Introduction
The marketing environment is very
crucial to the marketing process as it is the one that determines the content
of the message and how the market perceives it. The components of the marketing
environment that ought to be considered include economic, financial, cultural,
social, political, legal, and technological forces. Each of the different
forces has different implications for the marketer. For instance, the cultural
framework of a country determines the manner in which a message would be
perceived while the legal forces dictate the limits for advertisers (Jena and
Parida, 2012). Australia is a market that can be said to be characterised by
high internet usage and growing preference for online commerce. It is also
characterised by political stability and an entrenched restraint from
interfering with private enterprise (Miniwatts Marketing Group, 2012; Schidor,
2013). These and other factors in its marketing environment have far reaching
implications as discussed in the sections below.
International marketing environment
in Australia
It is important that the marketing
environment analysis is comprehensive and this makes it important to ensure
that all the relevant forces are analysed. These forces include the economic,
financial, cultural, social, political, legal, and technological forces. The
economic forces refer to factors such as the economic growth trends, the level
of disposable incomes, and the distribution of income among the different
classes in the society (Jan-Benedict, 2001). This analysis therefore determines
the ability of the target customers to afford products as well as how to create
an effective segmentation strategy. Australia is hailed as the best economic
performer among the developed countries (Euromonitor, 2013). Its GDP growth
rate has been impressive with current estimates being at 2.5%, down from 2002’s
rate of 2.6% (Australia Economic Indicators, 2013). The unemployment rate is also
low at 5.6% with inflation rates being at 2.4%. This means that even though the
economic growth rate my may low, the economy is very stable and the population
is in a position to spend on goods and services. The financial infrastructure
in Australia is well established and is characterised by the presence of easily
accessible banks and other financial services providers. This infrastructure is
crucial in facilitating international and online trade. Marketers can exploit
this to market online products and services and penetrate the market with
relative ease.
Culture influences the way in which
people communicate and how they perceive messages. The principle of relativity
applies when it comes to culture and it is evident in scenarios where the same
message is perceived differently by people from different cultures
(Jan-Benedict, 2001). The Australian society can be said to be multicultural.
Apart from the native aboriginal communities, the Australian society is made up
of immigrants who originated from different European countries including the
UK, Germany, Italy, France and others (Seetaram, 2012). The country has also
maintained lenient immigration laws allowing immigrants from Asian countries to
settle in. The culture is therefore multicultural and therefore quite
compatible with the emerging global culture which is dominated by the Western
ideology. The national culture of Australia is as shown in the figure below:
Source: Hofstede, 2013
The power distance index (PDI) is at 31,
a very low score (Hofstede, 2013). This means that the Australian society
espouses democracy, consultation and accountability in leadership. Marketing
messages touching on power relations should therefore conform to this. Another
notable cultural dimension is the individualism index where Australia is
notably strongly individualistic (Hofstede, 2013). In marketing,
individualistic societies prefer marketing messages that highlight on
individual brilliance and not in accommodation as a part of the society
(Soares, Farhangmehr and Shoham, 2007). This is however not to say that
association of brands with class would be futile as the traditional class
relations where members of the lower classes aspire to belong to the higher
ones persist. In general, Australian culture is widely described as a Western
culture where it is comparable to cultures such as American and British
cultures (Soares, Farhangmehr and Shoham, 2007). This imposes little burden on
multinationals from these countries to learn and understand their culture.
The Australian population is a maturing
population. The trend has steadily moved towards the population of the younger
generations reducing having fallen from the highs of 31% in 1970 to 22% in 2002
(Australian Government, 2013). This ageing is attributed to low fertility
levels as well as enhanced life expectancy due to improved standards of living.
While this trend generally reflects on the trends in the developed world, the
developing world is a stark contrast where the population continues to be
significantly younger (Cubit and Meyer, 2011). Nevertheless, these demographic
patterns are likely to impact marketing decisions. In terms of trends in social
preference for products, the luxury market segment is among the fastest growing
segments in Australia. Preference for innovation is growing as is the tendency
to interrogate marketing messages through enhanced communication over the
internet and other forums.
The political and legal factors tend to
be discussed concurrently due to their interconnectedness. While political
forces may be oversimplified to mean factors such as the political stability of
the country, they also refer to the attitude of the ruling class towards free
enterprise and this is often reflected in the laws that they legislate (Kasza,
2011). Australia is a mature democracy with a high level of political
stability. The competition laws regulate against unfair practices such as
direct and adverse mention of competitors in advertisement. The privacy
legislation restricts organisations from gathering personal information from
consumers and using them without their consent (Smith and Blake, 2013). This
could be limiting to marketers who may want to mine data and use it for direct
marketing through the internet. The anti-spam regulations stop marketers from
spamming target consumer’s mail boxes. In general, the competitive landscape in
Australia is stringently regulated and the marketers must ensure that they are
well informed to avoid violation which could in turn lead to heavy penalties as
prescribed by the law.
Technological advancement in Australia
can be said to be very high, especially when it comes to communication
technology. Internet usage in Australia is recorded to have risen to 80.5% in
2012 and this means that virtually the whole population can be reached via the
internet (Miniwatts Marketing Group, 2012).
The internet changes how people interact with platforms such as the
social media becoming very strategic for purposes of socialisation. These
technological advancements also apply to the growing popularity of e-commerce
where more Australians prefer to shop and transact from the comfort of their
homes. This is facilitated by the presence of appropriate infrastructure with a
notable fact being that about 62% of Australians aged 15-65 own a smartphone
(Riccio, 2013). This is in addition to other software linked to financial
institutions that not only facilitate transactions but also help in curbing
cybercrime.
Challenges for marketers
The Australian marketing environment is
heavily regulated. This means that a wrong turn could be very costly and the
marketers need to be conversant with all the laws and regulations that are
relevant to marketing. This is a challenge as it could limit creativity hence
make it difficult for a marketer to distinguish their brands from the others in
the market. In some cases, there are stringent restrictions. For instance,
tobacco advertising is banned and this would be an insurmountable challenge for
marketers intending to penetrate that market (Kasza, 2011). The same applies to
the restriction on privacy of information. While the organisation would like to
utilise customer data for prediction of demand trends and direct marketing,
this may be prohibited unless where permission has been obtained directly from
the customers. This can be very limiting to the marketer.
The other challenge relates to the
changing preferences for products in favour of those that reflect the latest
trends. The consumers are abandoning known brands in favour of products that
they find exciting and matching up to their taste (Schidor, 2013). This prompts
the international marketer to revaluate their products and approach to
communication in order to succeed in the market. The challenge is therefore to
invest in continuous research and development and ensure that products produced
and marketed capture the imagination of the consumers.
The cultural challenge may be low for
marketers from most of the developed world. This is due to the fact that the
global culture is well established in most of the developing countries and
Australia would be no different (Seetaram, 2012). However, the situation would
be different for those from culturally distant regions such as from Asia. It
would be most rational to invest in understanding the culture and overcoming
any barriers that may exist before effective marketing can be done.
Opportunities for international
marketers
The main opportunity is related to
trends the use of the internet. The fact that over 80% of the population can be
found via the internet is a great opportunity for brands to reinvent their
marketing approaches and capture the loyalty of such customers (Miniwatts
Marketing Group, 2012). Studies indicate that the contemporary internet user is
more interactive and is highly motivated when there is a direct engagement with
the brand. This heightened interaction improves brand loyalty where the
communication process has been satisfactory. In addition to its wider reach,
the internet tends to be much cheaper and contains sufficient space for vast
amounts of information about products to be displayed (Jena and Parida, 2012).
The consumers are therefore better informed about a product and this makes up
for any lapses in the advertisement message where there may be limited focus on
the full attributes of the products. The other opportunity that is presented by
technology is the option of utilising e-commerce. This approach enables ease of
transaction and also data analysis since all communications with the
prospective customers are recorded. This information can be harnessed to
facilitate more effective direct marketing at a future time.
The fact that the population is aging
could be disadvantageous for those who focus on the youthful population.
However, it is an immense opportunity for marketers to consider targeting the
aging populations. It is expected that these aging persons are likely to have
higher incomes and could therefore be able to afford high value products (Cubit
and Meyer, 2011). The other characteristic that is generally attributed to the
aged is their reduced tendency to experiment with new products. This means that
they tend to be loyal to a brand or a set of brands. A good marketing
strategist would be able to focus on building their loyalty and this could
prove to be very beneficial this would make the brand very competitive in the
market.
The fact that Australia is presumed to
have a culture that is similar to those in the Western country could also be a
major opportunity. Irrespective of the level of similarity between cultures,
there is bound to be elements that are different and can be utilised to
identify with the local population. While this could be a risky and arduous
task, it is expected that any successful discovery would lead to the creation
of a marketing message that resonates very well with the target audience (Jena
and Parida, 2012). Alternatively, a marketing campaign can be launched that
could be aimed at shaping the national identity. If successful, this could give
the brand or company in question and undoubted advantage over the rivals in the
market.
The stable economic performance and the
presence of financial infrastructure are good for business. Marketers would
ordinarily stand a good chance of success if they are strategic in their
approaches and this initial success would be crucial in generating the
financial muscle and knowhow to expand further.
Conclusion
The Australian marketing environment is
good for business. The economy is stable and the population is almost fully
employed. The market is also technologically advanced hence presenting the
opportunity for successful marketing by utilising modern communications
technology. Marketers can also utilise changing trends and overcome challenges
to the long term effectiveness of their businesses to emerge stronger. For
instance, the challenge of changing preferences can be overcome through mastery
of innovation and this can make an organisation even more competitive in the
market. While seeking to utilise the opportunities presented, the international
marketer ought to remain aware of the regulatory framework in order to ensure
that they operate within the established laws. The overall assessment of the
Australian marketing environment is that it is good for business.
References
Australia, Economic Indicators, 2013. Australia, Economic Indicators. (Online)
Available at: http://www.tradingeconomics.com/australia/indicators (Accessed 22
November 2013)
Australian Government, 2013. Australia's Demographic Challenges. (Online) Available at:
http://demographics.treasury.gov.au/content/_download/australias_demographic_challenges/html/adc-04.asp
(Accessed 22 November 2013)
Cubit, K.A., Meyer, C., 2011. Aging in Australia. The Gerontologist, 51(5), pp.583-589
Hofstede, 2013. National
Culture: Australia. (Online) Available at:
http://geert-hofstede.com/australia.html (Accessed 22 November 2013)
Jan-Benedict, E.M., 2001. The role of national
culture in international marketing research. International Marketing Review 18(1), pp. 30-44
Jena, A.B., Parida, R.C., 2012. International
Marketing: Application Of Marketing Intelligence And Knowledge Management For
Sustainable Growth. International Journal
of Management Research and Reviews 2(5), pp. 766-773
Kasza, K.A. et al., 2011. The Effectiveness of
Tobacco Marketing Regulations on Reducing Smokers’ Exposure to Advertising and
Promotion: Findings from the International Tobacco Control (ITC) Four Country
Survey. Journal of Environmental Research
in Public Health. 8(2), pp. 321-340
Miniwatts Marketing Group, 2012. Internet Usage and Population Statistics. (Online)
Available at: http://www.internetworldstats.com/stats6.htm (Accessed 22
November 2013)
Riccio, J., 2013. Examining the rise and rise of e-commerce: 2013 retail trends.
(Online) Available at: http://www.digitalpulse.pwc.com.au/retail-trends-2013-one/
(Accessed 22 November 2013)
Schidor, A., 2013. Changing Consumer Attitudes Add Lustre To Luxury As The Sector Tops
Au$1 Billion. (Online) Available at:
http://www.moluxury.com.au/themodown/?p=6432 (Accessed 22 November 2013)
Seetaram, N., 2012. Immigration and international
inbound tourism: Empirical evidence from Australia. Tourism Management, 33(6), pp.1535-1543
Smith, J., Blake, M., 2013. Infant food marketing
strategies undermine effective regulation of breast-milk substitutes: trends in
print advertising in Australia, 1950–201. Australian
and New Zealand Journal of Public Health, 37(4), pp. 337-344
Soares, A.M., Farhangmehr, M., Shoham, A. 2007.
Hofstede's dimensions of culture in international marketing studies. Journal of Business Research 60(3), p.
277
No comments:
Post a Comment