Overview of Marketing Environmental Analysis

Running Head: MARKETING ENVIRONMENTAL ANALYSIS
MARKETING ENVIRONMENTAL ANALYSIS
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1MARKETING ENVIRONMENTAL ANALYSIS
Executive summary
Bounty Bags is a popular brand in Australian baby product industry. The company has a
dynamic range of product line but does not get enough market penetration. There are two major
reasons behind such situation, one is associated with high competitiveness and another is the lack
of marketing practice that Bounty Bags follows to survive and gain competitive edge in the
Australian market. This report investigates and evaluates all those situational analysis in the
Australian baby product market industry and at the same time provides strategies that can help
Bounty Bags in the long run.

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Table of Contents
Introduction......................................................................................................................................3
Analysis of external environment (DENPTC).................................................................................4
Demographic................................................................................................................................4
Economic.....................................................................................................................................4
Natural.........................................................................................................................................4
Political........................................................................................................................................5
Technological..............................................................................................................................5
Cultural........................................................................................................................................6
Analysis of internal environment.....................................................................................................6
The company...............................................................................................................................6
Porters five force analysis............................................................................................................7
Competitive rivalry..................................................................................................................7
Threat of substitutes.................................................................................................................7
Bargaining power of the customers.........................................................................................7
Bargaining power of the suppliers...........................................................................................8
Threat of new entrants.............................................................................................................8
SWOT/TOWS..................................................................................................................................9
Conclusion.....................................................................................................................................10
Reference.......................................................................................................................................12
Appendices....................................................................................................................................14
Appendix 1.................................................................................................................................14
Appendix 2.................................................................................................................................15
Appendix 3.................................................................................................................................16
Appendix 4.................................................................................................................................17

3MARKETING ENVIRONMENTAL ANALYSIS
Introduction
Bounty Bags is a well-known and one of the most trusted brand in the Australian market.
The company is not the same as the other business companies operated in the Australian market
rather it emphasises on the parents by providing support to their parents in their child raising
journey. It is can be stated that the organisation is dedicated to support the parents who are
expecting to have a child or children (bountyparents.com.au, 2020). Henceforth, a number of
different types of bags are provided to the customers for different type of uses. The bags can be
collected from most of the maternity hospitals and clinics in Australia. The parents can also buy
the bags through online purchasing. Basically, the organisation products all kind of baby
products from prams and carriers to the bath and health related baby items. In response to this,
the current report is going to emphasis on the market environment analysis of Bounty Bags.
Therefore, analysis over the external and internal environment of the industry is going to be
discussed in the report with DENPTC and SWOT framework.

4MARKETING ENVIRONMENTAL ANALYSIS
Analysis of external environment (DENPTC)
Demographic
As far as the demographic environment of the baby product industry of Australia is
concerned, Statista.com (2020) projected that that the industry is popular for its high end
products for limited number of customers who are belonged to the high to medium income
families. In addition to this, most of the customers are belonged to the urban areas as the demand
for the high end baby products can be seen among the urban population. Therefore, the
demography of the baby products in Australia is still restricted to the high and middle income
groups due to its high end product value and price.
Economic
In reference to Appendix 1, it can be stated that the economic growth in Australia is
fluctuating a lot with the 2.77% in 2016, 2.37 in 2017 and 2.94 in 2018. However, from the
current statistics of the government, the economic growth of Australia is increasing at a rapid
pace. Therefore, the affordability of the customers is also heightened to an extensive manner.
Moreover, the GDP of the country is also increasing with 520.58 point in the 4th quarter of the
financial year of 2019 (Refer to Appendix 2). Therefore, it can be expected that the baby product
industry will also boost and get high future scope to develop and expand its market further.
Natural
Environmental consideration is always a crucial aspect for the business organisations
operating in the market of Australia. The government is highly concerned about the
environmental degradation in the country and the role of the business corporates in it. Therefore,
to monitor and evaluate the business practice of the corporate entities the government enacts

5MARKETING ENVIRONMENTAL ANALYSIS
some regulations in the form of Environment Protection and Biodiversity Conservation Act 1999
(EPBC Act) (environment.gov.au, 2020). The act is entitled to protect the endangered species
and monitor the practice of the business organisations to a great extent so that it will be helpful to
maintain an ecological balance and at the same time it is also crucial to restrict the environmental
exploitation of the business corporates.
Political
There are fluctuations in the government stability in Australia. As referred to Appendix 3,
it can be stated that the current political stability index of Australia is 0.98 which is moderate in
nature. However, in the year 2016, it was 1.05. However, the government effectiveness inside the
country is very high with 1.6 points. From that point of view, it can be argued that the Australian
government is effective enough to monitor and regulate the business process and environment to
a great extent. The Australian government practices liberal and stern regulations for the benefit
of the business industries. Liberty is imposed on the autonomous decision making of the business
enterprises and at the same time firmness in regulation can also be seen that can shape a quality
and equal business opportunity for the business organisations.
Technological
Technological advancement is considered to be one of the major characteristics that the
Australian business industries are followed due to high competitiveness in the market. It is
important to note that the government endorsement towards procuring cutting edge technologies
is also a promising approach that can help the business organisations to introduce new
technologies in business. On the other hand, Stewart, Kent and Routledge (2016) opined that the
Australian market is highly developed and characterised by high competition. In response to this,
technological support and assistance will help the business companies to gain competitive edge

6MARKETING ENVIRONMENTAL ANALYSIS
in the market. Henceforth, use of advanced technologies is highly prevalent in the Australian
market irrespective of choice of industry.
Cultural
Culturally Australia is very vibrant and highly diverse. The cultural differences in the
country make it more challenging for the business companies to meet the expectation of the
people. However, people in Australia are highly aware of the quality and uniqueness of products.
In other words, Leigh and Triggs (2016) advocated that the Australian people are very much
concerned about the value of product. Therefore, for the baby product industry as well it is
pertinent to maintain the quality of the product and set the price of the product carefully so that it
will attract the customers and maximise the number of consumers also.
Analysis of internal environment
The company
Mission of Bounty Bags is to provide products that have high utility and important to the
parents. The Vision of the organisation is to create a strong customer base that will look for
quality baby products. Moreover, it is also a vision of the organisation to offer products that are
unique in design and have a pragmatic value to the customers. In response to this, a wide range
of products are available in the online store of Bounty Bags in terms of prams and carriers, car
seats, travel cots, home and nursery, clothing, health and learning toys (bountyparents.com.au,
2020). The product line of Bounty Bags is strictly focused on the benefits of the parents and a
cognitive development of the kids. Therefore, all kinds of necessary items are available in the
online store of Bounty Bags.

7MARKETING ENVIRONMENTAL ANALYSIS
Porters five force analysis
Competitive rivalry
Rivalry in the Australian market is an obvious and expected matter. Apart from the core
baby product manufacturers the retail giants are also considered to be rivals. For instance, the
market capitalisation of Coles and Woolworths in highly dominant. Famous baby product
manufacturers like Johnson and Johnson also encapsulate the market in a robust manner
(Stewart, Kent & Routledge, 2016). Therefore, it is a challenge for Bounty Bags to expand its
market properly and successfully in Australia. The competitive rivalry in the Australian market is
very high and challenging for the baby product manufacturing companies.
Threat of substitutes
The advent o technology has created immense transformation in the Australian industry.
The baby product industry is also get influenced. Therefore, a number of products are available
in the market that can increase the threat of substitution in the Australian baby product market.
However, innovation and value products are not easily replaceable (Leigh & Triggs, 2016).
Bounty Bags also focuses on the value products and offers the customer some unique designs
with high quality baby products. Therefore, it can be stated that there is low threat of substitution
for Bounty Bags as the organisation itself manufacturers a wide line of products.
Bargaining power of the customers
Power of the customers is always a determinant for the success of the industry and the
growth of the business organisations. According to the research of Niven et al. (2019) it can be
stated that in the globalised market, customers are always get higher power in compare to the
business entities. In case of thee Australian baby product market, the same picture can be seen

8MARKETING ENVIRONMENTAL ANALYSIS
where the baby product manufacturing companies are highly interested to follow the market
trend and develop products as per the interests and demands of the customers (You & Barry,
2016). Therefore, it can be stated that the bargaining power of the customers in the Australian
baby product market is very high and the manufacturing organisations are compelled to focus on
the high bargaining power of the customers.
Bargaining power of the suppliers
The relationship between the suppliers and the manufacturers is a very important and
delicate matter as the entire production depends on the relationship with he suppliers. As per the
research of Gundlach, Franke and Krotz (2019) if the number of suppliers in the market is high
then they do not have high power to influence the business organisation because the
manufacturer has plenty of supplier options, On the other hand, less number of suppliers can
heighten the bargaining power of the suppliers because the entire supply of raw materials are
controlled by them so they will decide the negotiation (Vallmuur, Lukaszyk & Catchpoole,
2018). In case of Australian baby product market, it can be stated that the suppliers and the
manufacturers are enjoyed moderate level of relationship where the interests of both the parties
are considered.
Threat of new entrants
The Australia baby product manufacturing industry is still blooming due to the market
trend of having high end products. It is crucial for the business organisations to follow the trend
and bring more efficacy to the practice so that the profitability will be increased (Nguyen et al.,
2018). The big companies are already encapsulated the Australia baby product market and the
small and medium scale companies also struggle to survive in the market. Despite of that fact, it
can be stated that there are still opportunities for the new entrants to enter into the Australian

9MARKETING ENVIRONMENTAL ANALYSIS
market as the market is still growing (Russell et al., 2017). Therefore, the threat of new entrants
in the Australian market is moderate in nature.
SWOT/TOWS
Internal factors
External factors
Strengths (S)
 Dynamic range of products
that can help the
organisation to maximise
customers.
 The price of the products
are based on the value of
the product that can be
affordable.
 Positive intent towards
parenting and child raising
that can provide
sustainability.
Weaknesses (W)
 Bounty Bags does not
have effective distribution
strategy.
 Lack of presence as brick
and mortar store obstructs
to create customer
recognition.
 Bounty Bags does not
have any effective
marketing strategy to
expand its business
successfully.
Opportunities
 The baby product market
is growing in Australia.
 Government endorsement
towards technology
introduction will help
Bounty Bags for
SO strategy
 Implementing product
differentiation.
 Initiating total quality
management practice.
WO strategy
 Crete a brand image
through physical presence.
 Choose traditional media
strategy along with the
digital marketing

10MARKETING ENVIRONMENTAL ANALYSIS
manufacturing better
products.
initiatives.
Threats
 High competitiveness in
the market.
 Lack of government
stability in Australia.
 High bargaining power of
the customers.
ST strategy
 Follow the competitive
pricing strategy so that it
will be effective to survive
in the competitive market.
 Manufacture products as
per the needs and trend in
the market.
WT strategy
 Effective distribution
strategy has to be
implemented.
 Bounty Bags should
follow a better customer
service facility.
 Starting promotional
campaigns is also
considered to be an
effective option for
Bounty Bags.
Conclusion
The report elucidates the current baby product industry situation in Australia and the
competitiveness existed in the Australian market. For understanding the external market
situation, DENPTC model has been followed. It helps to understand the external factors that can
influence the successful business initiative of Bounty Bags. On the other hand, the international
environment analysis relies on the Porters Five Forces strategy. On the basis of both the
environment analysis, the report develops a TOWS matrix that is relevant in the context of

11MARKETING ENVIRONMENTAL ANALYSIS
developing a better business practice for Bounty Bags in the competitive market of Australia.
There are potential aspects that the environmental analysis marks in terms of the government
instability, opportunities in the market and the blooming industry and high competitiveness.
Therefore, the strategies are also selected accordingly in the TOWS matrix based on the
strengths, weaknesses, opportunities and threats. It is important to note that prescribed strategies
can help Bounty Bags to expand its market further and gain competitive edge in the Australian
market. Therefore, it can be concluded that the report rightly points out different strategic aspects
of Bounty Bags and creates an in-depth analysis over the future prospect of the organisation
profoundly.

12MARKETING ENVIRONMENTAL ANALYSIS
Reference
bountyparents.com.au. (2020). Bounty Bags | Bounty Parents. Retrieved 20 March 2020, from
https://www.bountyparents.com.au/bounty-bags/
environment.gov.au. (2020). Department of Agriculture, Water and the Environment. Retrieved
20 March 2020, from https://www.environment.gov.au/resource/local-government-and-
australian-environment-law
Gundlach, G. T., Frankel, R., & Krotz, R. T. (2019). Competition policy and antitrust law:
implications of developments in supply chain management. Journal of Supply Chain
Management, 55(2), 47-67.
Leigh, A., & Triggs, A. (2016). Markets, monopolies and moguls: The relationship between
inequality and competition. Australian Economic Review, 49(4), 389-412.
Nguyen, N. P., Ngo, L. V., Bucic, T., & Phong, N. D. (2018). Cross-functional knowledge
sharing, coordination and firm performance: The role of cross-functional
competition. Industrial Marketing Management, 71, 123-134.
Niven, C. M., Mathews, B., Harrison, J. E., & Vallmuur, K. (2019). Hazardous children’s
products on the Australian and US market 2011–2017: an empirical analysis of child-
related product safety recalls. Injury prevention, injuryprev-2019.
Russell, C. G., Burke, P. F., Waller, D. S., & Wei, E. (2017). The impact of front-of-pack
marketing attributes versus nutrition and health information on parents' food
choices. Appetite, 116, 323-338.

13MARKETING ENVIRONMENTAL ANALYSIS
Statista.com. (2020). Toys and baby products-Australia. Retrieved 20 March 2020, from
https://www.statista.com/outlook/257/107/toys-baby/australia#market-globalRevenue
Stewart, J., Kent, P., & Routledge, J. (2016). The association between audit partner rotation and
audit fees: Empirical evidence from the Australian market. Auditing: A Journal of
Practice & Theory, 35(1), 181-197.
TheGlobalEconomy.com. (2020). Australia GDP, billion currency units, December, 2019 - data,
chart | TheGlobalEconomy.com. Retrieved 20 March 2020, from
https://www.theglobaleconomy.com/Australia/gdp_current_local_currency/
Vallmuur, K., Lukaszyk, C., & Catchpoole, J. (2018). Monitoring Injuries Associated with
Mandated Children’s Products in Australia: What Can the Data Tell Us?. International
journal of environmental research and public health, 15(10), 2077.
You, K., & Barry, M. (2016). Intra-industry competition among employer associations: a case
study of the retail sector. Labour & Industry: a journal of the social and economic
relations of work, 26(2), 120-137.

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Appendices
Appendix 1
Image 1: Economic growth-Australia
(TheGlobalEconomy.com, 2020)

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Appendix 2
Image 2: GDP- Australia
(TheGlobalEconomy.com, 2020)

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Appendix 3
Image 3: Political stability-Australia
(TheGlobalEconomy.com, 2020)

17MARKETING ENVIRONMENTAL ANALYSIS
Appendix 4
Image 4: Government effectiveness-Australia
(TheGlobalEconomy.com, 2020)