MKF1120 lesson 3

Cultural/social forces

Institutions and other forces that affect society's basic values, perceptions, preferences, and behaviours. People grow up in a particular society that shapes their basic beliefs and values. They absorb a world view that defines their relationships to themselves and others. The following cultural characteristics can affect marketing decisions: - Persistence of cultural values - Subcultures - Shifts in secondary cultural values

intermediaries

- also a customer - help an organisation to promote, sell and distribute its goods to final buyers. They include: - Resellers / distributors / retailers - Physical distribution firms - Marketing services agencies - Financial intermediaries

excessive customer focus

- customer value is more significant than share holder value

micro- environment

- customers - competitors -suppliers - intermediaries

macro-environemnt

- economic forces (e.g. currency exchange) - technological forces - political/legal forces - social/cultural forces - natural (PESTN)

internal environment

- employees - equipment -finance - functional responsibilities

3 dimensions of shareholders by Kotler

- excessive customer focus - excessive shareholder focus - the optimal balance perspective

SWOT Analysis

- part of marketing planning process - a framework for assessing an organisation and its marketing environment

suppliers

- provide inputs to the business - e.g. raw materials, equipments, resources - org need to maintain a good relationship with them - increased collaboration = competitive advantage - value chains: may be many suppliers connected in a chain

excessive shareholder focus

- shareholder value is more significant than customer value

stake holders in the micro environment

- suppliers - competitors - community - intermediaries - government - shareholders -organisation - other customers - value chains - presssure groups

definition of micro-environment

All those other organisations and individuals that, directly or indirectly, affect the activities of the organisation - e.g. competitors, customers, suppliers, intermediaries

competitor

An alternative provider of the offer sought by the market - can be direct or indirect - provide the same need but in different product

environmental scanning

An early warning system for the environmental forces which may impact a company's products and markets in the future - Scanning enables a company to act rather than react to opportunities and/or threats - should be long term (future)

community member

Any local non-governmental organisations that have the ability to mobilise public opinion towards a firm: - In favour - In opposition

2 major customer groupings

B2C and B2B

Definition of internal environment

Components of an organisation, such as the employees, physical tools and communication methods, which affect corporate culture

Economic forces

Factors that affect consumer buying power and spending patterns - Inflation - Interest rates - Employment levels - Income • Disposable • Discretionary

technological forces

Forces that affect new technologies, creating new product and market opportunities - New products - New manufacturing possibilities - New ways to communicate with customers - New ways to distribute goods and services

Political/legal forces

Laws, government agencies and pressure groups that influence and limit various organisations and individuals in a given society Example: - Legislation regulating business • Australian Competition and Consumer Commission (ACCC): CCA - Competition and Consumer Act (2010) - Ethics and corporate social responsibility

SWOT (External)

Opportunities and Threats

shareholders

Organisations have an obligation to those who "own" the company: by maximising the return on their initial investment

Natural forces

Resources that are needed as inputs by marketers or which are affected by marketing activities - threats from natural ecology (e.g. shortages of raw materials, increased cost of energy, increased pollution and government intervention in natural resource management)

employees

Source of a company's success: - Building customer commitment - Increasing customer willingness to pay - Improving level of customer satisfaction * Employee job satisfaction is related to customer satisfaction *Successful employee relations = competitive advantage

SWOT (Internal)

Strengths and Weaknesses

definition of macro-environment

The larger, wider forces that have influence over companies and economies - PESTN

marketing environment

Those conditions and influences impingeing or potentially impingeing on marketing and must be continuously monitored in order for an organisation to plan ahead

value chain

describes how the base of a product has been transformed into something of greater value, with each step of the process adding some value.

discretionary income

income remaining after deduction of fixed expenses such as basic living costs. (e.g. food, clothes, rent)

disposable income

income remaining after deduction of taxes and social security charges, available to be spent or saved as one wishes.

monitoring and responding to change in marketing environment

is important because it allows an organisation to plan ahead for changes before it occurs. It enables an organisation to act rather than react to opportunities or threats

the optimal balance perspective

shareholder and customer value both share equal balance

demographic/social forces

the study of human populations in terms of size, density, location, age, sex, race, occupation, and other statistics For example: - Changing age structure of population - Changing household - Geographic shift in population - Better educated and more white-collar population - Increased ethnic diversity