1.1 Understand marketplace - Markets

Question 1

Importance of market analysis

Answer 1

• To develop and implement effective marketing strategies, you must understand the environmental context in which marketing operates
• Companies today have to be alert and responsive to the interests and concerns of various actors in the market
• All marketing activities should be based on a thorough analysis of the market and the initial strategic situation
• The key objectives of such an analysis are the identification of
• facts, conditions and changes that have an impact on marketing
• strategic opportunities and threats

Question 2

Types of good sold

Answer 2

• Consumer goods
• Business-to-business
goods
• Services

Question 3

Degree of internationality

Answer 3

• Local markets
• Regional markets
• International markets
• Global markets

Question 4

Market structure

Answer 4

• Monopolistic market
• Oligopolistic market
• Atomistic market

Question 5

Direction of transaction

Answer 5

• Buying market

* Sales market

Question 6

Distribution of power

Answer 6

• Buyers’ market

* Seller’s market

Question 7

Transaction type

Answer 7

• Bricks-and-mortar market

* Electronic market

Question 8

Access to the market

Answer 8

• Open market
• Closed/protectionist
market

Question 9

Rules of the market

Answer 9

• Free market

* Regulated market

Question 10

Actors/ Stakeholders

Answer 10

- Customers (• Buyers/ customers
• Potential customers
• Endcustomers
• Organizational
customers
• Publicinstitutions)

• Competitors(• Competitors • Potential
  competitors • Substitutes)
• Marketing intermediaries (• Intermediaries • Brokers
  • Retailer
  • Resellers)
• Publics (• Government publics
  • Generalpublics • Financialpublics • Mediapublics)
• Suppliers (• Designers
  • Producers
  • Subcontractors)

Question 11

Companies

Answer 11

Description:
Definition of market based on groups of companies, industries, or economic sector
Example: “Chemical market”

Question 12

Prodcuts

Answer 12

Description:
Definition of market based on certain product lines
Example:
“Market for long- distance travel”

Question 13

Buyers

Answer 13

Description:
Definition of market based on certain buyer or groups of buyers
Example:
“Market for price- sensitive students”

Question 14

Needs

Answer 14

Description:
Definition of market based on certain needs or need categories
Example:
“Market for entertainment”

Question 15

Market volume

Answer 15

The total amount of realized transactions (units or values) observed in a specific marketplace over a specified time frame.

Question 16

Market potential

Answer 16

It defines the upper limit of the total demand and takes potential clients into consideration.

Question 17

Market saturation

Answer 17

Relation between realized and total potential of a market (formula: market volume/market potential*100)

Question 18

Market growth

Answer 18

Change of market volume in a specific period of time (in terms of units or values)

Question 19

Key indicator for competitiveness of a company

Answer 19

• Development of market shares indicates changes in consumer preferences
• Ongoing losses in market share -> evaluation of marketing objectives, strategy and marketing mix

Question 20

Summary

Answer 20

To develop and implement effective marketing strategies, you must understand the environmental context in which marketing operates
• Whereas the microenvironment includes all actors close to the company that affect its ability to create value for customers, the macroenvironment consists of lager societal forces that affect the microenvironment
• The analysis of the microenvironment contains the type of market, actors, relevant market and quantitative analysis – all of them aim to identify implications for your marketing strategy
• A different definition of the company’s relevant market changes the whole perspective on the market (e.g. the 3 C’s, market growth) – the definition should be based on buyers and their needs
• Quantitative market analysis should be conducted by analyzing various metrics
• The PESTLE-analysis with structured checklists is one tool to analyze the
macroenvironment