chapter 3- marketing environment Flashcards
3 aspects of the marketing environment
internal environment
macro environment
micro environment
PESTEL
used to assess the impact in the macro environment Political Economic social technological environmental legal uncontrollable factors understand opportunities and threats that they pose for the business
Micro environment
external of organisation effects ability to serve customers
can be controlled to a certain degree
tends to be harder to influence that micro environment
aspects of the business entity
suppliers distributers customers employees competitors shareholders
customers (Micro)
provide only source of revenue
preferences can change quickly
require value for money
ability to share views- word of mouth/internet
Competitors (Micro)
marketers must gain a strategic advantage by positioning their offering strongly against the competition
Indirect competition - provide alternative products/services
Direct competition- similar in form to product/service
Suppliers (Micro)
organisations are nothing without their suppliers
monitor supply/availability and other issues that could cost in sales and customer satisfaction
Internal environment
everything happening within the org and which impacts the value and service that the customer needs
org has control and can influence and change factors
they need to adapt to changes taking place within the micro and macro environment
the 5 Ms
Men - skills of workers money -financial resources machines -equipment to deliver products materiels - physical factors required to deliver the service minutes - time available
Reasons for monitoring the marketing environment
org do not operate in a vacuum ME changing constantly need to be aware of the changes change in customer needs need to know if they are internally able to cope with the external environmental changes
Ways to analyse the marketing environment
SWOT
PESTEL- identifies the opportunities and threats in the wider environment
5Ms- identifies the strengths and weaknesses of the org
Reactive Management
regards environmental forces as uncontrollable, adjust marketing plans to fit environmental changes
Proactive Management
looks for ways to change the organisations environment
belief that environmental factors can be controlled or influenced
Five forces model
competitor analysis
1) bargaining power of suppliers - greater this is, stronger competitive pressures
2) bargaining power of customers- ^
3) threat of new entrants- depends how easy it is to enter market
4) threat of substitute products + service
5) rivalry among current competitors
competitive structures- Perfect competition
products virtually identical
entry to market is easy, has full knowledge on what others are doing
Competitive structures- Monopolistic competition
One major supplier has obtained a large share of the market eg. Coca Cola
competitive structures- Oligopoly
a few companies control the market
often investigates by government monopoly regulators who exist to ensure that large firms do not abuse their power
eg. commercial aircraft manufacturers
competitive structures- monopoly
single firm has a product with no close substitution
almost as rare as perfect competition
‘natural monopolies’- electricity supply grids
International environment
cultural differences mean communications will need to be adapted/changed
market segmentation issues are likely to be more geographically based
International marketing is important because of comparative advantage
Comparative advantage
each country has natural advantages over others in the production of certain goods
world trade initiatives
most gov encourage firms to market internationally as it brings in foreign exchange enables countries to buy in essential imports to support the national economy
prefer to restrict importing in order to keep a balance of payments
having more foreign currency coming in that out allows the gov to keep interest rates down and inflation
ethnocentrism
tendency to believe that ones own culture is the ‘right’ one and everyone else is a poor imitation
makes it difficult for markets as they tend to judge other cultures based on their own (Self- referencing)
cultural differences are reducing due to younger consumers being more globally minded
Countertrading
exporting good on the condition the firm will import an equal value of other goods from the same market
