosta
haettu, piirrellyt hämäriä, symbolistisia aiheitaan. Niinpä kilven
ylänurkissa nähtiin kaksi sarvipää paholaista puskemassa
vastakkain ja paholaisia kiskoi hännästä kaksi tukevatekoista,
pahasti irvistävää isäntämiestä. Alareunaan oli suutari Horttanainen
kiven kovaan vaatinut maalattavaksi kahvipannun, nisupullan ja
kaksi tervehtivää, lujasti puristavaa kättä ja niiden alle lauseen:
"Rakkaus voittaa kaikki" ja vähän alemmaksi "Terve tuloa!"

Maalari oli hymähtäen täyttänyt Horttanaisen vaatimuksen, mutta

Rietula aprikoi murahdellen vihtahousujen merkitystä, jotka maalari
oli itse keksinyt. Ja kun Rietula ei jaksanut aihetta sulattaa kysymättä
maalarilta, miksi tämä oli piruja maalannut niin pyhään paikkaan kuin
osuuskaupan seinään ja vieläpä nimikilpeen, vastasi Mikkelson:

— Maalataanhan niitä kirkon seiniinkin. Ja ne ovat muuten

muodissa nykyään.

Rietula tyytyi selitykseen ja kysyi maksua maalarin vaivoista.

— Sata markkaa.

Rietula seisoi kysymysmerkkinä.

— Kymmentä kai tarkoitit?

— En muuta kuin mitä sanoin. Se on sitäpaitsi halpa, selitti

maalari, mutta olen saanut hyvin paljon nautintoa sen
valmistamisesta ja se korvaa tekopalkasta puolet.

Rietula seisoi yhä suu auki ja haroi korvallistaan.

 Mutta Horttanainen joutui selittämään:

— Jos Nuusperi on saanut kympin korpijokelaisilta

tuherruksestaan, niin tottahan tämä taiteellinen työ on kymmentä
vertaa arvokkaampikin. Maksa vain pois vaaditut markat!

Möttösen Eerokin antoi työlle täyden tunnustuksen ja arveli:

— Maksetaan pois, mitä se pyytää, kun on Kuopiosta asti

kulkenutkin ja… ja onhan meillä rahaa! kehaisi hän lopuksi.

— Niin, no, onhan sitä rahaa, riemastui Rietulakin ja kaiveli rahat

lompakostaan.

— Mutta vuosiluku siitä puuttuu, huomasi Ala-Rietulan Vernandi, ja

se on tehtävä.

— Niin, täysi työ, kun on täysi palkkakin, vahvisti Horttanainen.

Maalari tarttui siveltimeensä ja vasempaan alanurkkaan piirteli

punaisella:

"Armon vuonna 1916".

— No nyt se on valmis!

— Ja komeapa, pahus, onkin!

— On se toista kuin korpijokelaisten!

— Kahvipannu olisi saanut olla hieman isompi, arveli suutarin

akka.
 — Ja nuo kädet puristaa vähän kovemmin toisiaan, huomautti
Möttösen
Taava.

— Kyllä maalari sen on paremmin tiennyt, neuvoi suutari.

Mutta Heikkilän Vilhelmi arveli:

— Tuo toinen ukko, joka kiskoo tuossa oikealla puolella vanhaa

kehnoa hännästä, on ihan kuin Kyrmyniska. Eikö olekin?

— On, on! Jopa osasi maalata!

— Mutta kukas se mahraa olla tuo toinen, vielä turpeampi äijä

tossa alanurkass'? kuului ääni miesten takaa kysyvän. Käännyttiin
katsomaan ja Nuusperi pakanahan siellä oli.

— Nii' minust' vaa näyttää kui Rietula sii' olis', jatkoi tämä
tähystellen kilpeä naurusuin.

— Huuti, kuipeliini, mitä sinä tänne…? Laputa tiehesi karjaistiin

Nuusperille.

— Niin, mitä sinä tänne, oikeitten ihmisten puolelle…!

— Ala painella!

— Menetkö siitä!

Menihän Nuusperi ja sanoi vielä maantiellä menneessään:

— Kyll' se vaa' ol Rietula tuoss' vasemmass' nurkass'!

 Mutta tästä välittämättä siirryttiin myymälään, jossa Rietula tarjosi
rinkiläkahvit kaikille kolmolaisille.
XV.

Poutaisen punainen aurinko oli laskeutunut tyvenenä uneksuvan

Kolmojärven taakse. Oli hiljainen ilta ja pelloilta olivat äänet
vaienneet. Kylän saunoissa vain vastat läiskivät ja höyry pullahteli
oviaukoista, kun itsensä punaiseksi peitonneet miehet palailivat
verkkaan kylvystä ja istuivat pihakiville itseään kuivailemaan.

Miirun Eedla käveli sillan yli Kolmon puolelle ja pistäytyi Kolmon

osuuskauppaan.

Mitä hän sieltä? Oli nähnyt Kolmon tytöillä hohtavan punaisia

puseroita, joihin kangas oli saatu omasta osuuskaupasta ja Eedlan
mieli teki nyt samanlaista punahohtoista puseroa, jolla sopisi esiintyä
ensi sunnuntaina kirkkomäellä.

Eedlan suunnitelmista ei varmastikaan kukaan korpijokelainen

tiennyt mitään, ei edes oma äitinsäkään. Muuten häntä olisikin
tartuttu leiskuvaan palmikkoon ja riipaistu armotta omalle puolelle,
omaan kauppaan tyytymään siihen mustapohjaiseen,
punakukkaiseen retonkiin, jolla Korpijoen neitoset olivat itsensä
vaatehtineet.
 Mutta Eedla oli muista riippumaton ja päätti kaikesta huolimatta
koreilla ehtapunaisella puserolla?

Rietulakin oli sattumalta pistäytynyt ostoksilleen ja hämmästyi

nähdessään Eedlan tulevan kauppaan.

— No mitä sitä nyt Eedlalle kuuluu? kysäisi hän iloisesti.

— Eipä erikoista… mitä vaan Moosekselle?

Kaupanhoitaja hätkähti, sillä kukaan ei tohtinut sanoa Rietulaa

etunimeltään. Tämäkö Eedla nyt tohti.

Mutta Rietula hymyili vain ja osti Eedlalle suuren pussin

karamelleja, josta toimenpiteestä sai kokonaan tytön luottamuksen
puolelleen.

— Johan Mooses on ostanut uuden hatun… Kun kuului se meidän

sonni repineen sen mustan kirkkohatun, virkkoi Eedla jotain
sanoakseen.

Rietulan niska kävi punaiseksi, mutta hän ei puhunut mitään. Otti

vain rinkilöitä ja tukki taskunsa täyteen.

Eedla hankkiutui pois lähtemään ja Rietula supatti hiljaa hänelle:

— Mennään tuonne joen rannalle istumaan ja syömään rinkilöitä.

Ei suinkaan Eedlalla niin kiirettä ole.

— Ei, ei, jos sattuu kuka näkemään, esteli Eedla hiljaa.

— Istutaan siellä ladon takana, niin ei kukaan näe, arveli Rietula ja

leikkisänä lisäsi:
 — Eedla ei muuten istuisi tämmöisen vieressä?

— Nii-iin! Kun se taas tuo Mooses…

Eedla pyörähti ulos. Rietula painoi hattua silmilleen ja seurasi

perässä. Kylien kohdalla tyytyi Rietula astuksimaan Eedlan jälessä,
mutta pyörähti hänen rinnalleen, kun tultiin polun risteykseen, joka
vei heinäladolle.

— Mennään tästä, niin ei kukaan huomaa, neuvoi Rietula.

— Kun äiti ei vaan sattuisi huomaamaan, arveli Eedla. Silloin se

nostaa möläkän ja tulee tänne seipään kanssa.

Ladon takana oli hirsikasa, ja sille istahti Rietula ja kehoitti

Eedlaakin istumaan. Kaivoi sitten housujensa taskusta rinkilöitä ja
ojensi Eedlalle.

Hetkinen istuttiin hiljaa, ja Rietulan suu heilui kiivaasti. Hän aikoi

nähtävästi ottaa puheeksi keväällä keskeneräiseksi jääneen naima-
asian.

— Mitenkä se on, Eedla, etkö sinä sitten millään ehdolla suostu

tulemaan minulle? kysyi hän vihdoin.

— Kyllähän minä, mutta kun se äiti… ja kun se Kyrmyniskakin

tuppasi ne kihlansa.

Rietula heilahti kuin neulan pistosta.

— Joko se, kutjake, ne kihlansakin… Mutta pura pois, Eedla, se

kauppa. Olisihan tuo toista olla lautamiehen emäntänä.
 — Tehköön äiti, miten tahtoo. Kyllähän minä Mooseksesta
tykkäisin hieman enemmän, mutta mikäpä siinä auttaa, jos kerran se
Kyrmyniska nai…

— Mutta se ei nai sinua, se on vissi! kiljahti Rietula. Johan nyt on

ihme, että vastoin tahtoaan pitää sille korilaalle työntyä. Minun pitää
ottaa tämä asia uudelleen ja koettaa, eikö sanan voima pysty äitiisi.

— Eihän minulla ole mitään väliä, jos vaan saisi sen Kyrmyniskan
ottamaan pois ne kihlansa.

— Ne annetaan sille, vaikkei ottaisikaan! Rietula melkein huusi.

Kyrmyniska ei tiedä, mikä on laki ja oikeus. Ja jollei tämä asia
muuten selviä, niin minä sanon, että käräjätuvan seinät punoittaa
tästä asiasta!

Rinkilät loppuivat ja Eedla nousi pistäen vaatemytyn kainaloonsa.

— Nyt täytyy mennä, muuten äiti on vihainen.

— Olisi nyt vielä istuttu, esteli Rietula, mutta tyttö meni jo hyvän
matkan päässä.

Kylät nukkuivat vaaleassa yössä. Lehmisavut kohosivat suorina

patsaina ilmaan, ja kellokas jossain karjatarhassa ammahti pitkään,
johon kaiku monistellen vastasi.

Rietula tapasi Eedlan maantiellä. Hän näytti liikutetulta. Otettuaan

Eedlan käden omaansa, virkkoi hän ääni värähtäen:

— Hyvästi nyt, rakas Eedla!

— Hyvästi, hyvästi, rakas Mooses! Kiitoksia rinkilöistä!

 Kumpainenkin erosi taholleen. Eedla vaikeni kävellessään, mutta
Rietula hyräili kotipihalle päästessään:

"Jo joutui armas aika".

XVI.

Oli keskikesä käsissä. Puissa oli täysi lehti ja ruoho kedoilla näytti
rehevältä. Päivät olivat poutaisia, ja kun maa kävi janoiseksi, satoi
öisin, mutta aamuisin hymyili taas poutaisen punainen aurinko.

Korpijoen ja Kolmon kylissä seurattiin suurella jännityksellä Eedlan

naima-asiaa. Oltiin epätietoisia, kelle tyttö vihdoinkin suostuisi
menemään avioksi.

Iisakki kävi Miirussa, mutta päivisin ja mitään pelkäämättä,

jotavastoin Rietulan täytyi tavata rakastettuaan yöllä ja pelätä joka
hetki Miirun Eveliinan seipään iskua, sillä tämä oli kerran kesäisenä
iltana omalla pihallaan pauhannut niin, että oli kuulunut Ylä-
Rietulaan asti:

— Jos ei se Rietulan riivattu lakkaa kärkkymästä meidän Eedlaa,

niin minä laitan itseni vahtiin ja kun se pistää päänsä tänne, niin
minä lyön niin että seiväs katkeaa!

Tämän uhkauksen oli kuullut jokainen Korpijoen ja Kolmon kylillä

ja myöskin Rietula ja Iisakki. Edellinen puri hammasta kuulemansa
johdosta, mutta jälkimäinen veti suunsa makeaan hymyyn.
 Ja eräänä aamuna, kun Mikkolan kukko veteli ensimäisiä
aamuvirsiään, nousi Iisakki vuoteeltaan ja kävi noutamassa
vaateaitasta verkavaatteensa ja alkoi pukeutua nopeasti.

— Nyt sitä on mentävä pappilaan, ei siinä auta, jupisi hän

itsekseen. Mitä se viivytyksistä paranee. Saattaa Rietula muutamana
päivänä kopata sen Eedlan ja silloin se on mennyttä.

Käskettyään renkinsä valjastamaan hevosen kirkkokääsien eteen,

lähti
Iisakki juoksujalkaa Miiruun.

Talossa vielä nukuttiin. Iisakki meni Eedlan aitan ovelle

koputtamaan.

— Jos se Eedla nousisi nyt ylös. Hevonenkin olisi siellä jo

valmiina.

Edellisenä iltana oli Iisakki käynyt puhumassa Eedlalle pappilaan

menosta ja Eedla oli jorahtanut:

— Samapahan tuo on.

Mutta nyt Eedla kuorsasi kuuluvasti aitassaan ja Iisakki höpötti:

— Eedla, Eedla, hyvänen aika, kun ei kuule, vaikka kuinka…

Pitäisi nyt jo lähteä. Siellä kukkokin jo aamuvirsiään laulelee. Tokko
se Eedla kuulee? Rakas Eedla…

Mutta apua ei tullut, vaikka Iisakki jo potkaisi kerran oveakin.

Eveliinaa piti mennä herättelemään.
 — Nouse, hyvä Eveliina, auttamaan. Se Eedla ei taida lähteäkään
pappilaan, kun se kuorsaa vaan. Pitäisi joutua, ettei Rietula mitään
huomaisi.

Eveliina nousi ylös ja meni pihamaan yli Eedlan aitan ovelle.

Potkaisi oveen niin että rämähti:

— Kuuletko sinä tytön toljake, kun sinua ajellaan pappilaan

lähtemään ja sinä kuorsaat kuin hevonen! Laita pian itsesi jalkeille!

— Mikä nyt on hätänä. Ei ole aurinkokaan vielä noussut, kuului

Eedla unisesti urahtavan.

— Vai pitäisi tässä sinulle vielä auringon nousta! Hätä se on, kun
Rietula saattaa vahtia pitää ja lyöttäytyy sinne jälkeenne
sekaannusta aikaansaamaan, pauhaili emäntä.

Kun Eedla oli vihdoinkin pukeutumispuuhissa, kehoitteli Eveliina:

— Laitakin nyt itsesi koreaksi, niin on Iisakin mukavampi katsella.

— Kyllä tätä Eedlaa toki katselee mielikseen, vaikk' olis

paitasillaan, kehui Iisakki.

— Laita sille kukka rintaan, kehoitti Eveliina Iisakkia.

— Kyllä minä… Kasvaahan siellä meidän pirtin akkunan alla

lingerkumina ja samettiruusuja ja ne näkyvätkin olevan jo kukalla.
Pitääpä laittaa.

Mikkolan pihassa oli jo hevonen valmiina, ja noustiin rattaille. Yli

reunojen pursuvan ilonsa vallassa hiutasi Iisakki ohjasperillä
liinakkoa lautaselle. Ajopelit singahtivat portinpieleen, joka oli laho ja
suistui paikoiltaan. Iisakki kuului vielä maantiellä hihkasevan
liinakolle.

Isäntärenki alkoi sovitella kaatunutta portinpylvästä paikoilleen

puhellen:

— Hulluksi tulee vanha ihminen naimisiin mennessään, minkä

tuokin Iisakki. Viikkokausia on syömättä kutjottanut, öisin huokaillut
kamarissaan. Nyt se sen sai, letukkansa, mutta kyllä en minä olisi
mokomasta huolinut.

Iisakki oli toivonut saavansa viettää tämän juhlapäivänään

rauhassa vihollisiltaan, mutta siinä hän surkeasti pettyi. Suutari
Horttanaisen akka piti huolen, että Iisakin onni ja rauha särkyi
ainakin täksi päiväksi.

Rietula oli palkannut Horttanaisen akan pitämään varalta, milloinka

Iisakki aikoisi lähteä Eedlan kanssa pappilaan. Horttanaisen akka piti
vahtivuoroa öisin ja päivällä hänen miehensä.

Ja nyt oli akka huomannut, että Iisakki lähti Eedlan kanssa

kirkonkylään ajamaan ja vielä hihkaisi mennessään. Henki kurkussa
joudutti hän viestin tästä Rietulalle, joka rauhallisena kuorsaili
kamarissaan. Horttanaisen akka jyskytti Rietulan kamarin ovea ja
kiljuen selitti:

— Nyt se Kyrmyniska meni sen Eedlan kanssa… nyt se, rietas, vei
lautamiehen morsiamen. Nouskaa, hyvä isäntä!

Rietula oli pian jalkeilla kuultuaan tämän järkyttävän uutisen.

— Joko siitä on kauan, kun se lähti? kysyi.

 — Eikö tuosta jo tunti liene. Sanoin siinä ukolle, että tulisi sanaa
tuomaan, kun minua taas tuo sydänalusvika vaivaa, mutta johan
tämä…! Itseni piti lähteä, enkä kyennyt juoksemaan ja sillä keinoin
se rietas ehti…

— Miks'et sanaa tuonut silloin, kun Iisakki meni Miiruun? karjasi

Rietula. Jos nyt pappi ehtii panna ne kuulutuksiin, niin silloin…
mitenkäs silloin?

— Voi hyvä isä siunatkoon! Ei se kerkeä pappilaan, kun nyt Rie…

kun nyt lautamies vain suorii heti tielle…

Rietula ei ennen milloinkaan ollut joutunut niin pian matkavalmiiksi

kuin nyt. Ruoska vongahti hevosen lautasilla, joka lennähti tielle kuin
nuoli. Kylän koiria oli kokoontunut maantien varteen ja ne seurasivat
Rietulaa haukkuen ja pyörien ärhentelevästi hevosen jaloissa. Olipa
se menoa! Mutta tamma olikin saanut hyvää hoitoa isännältään
tämän matkan tekoa varten.
XVII.

Iisakki istui armaansa kanssa pappilan portailla ja odotteli rovastin

heräämistä. Kansliahuoneen portaat olivat itäpuolella kartanoa ja
hetki sitten noussut aurinko lämmitti suloisesti siinä istuessa. Iisakki
oli parhaimmalla tuulellaan. Selitettyään Eedlalle kaikki
talousasiansa ja suunnitelmansa, alkoi hän hyräillä käsi Eedlan
olalla:

"Ihanassa ryytimaass' oli montakin tuttuu. Sinun kanssasi,

neito nuori, on sydämellinen juttu."

Eedla hörähti nauramaan ja päivitteli:

— Jo on vanha mies kepsu, kun kehtaa syntisiä lauluja hyreksiä.

— Lauletaan sitten kotiin mennessä suvivirsi, kun näkyy näin

kaunis päiväkin tulevan, virkkoi Iisakki ja laitteli piipun poroja
poskeensa siltä varalta, että pian pääsisi rovastin kanssa juttuamaan
ja silloin ei sopinut poltella piipulla.

Jopa ilmestyi pihaan Iisakin puhemieskin, Kuivalan vanha

kellonsoittaja, joka tavallisesti esiintyi puhemiehenä Kuivalan
arvokkaimmilla isännillä. Juhlan kunniaksi oli hänellä hännystakki,