MKF1120 Week 3 - Marketing Environment

Microenvironment Definition

"All those other organisations and individuals that directly or indirectly affect the activites of the organisation"

Internal Environment Definition

"Components such as employees, tools, and communication methods which affect corporate culture"

Marketing Environment Definition

"Conditions and influences impinging or potentially impinging on marketing" "Individual organisations and forces external to the marketing management function of an organisation that impinge on the marketing management's ability to develop and maintain successful exchanges with customers"

Macroenvironment Definition

"The larger, wider forces that have influence over companies and economies" "External forces that impact both the organisation and everyone involved" - Me

Environmental Scanning

- A company's ability to ACT rather than REACT to opportunities and threats - Monitoring and responding to change

Competitors

- Alternative provider of the offer sought by the market - Direct: similar product - Indirect: similar need, but different product E.g: Coca Cola Direct competitors: Pepsi Indirect competitors: Sprite, Fanta, coffee Indirect +1: any general beverage Indirect +2: food and entertainment services

Customers

- Can be actual or potential - B2C (Business to Consumer) groupings - B2B (Business to Business) groupings

Trend Analysis

- Describes the current situation - Analyses previous trends - Forecasts future trends - Acknowledges strengths and weaknesses for the organisation - Discusses opportunities and threats (implications) to the organisation

Economic Environment

- Factors that affect consumer buying power and spending patterns E.g: - Inflation - Interest rates - Employment levels - Income

Intermediaries

- Help an organisation to promote, sell, and distribute goods to the final buyers - They are also a customer of the product E.g: - resellers/retailers - physical distribution firms - marketing services agencies

Political/Legal Environment

- Laws, government agencies, and pressure groups -Influence and limit various organisations and individuals E.g: new legislation - regulation of sugar due to its harmful toxins

Community

- Local non-government organisations - Can mobilise public opinion for or against a firm

Stakeholders

- Other customers - Competitors - Intermediaries - Suppliers - Value chains - Community - Shareholders - Government - Pressure groups

Social (Cultural) Environment

- People's cultural upbringing is what they define as normal - Affects basic values, perceptions, preferences, and behaviours of a person

Suppliers

- Provide inputs to the business (raw materials, resources, etc) - Increased collaboration = competitive advantage - Close relationship required

Technological

Affect new technologies Create new products and market opportunities - New product development - New manufacturing possibilities - New ways to communicate with customers - New ways to distribute goods and services

Components of Marketing Environment

Internal environment: - Within the organisation - E.g: employees, finance, equipment Microenvironment: - Closely linked to the organisation - E.g: competitors, customers, suppliers Macroenvironment: - Distant from the organisation - E.g: economic forces, political/legal forces, technological forces

Value Chains

Many suppliers connected in a chain

Trends and Forces of the Macroenvironment

PESTN: Political/legal Economic Social (demographic and cultural) Technological Natural

Natural

Resources that are needed or affected by marketing - Shortages of raw materials - Increased cost of energy - Increased pollution - Government intervention for management

Employees

Source of company's success: - Build customer commitment - Increase customer willingness to pay - Improve levels of customer satisfaction Job satisfaction linked to customer satisfaction Successful employee relations = competitive advantage

SWOT Analysis

Strengths/Weaknesses: Internal (competitors) Opportunities/Threats: External (macroenvironment)

Social (Demographic) Environment

Study of humans: - Size, age, location, race, sex, occupation, etc Look for trends in population as they are always changing - geographic shift in population - increased ethnic diversity - better education population