1. Marketing Dynamics + Environment Flashcards
Definition of Marketing
Marketing is a management process
- planning, analysis, control, resource allocation, investment
Marketing is about understanding and giving customers what they want
Marketing is an exchange process
- (Alderson, 1957)
- exchange of a product/ service/idea for money
Marketing as a management process
Market Research
- Identify needs/ wants/ target market
Marketing Mix
- Market product in a way that satisfies needs
Strategic Vision
- Portray the good as a ‘solution’, not product
- Dynamic approach to changing markets
- Differentiation
- Competitive Edge
Marketing Environment
Four spheres of influence determine the marketing environment:
Sociocultural
Technological
Economic
Political
Organisations ensure that these factors are taken into consideration in their marketing mix through environmental scanning
Environmental Scanning
The collection and evaluation of information from the wider marketing environment that might affect the organisation’s strategic marketing activities
Difficult but important task
e.g. volvo failed to pick up on the emerence of the market for ‘people carriers’ so missed growth potential
Environment: Sociocultural
Demographics
- measurable aspects of population
- e.g. race, age, sex
- e.g. grey market is over 55s. Market is growing due to ageing population
Ethics
- Business ethics e.g. fair trade
- Environmental ethics e.g. FSC
Trends
- e.g. Health trends
- fashons
Environment: Technological
- Materials, componants e.g. microchip
- Production methods e.g. CAD/CAM
- Marketing communication e.g. Social media
Environment: Macroeconomic
Taxation
- Direct (income tax) reduce disposible income
- Indirect (VAT, duties) increase price of goods
Interest rates
- Incentive to save/ spend
Trading Blocs
- e.g. Eu and SEM removes barriers
Trade agreements
- e.g. GATT aims to get rid of tariffs
Environment: Microeconomic
Determine how a firm behaves in relation to other firms in the industry
Oligopoly
- Interdependent
- Economies of scale
- High barriers to entry
- P&G and Unilever
- New entrants have to segment market in different way
- e.g. Ecover is environmentally friendly cleaning products
Monopolistic Competiton
- Smaller firms
- Differentiation through marketing
Environmental: Political
Regulatory Bodies
- OFT
- Accountable to government
QUANGOS
- Ofwat, Oftel
ASA
- Oversees British Code of Advertising, sales promotion and direct marketing
- CAP code
- Not statutory, cannot enforce
Q: Explain briefly who and what the ASA is, and what if any useful purpose it serves (8 marks)
(2010)
Advertising Standards Authority
- Ensures organisations adhere to British code of Advertising, Sales promotion and direct marketing (CAP)
- Not statutory, can only recommend that organisation changes/removes advertisment
- Can only request compliance
Example:
- ASA has recently recieved complaints about adverts for the new Apple iPad 3
- The adverts suggest that the iPad has the 4G function however this is not available ouside the US and Canada
- Complaints have been recieved from the UK
- The ASA is investigating
Q: Describe four microeconomic factors of the market that should be fully analysyed prior to formulation of marketing strategy
(2010)
Level of competition in the market i.e. the number of firms competitng for the same target market
- This determines the market structure and helps to predict how other firms will behave
How much market share does the competitiors have?
- This may be a barrier to entry for a new entrant
- Or may help an existing firm plan their expanision or move to another segment
- In an oligopoly, the competeing firm is likely to have a similar size market share e.g. P&G and Unilever
How will the firm differentiate its product?
- In markets such as monopolistic competition, firms differentiate their products
- This is a form of non-price competiton
- A firm must know how other competitiors are differentiating their product to ensure that theirs is sufficiently different in order to make profit.
