Chapter 3 Detail Flashcards
Environmental scanning
Acquiring information about events, trends, and relationships in an organization’s operating environment that marketers use to plan the organization’s future course of action.
Benefits of environmental scanning
Helps organization to deal with ever-changing environment and provide early signals to potential problems.
Sensitises organisation to ever-changing needs of customers.
Improves the image of the company - demostrates concern, sensitivity, and responsiveness.
Provides base for qualitative information about the environment.
Market threat
Factors that can inhibit you from achieving your market opportunities.
Options
Possible solutions for a problem. Have not yet been subjected to the screening criteria that will result in “the ultimate choice, finished product, or option chosen”.
Not all options represent opportunities.
Catalyst
A change in an organization’s environment that may lead to the organization reassessing its goals, strategies and options for reaching those goals. Without a catalyst, an opportunity may never be realised, but they are separate entities.
Market opportunity
A confluence of circumstances leading to the choice or rejections of options.
Gap in the marketplace where a need is not being satisfied sufficiently, representing a chance to design a product, service, or idea to bridge the gap and match expectation in the marketplace. Strategic marketers’ responsibility is to identify and pursue these gaps that emerge with time (change in trends).
Macro environmental analysis: 1. Prioritize macro trend categories
Understand which macro trend categories are relevant – linked to the various macro environmental factors that will have the most impact on organisation
Macro environmental analysis: 2. Identify and monitor information about macro trends
STEEPLE
Macro environmental analysis: 3. Adopt appropriate strategies
Marketers should constantly anticipate the impact of environmental trends and adopt strategies accordingly.
Strategic group analysis
Strategic marketing tool.
Strategic diversity and complexity of an industry can be simplified by classifying companies into different competitive groups.
Strategic group
Consists of companies that employ a similar mix of strategy elements.
Porter’s 5 Forces: Bargaining power of suppliers
High if there are only a few dominant suppliers or if an organisation relies on very few suppliers. Could lead to higher input cost.
Porter’s 5 Forces: Bargaining power of buyers
High if it is easy for buyers to shop around and find the same offerings as your organisation’s at a lower price/of better quality.
Thus, they have more economic power and this could lead them influencing and changing the prices or features to suit their preferences of a product.
Porter’s 5 Forces: Threat of new entrants
High if there are low barriers to entries. Thus, it is easy to enter the industry.
The possibility that new companies may enter industry and increase competition will reduce the industry’s attractiveness.
Present competitors can raise entry barriers.
Porter’s 5 Forces: Threat of new substitutes
High if it is easy for buyers to find (cheaper and/or better quality) alternatives that meet their needs the same way your products meet the needs.
Customers can easily switch if products or services are undifferentiated.
