Chapter 2: The marketing environment and market analysis
What are marketing metrics?
- Measures used to assess marketing performance - Marketing metrics are essential to marketers • Need to articulate ROI: • Continued funding • Allocate resources • Build a database of various ROIs to compare effectiveness of various programs • Marketers need to predict what they think if likely to occur in order to plan how they will compete in the market
How do political forces affect marketing?
- lobbying for favourable treatment at the hands of the government - lobbying for a 'light touch' approach to regulation - the very large market that the government and its bureaucracy comprise - the ability of political issues to affect efforts at international marketing.
What are employees?
- responsible for carrying out the work required to meet departmental objectives.\ - the 'face' of the organisation
What is Monopolistic competition?
Numerous competitors offer products that are similar, prompting the competitors to strive to differentiate their product offering from others
What is Pure competition?
Numerous competitors offer undifferentiated products. No buyer or seller can exercise market power.
What is monopsony?
The market situation where there is only one buyer.
What does middle management do?
- typically responsible for a department or a geographic region. - makes decisions about the overall objectives and strategy of the department or geographic region for which they have responsibility. - aims to make sure the objectives for their department or region are aligned with the objectives of the organisation as a whole.
What is internal framework?
A cultural framework and a process to achieve strategic alignment between front-line employees and marketing. internal marketing is a collection of activities, processes, policies and procedures that treat employees as members of an internal market who need to be informed, educated, developed and motivated in order to serve clients more effectively.
What is Oligopoly?
A small number of competitors offer similar, but somewhat differentiated, products. There are significant barriers to new competitors entering the market.
What does the marketing environment refer to?
All of the internal and external forces that affect a marketer's ability to create, communicate, deliver and exchange offerings of value. The factors and forces within the marketing environment can be classified as belonging to the internal environment, the micro environment, and the macro environment
What is Market planning?
An ongoing process that combines organisational objectives and situational analyses to formulate and maintain a marketing plan that moves the organisation from where it currently is to where it wants to be.
What is the micro environment?
Consists of customers, clients, partners and competitors. Unlike the internal environment, the micro environment is not directly controllable by the organisation. The organisation can, however, exert some influence on the customers, clients, partners, competitors and other parties that make up its industry
What is Total budget competition?
Consumers have limited financial resources and therefore must make choices about which products to consume and which to forgo. In this sense, organisations are competing against all alternative ways the consumer can engage in an exchange of value.
What is generic competition?
Consumers often have alternative ways to meet their product needs. The same want or need can be satisfied by quite different products. This is known as substitutability.
What should the marketing plan include?
Executive Summary Introduction Situation Analysis Objectives (SMART) Target Market Marketing Mix Strategy (7P's) Budget Implementation Evaluation Future Recommendation
What are economic forces?
Factors that affect how much people and organisations can spend and how they choose to spend it. • Economic forces include income, prices, the level of savings, the level of debt and the availability of credit. All directly and immediately impact on business and consumer confidence
How is internal marketing used?
Internal marketing is practised in three main ways. 1. the primary role of internal marketers is to manage internal communications to ensure that employees' actions are aligned with company goals (internal communications). 2. internal marketing managers use market research to understand employees' needs and demands (internal market research). 3. they provide the training needed by employees to reach the company's goals.
What are laws and regulations (legal forces)?
Laws • Legislation enacted by elected officials - tied to politics. Regulations • Rules made under authority delegated by legislation. [Therefore tend to deal with more minor or more specific issues than legislation] • Laws and regulations govern what marketing organisations can and cannot legally do. [Dictate what obligations they have to consumers, partners, suppliers, government authorities and society as a whole]
How can marketers do better than their competitors?
Marketers must ensure their offerings provide their target market with greater value than their competitors' offerings. • Marketers often think in terms of brand marketing - better to think more broadly, eg • New entrants • Substitute technology • Suppliers • Customers
What is situational analysis?
Situation analysis involves assessing the current situation in order to clearly state where the company is now. Together with organisational objectives, situation analysis is used as the platform for marketing planning,
What is the Macro environment?
The macro environment encompasses the factors outside of the industry that influence the survival of the organisation. In practice, the macro environment can be at any geographic level including local, state, country or regional
What is product competition?
Some products are broadly similar, but have different benefits, features and prices that distinguish them from competing products.
What is Brand Competition?
Some products are very similar, offering the same benefits, features and price to the same target market.
What are demographic forces?
Statistics about a population: age, gender, race, ethnicity, educational attainment, marital status, parental status and so on • The natural environment is an example of sociocultural theme that has emerged recently.
What is the external environment?
The external environment encompasses the people and processes that the organisation cannot directly control. Marketers can only seek to influence the external environment. They do, however, lobby governments to introduce legal penalties for doing so, and they include warnings about piracy on DVD and Blu-ray packaging, and on the films themselves.
What does the macro environment refer to?
The macro environment comprises the larger-scale societal forces that influence not only the industry in which the marketer operates, but all industries. Macro-environmental factors include political forces, economic forces, sociocultural forces, technological forces, environmental forces and legal forces.
What is Monopoly?
There is only one supplier and there are substantial, potentially insurmountable, barriers to new entrants.
What does the micro environment refer to?
micro environment comprises the forces and factors at play inside the industry in which the marketer operates. Micro-environmental factors affect all parties in the industry, including suppliers, distributors, customers and competitors.
What are external vendors?
outsource functions and roles who can do a job more efficiently by specialist external providers. reduces the level of control.
What does PESTEL stand for?
political, economic, sociocultural, technological, environmental, legal
What does senior management do?
responsible for making decisions about the overall objectives and strategy of the organisation.
What does the internal environment refer to?
the parts of the organisation, the people and the processes used to create, communicate, deliver and exchange offerings that have value. The internal environment is directly controllable by the organisation.
What are function departments?
where organisations are structured around specific functions and/or regions. If you are a business student you will study many of these functions during your degree.
What are environmental forces?
• Natural disasters, weather and climate change. • Growing ecological awareness and social changes influence how firms will operate.
What are technological forces?
• Technology allows a better way of doing things. • Technology changes the expectations and behaviours of customers and clients and can have huge effects on how suppliers work.
What sociocultural forces affect marketing?
• The social and cultural factors that affect people's attitudes, beliefs, behaviours, preferences, customs and lifestyles.
What are examples of partners?
• logistics firms — storage and transport • financiers — banking, loans, insurance, and electronic payment infrastructure • advertising /promotion /salesforce agencies • Retailers • Wholesalers - storage and distribution • Suppliers
What should marketers know about their customers?
• understand what their customers value now • identify changes in customer preferences • be willing and able to respond to changes • anticipate how needs and wants might change • be able to influence customer preferences.
