The Big Picture – Market

analysis – Macro and

Category Factors
Week 2
Lecture 2
UMKD6Q-15-3
Global Marketing Management

Christine Comrie 2023-24 UMKD6Q-15-3

What we will cover today
• A VUCA world
• The first two stages of the PMA model (external macro and category
factors)
• The impact of macroenvironmental factors
• Understanding category market factors.
• The importance of the so what? question

Christine Comrie 2023-24 UMKD6Q-15-3

THE WORLD IS “VUCA”
Volatile, Uncertain, Chaotic,
Ambiguous
Marketing leaders must
embrace change
• Diageo moves senior marketers
around the world  fresh challenges
and expand the scope of their thinking

The world is VUCA

Christine Comrie 2023-24 UMKD6Q-15-3

Multiple layers of uncertainty
Foreign Environments
(uncontrollable)
Political,
Domestic Environment Economic
Legal
(uncontrollable) Forces
Forces
Competitive
CONTROLLABLE Structure
Cultural Firm Characteristics
Forces Political/ Competitive
Legal Price Product Forces
Forces
Promotion Channels
Research
Economic
Climate
Geog &
Infrastructure Level of
Technology
Structure of
Distribution
Christine Comrie 2023-24 UMKD6Q-15-3
(Cateora & Graham, 2008)
Christine Comrie 2023-24 UMKD6Q-15-3
So what??

Macro factors:
Global PESTEL
considerations

(Doole & Lowe, 2012:6)

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Impact of
global
pandemic

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PESTLE – a change of leader

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PESTLE - International
Relationships
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PESTLE -Trade Blocks
• Main Trade Blocks
• EU (European Union)
• NAFTA (North American Free Trade
Agreement - USA, Canada and Mexico)
• Mercosur (Customs union - Brazil,
Argentina, Uruguay, Paraguay and
Venezuela)
• ASEAN Association of Southeast Asian
Nations
• COMESA (Common Market of Eastern and
Southern Africa)
• SAFTA (South Asian Free Trade Area -India
and Pakistan)
Understanding ASEAN • Pacific Alliance (regional trade agreement -
Chile, Colombia, Mexico and Peru)
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 PESTLE - BREXIT
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 PESTLE: Government intervention
Make in India campaign

• Objective: making India global

manufacturing hub
• Build on India’s capabilities
• Incentives aimed at foreign
companies to set up their facilities
in India
• Policy reforms and process
improvements
•  increased FDI
• India has become one of the most
favourable investment destinations
in the world.

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 PESTLE
Global recession

Christine Comrie 2023-24 UMKD6Q-15-3

PESTLE – RECESSION
IN SOUTH AFRICA
Recession (Rising living costs; growing job insecurity;
< cost of fuel and electricity; uptick countered by
covid cases
-->Altered shopping habits
• 81% consumers have cut spending / switched to more affordable
brands.
• 84% consumers not buying nonessential items
• Spending on big ticket items has been cut (jewelry, house, car)
• People shopping locally to avoid transport costs
• Shopping a Spaza stores – informal convenience stores for top up
purchases.
• Smaller pack sizes to get affordable price point.
• Larger pack sizes for value if can afford it.

Christine Comrie 2023-24 UMKD6Q-15-3

 E
P STLE–
Rising Middle
Classes in
developing
countries

Christine Comrie 2023-24 UMKD6Q-15-3

PESTLE
• Frugal flexing
• Globally < 15-24 yr olds buying fake
products
• Tik Tok
• #dupes 2.1 bn views
• #reps 1.9bn
• Cost of living.
• Social media thing = frugal flexing =
showing off products/ lifestyles that look
more expensive than they are.
• Online shopping has made this easier.
• Now a trend – fakes are celebrated

Christine Comrie 2023-24 UMKD6Q-15-3

PESTLE: The
impact of obesity
According to WHO
• Worldwide obesity has tripled since 1975
• 39% of adults overweight and 13% obese
(2016)
• childhood obesity = one of the most serious
public health issues of the 21st century
• 39 million children under 5 overweight or
obese in 2020

WHO (2021)
Christine Comrie 2023-24 UMKD6Q-15-3
PeStle – companies working
against obesity
• Unilever is updating its principles for marketing food and beverages to youngsters.
• End 2020 Unilever will:
• No longer target marketing to children under the age of 12 across traditional
media
• No longer target marketing to children aged under 13 on social media
(Facebook and other major social networks don’t allow users under that age)
• Implement strict controls around the placement and content of its ads
• not to use any influencers, celebrities or social media stars who appeal
primarily to children under the age of 12
• limit the use of cartoon characters in its advertising
• every ice cream in its children’s range will contain no more than 110 calories
and a maximum of 12g of sugar per portion.

Christine Comrie 2023-24 UMKD6Q-15-3

 PESTLE: Brands tapping into meat-free
market
• Fierce competition in alternative meat
industry
• In the UK, 29% of all evening meals
consumed are now meat-free
• Analysts at Barclays suggest the market
could be worth £140bn globally within
the next decade.
• Traditional manufacturers such as Kerry
Foods and Birds Eye are investigating the
opportunity
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PESTLE – tapping into
consumer trends. Nestle
spots an opportunity in
China. (WARC, 2020)

• Nestle operations in China > 30 years.

• China’s meat free market expanding rapidly
• < 33.5% since 2014
• Valued at $10 bn 2018  estimated at $11.9 bn 2023
• Developing company’s first production facility in Asia for
plant-based products
• Investing $103.6 m to expand existing facilities in Tianjin
Economic Technical Development zone
• Macro factors:
• Swine flu outbreak
• Trade tensions with US
• Growing trend in China towards healthier eating
options

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 PESTLE -Global
Corporate Social
Responsibility
• “Perhaps we have the opportunity to be a
different type of global company, a global
brand that can build a different model, a
company that is a global business, that
makes a profit, but at the same time
demonstrates a social conscience and gives
back to the local market.”
• Howard Schultz, CEO, Starbucks

Starbucks Global Corporate Social Responsibility

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Hyundai – CSR – Partnership
with Healthy Seas
• Healthy Seas – ocean conservation organisation
• Partnership aimed at combating ocean pollution,
nurturing sustainable marine ecosystems and
supporting a circular economy.
• Hyundai - world ocean day

Christine Comrie 2023-24 UMKD6Q-15-3

 Landrover and red
cross
• The International Federation of Red Cross
and Red Crescent Societies (IFRC) and
Land Rover will premiere a series of short
films showing how local teams are the
future of emergency response efforts.
• Launching today is the first film in a four-
part series called ‘On the ground:
Humanitarians in Action’.

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PESTLE
• Big Data
• Social Media
• Global Marketplace
• Manufacturing techniques
• Distribution /logistics
• Platform economy
• Disruptive technology
• Word of Mouse

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PESTLE - Digital
Transformation

• Increased in-app ordering and delivery

• Discount coupons  digital loyalty programmes and
media
• Sales of Burger King products from digital channels
increasing..
• Omnichannel approach encouraged

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 PES TLE: Born Globals
What is Trunki? Discover the Ultimate Travel Solution | Trunki
UK

Happy Travels with Trunki! - YouTube

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PESTLE:
DISTRIBUTION
• Alternative route to market to
traditional distribution channels
• Omnichannel – seamless approach
demanded by consumers
• Networked system for managing
supply chain
• Virtual market place, trading floor
and auction house.
• Opens up market place for SMEs

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PESTLE -The ultimate
digital experience –
BMW’s Digital First
Brand Journey.
• 30% of buyers globally ready to
purchase cars online
• Sales from physical dealerships >
• BMW digitising consumer purchase
and experience to tap into trend
• Global online car buying market
2021 – 2030 forecast to grow at
12.2% compound growth each year
• Forecasts 25% revenue from online
sales in future.
•
https://www.bmw.co.uk/en_GB/all
-models.html
Christine Comrie 2023-24 UMKD6Q-15-3
 Case Study – micro-
multinationals

•Dharavi slum in
Mumbai – hotbed of
entrepreneurial activity
PESTLE

Christine Comrie 2023-24 UMKD6Q-15-3

 Case Study – Micro
–multinationals
• eBay India supports these
entrepreneurs to start a business
• Online marketplace  provides Ho
platform for small businesses to sell w
eB
goods outside India ay
h elp
• eBay launched Powership – a ed
my
platform integrating Indian courier b us
companies. ine
ss
• Standardised the payment
mechanism (PayPal) – global payment
mechanism
• Learning centres – handholding for
sellers who are not tech savvy.
• Account managers – contacting
customers and organising shipment
Christine Comrie 2023-24 UMKD6Q-15-3
PESTLE: The vicious circle of technology and
competitive advantage

New Technology

Competitors must Practical applications

follow with “Me-too” identified

Change of industry
standards or new
customer Firm embraces new
expectations set technology

Firm develops new

competitive
advantage

Doole and Lowe (2012)

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PESTLE
Alcohol legislation
• Sri Lanka – 2006  all public
advertising of alcohol barred
• Russia - 2013  Alcohol ads on
TV, radio, print, internet, public
transport banned
• Turkey – 2014  all alcohol
advertising banned
• USA – Placement of advertising

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PESTLE: Global
cinema chains eye
Saudi opportunities
• CONTEXT:
• 35-year ban on cinemas
• Crown Prince Mohammed
bin Salman liberalising
reforms
• Saudi Arabia population 30
million
• First cinema opened on 18th
April 2018 in Riyadh
• 300 cinemas by 2030
• Biggest expat population =
Indian  opportunities for
Bollywood.
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PESTLE - environmental

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PESTLE Absolut Vodka – paper bottles
• 3 month trial in UK.
• Bottle piloted by Absolut at
festivals in UK and Sweden –
Absolut Mixt drinks.
• Bottles = 57% paper with
integrated barrier of recyclable
plastic
• Working with Paboco
Paboco
| Changing the industry for goo
d
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PESTLE – Companies tackling climate change

Unilever – sustainable sourcing.

• Upstream operations  more than 60% of direct value
chain emissions  efforts to reduce emission.
• replace fossil-fuel derived carbon with renewable or
recycled carbon in all its cleaning and laundry product
formulations by 2030
• Deforestation-free supply chain (end 2023) across
palm oil, soy, paper and board, tea and cocoa.
• Collaborations with technology partners and use of
satellite imaging, AI, blockchain, and geolocation data
improve transparency and traceability,  identify
and act on deforestation risk more quickly.
• Empower smallholder farmers to use regenerative
agricultural practices  improve soil quality and
increase yields.
• Encourage suppliers to reduce emissions

Christine Comrie 2023-24 UMKD6Q-15-3

So what?
This is the question you need to ask when you do a PESTLE analysis to
make it an analysis rather than a description

And ensure that the points that you make are relevant!!

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Potential Market Assessment (PMA) model (Comrie and
Hunt-Fraisse (2015)

Filter out unsuitable

markets

Filter out unsuitable

markets

Filter out unsuitable

markets

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Summary – When thinking about a new
market
Macro (make sure these are relevant to your
category – no need to use all PESTLE just the most
salient ones) Category
• Government level relationship • Market size - growth / decline?
between the home and overseas
market • Competition and shares
• How open that overseas market is • Indirect competition
to trade
• Trade barriers
• Habits and attitudes
• Disposable incomes- comparability • Distribution channels
• Government incentives • Seasonality?
• Consumer trends
• Legislation
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How to succeed with your Macro and
Category analysis.
• Engage with the assessment brief and the marking rubric
• Ask if you do not understand
• Start your research now…. Don’t leave it too late.
• In depth research required.
• Make sure you use the library databases!
• Don’t use journal articles!
• In text citations for all your points.
• Is your point valid – ask yourself the so what? question.
• Be analytical not descriptive – so what?
• Don’t use all PESTEL factors – consider the most important ones.
• Think about your presentation – branding / clarity
• Don’t put an essay on Powerpoint.
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