Chapter 3 Foundations of Marketing

Chapter 3: Analyzing the Marketing Environment Ms DANG THI MAI HUONG (SARAH) Faculty of Economics and Management International School of Thai Nguyen University Email: sarahhuong11@gmail.com Topic Outline • The Company’s Microenvironment • The Company’s Macroenvironemnt • Responding to the Marketing Environment The Marketing Environment The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers Microenvironment consists of the actors close to the company that affect its ability to serve its customers the company, suppliers, marketing intermediaries, customer markets, competitors, and publics The Company’s Microenvironment The Company Marketing must consider other parts of the organization including finance, R&D, purchasing, operations, and accounting Marketing decisions must relate to broader company goals and strategies • Marketing managers must work with all departments of a company • All departments have an impact on the marketing department’s plans and actions • ―Think Consumer‖ The Company’s Microenvironment Suppliers • Provide the resources to produce goods and services • Treated as partners to provide customer value The Company’s Microenvironment Marketing Intermediaries • Help the company to promote, sell and distribute its products to final buyers The Company’s Microenvironment Types of Marketing Intermediaries Resellers Physical distribution firms Marketing services agencies Financial intermediaries SWOT Analysis • • • • Strengths (Internal) Weaknesses (Internal) Opportunities (External) Threats (External) • • • • Strengths What advantages does your organization have? What you better than anyone else? What unique or lowest-cost resources can you draw upon that others can't? • What people in your market see as your strengths? • What factors mean that you "get the sale"? • • • • Weaknesses What could you improve? What should you avoid? What are people in your market likely to see as weaknesses? • What factors lose you sales? • Opportunities • What good opportunities can you spot? • What interesting trends are you aware of? • • • • Threats What obstacles you face? What are your competitors doing? Are quality standards or specifications for your job, products or services changing? • Is changing technology threatening your position? • Do you have bad debt or cash-flow problems? • Could any of your weaknesses seriously threaten your business? PEST Analysis • • • • Political factors Economic factors Socio-cultural factors Technological factors • What is PEST analysis? This analysis is essential for an organization before beginning its marketing process • Consists of internal environment and external environment Political factors • This is the most important influence on the regulation of any business - How stable is the political environment - Influence the government policy/law on your business - Government’s policy on the economy - Political system is responsible for law marketing Political factors – Contd • • - Control on Pricing – like sugar, drugs, etc Government Policies on the Economy Role of Public Sector Role of Private Sector Role of Joint Sector Economic factors • - Government Outlook Towards Bank financing Interest Rate Incentives for Exports Restrictions for Imports Inflation Labour policies Economic factors – Contd • Level of Government Spending • Business Cycles Socio - cultural factors • - Demographics and distribution of income Division of Population – Male/Female Age group of the population Disposable Family Income *) Disposable Income in the hands of the different age groups *) Education level of the age groups • Life style changes & consumerism - Attitude to living *) Different age, groups *) Joint living and nuclear families *) Reach of the media to the population Technological factors • New discoveries & innovations • Speed & Cost of technology transfer Responding to the Marketing Environment • Many companies feel the marketing environment is uncontrollable • An environmental management perspective takes action to sway the marketing environment • Take a proactive rather than a reactive approach [...]... Competitors • Firms must gain strategic advantage by positioning their offerings against competitors’ offerings • To be successful, a company must satisfy needs and wants of consumers better than competitors The Company’s Microenvironment The Company’s Macroenvironment Demographic Environment Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and... time and companies must keep up with them Demographic Environment • Changing age structure of the population – Baby boomers include people born between 1946 and 1964 – Most affluent Americans Demographic Environment Generational marketing is important in segmenting people by lifestyle of life state instead of age Demographic Environment More people are: • Divorcing or separating • Choosing not to... are affected by marketing activities • Trends – Shortages of raw materials – Increased pollution – Increase government intervention – Environmentally sustainable strategies Technological Environment • Most dramatic force in changing the marketplace • Creates new products and opportunities • Safety of new product always a concern Political Environment Political environment consists of laws, government... more open to change and include people’s views of themselves, others, organizations, society, nature, and the universe Cultural Environment Shifts in Secondary Cultural Values • People’s view of nature – Some feel ruled by it – Some feel in harmony with it – Some seek to master it • People’s view of the universe – Renewed interest in spirituality The Marketing Environment and Competitor Analysis •... government agency enforcement • Increased emphasis on ethics – Socially responsible behavior – Cause-related marketing Cultural Environment Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors Cultural Environment Persistence of Cultural Values Core beliefs and values are persistent and are passed on from parents to children and... Environment Economic environment consists of factors that affect consumer purchasing power and spending patterns Economic Environment • Changes in income • Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price Economic Environment Changes in Consumer Spending Patterns • As income rises: – The percentage spent on food declines... to have children • Increased number of working women • Stay-at-home dads Demographic Environment • Changes in the workforce – More educated – More white collar Demographic Environment Increased Diversity Markets are becoming more diverse – International – National • Includes: – Ethnicity – Gay and lesbian – Disabled Economic Environment Economic environment consists of factors that affect consumer purchasing... opportunities can you spot? • What interesting trends are you aware of? • • • • Threats What obstacles do you face? What are your competitors doing? Are quality standards or specifications for your job, products or services changing? • Is changing technology threatening your position? • Do you have bad debt or cash-flow problems? • Could any of your weaknesses seriously threaten your business? PEST Analysis