The Global Marketing
Environment
Friday, November 3
The marketing environment
Is composed of the actors and
forces that affect a company’s
ability to operate effectively in
providing services and products
to its customers.
It is useful to classify these
forces into 2 categories
Microenvironment and
macroenvironment
What’s the difference between the
two?
Microenvironment – immediate
environment like suppliers,
distributors, customers and
competitors.
Macroenvironment – economic,
social, political/legal forces.
Where does everyone fit in?
Legal
CUSTOMERs
Political
Macroenvironment
Suppliers
Individual
Distributors Social
Competitors
Economic
Microenvironment
Global Economic Forces
Economic Growth and Unemployment
Interest Rates and Exchange Rates
Development of Economic Areas
Economic State
The general state of both national and
international economies can have a
profound effect on an individual
company’s success or failure.
Most of the world’s economies went
through a significant growth period in
the late 1990s, driven mainly by
developments in telecommunications
and computing.
As an example
Ireland – Late 1990s car sales rose
from 70,000 to around 200,000 in
2000.
ipod – In 2005 saw a 60% increase
over the year before - $3.3 billion.
iPod's sales growth is expected to
cool from a sizzling 234% in 2005 to
just 18% in 2006.
Wonder why??
Economic Growth defined
Economic growth is driven by greater
use of inputs (such as labor, capital
and natural resources) and/or growth
in productivity.
This increase in an economy’s ability
to produce goods and services which
brings about a rise in standards of
living.
Economic Growth – what is
happening?
Switzerland, Finland and Sweden are the
world’s most competitive economies
according to The Global Competitiveness
Report 2006-2007, released by the World
Economic Forum in September 2006.
Denmark, Singapore, the United States,
Japan, Germany, the Netherlands and the
United Kingdom complete the top ten list,
but the United States shows the most
pronounced drop, falling from first to sixth.
The results
Low growth rates are reflected in high
unemployment levels, which in turn
affect consumers spending power.
Countries Unemployment rates (%)
Afghanistan 40% (2005 est.)
Norfolk Island 0% (2005 est.)
Nauru 90% (2004 est.)
United Arab Emirates 2.4% (2005)
France 9.9% (2005 est.)
United States 5.1% (2005 est.)
What can change unemployment
rates?
Interest and Exchange Rates
One of the levers that governments can
use to manage the economy is
interest rates.
Interest rates are the rate at which
money is borrowed by businesses
and individuals.
Throughout the world, interest rates are
historically low.
The Trend has been
House prices have been growing
Thus significant sales in global
furniture retailers like IKEA.
What other trends have you seen?
There was a 7.3 month supply of homes on the
market,
the largest supply of homes for sale by that measure
since April 1993.
Cycles….
Inflation is a rise in the general level of prices, as measured against
some baseline of purchasing power.
In the U.S. rates are changing
Exchange Rates
Exchange rates are the rates at which
one currency buys another. With the
formation of the European Union,
exchange rates between most
European countries are now fixed.
For the U.S. dollar, the euro, sterling,
and the yen are still traded on
variable rates.
Why would the dollar not be strong
today?
How much is your money worth?
1.00 Euro =1.27779 USD
United States Dollars
1 Euro = 1.43932 Canadian Dollar
1 Euro = 1,936.27 Italian Lira
What are the “HOT” countries
http://news.bbc.co.uk/1/hi/business/6074724.stm
Europe and Japan have suffered a sharp
economic slowdown over the past decade.
To rekindle growth, they need to encourage
competition (especially in the services
sector), which will, in turn, boost
productivity growth, the most desirable
source of growth in all economies.