chapter 3- marketing environment

Question 1

3 aspects of the marketing environment

Answer 1

internal environment
macro environment
micro environment

Question 2

PESTEL

Answer 2

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

Question 3

Micro environment

Answer 3

external of organisation effects ability to serve customers
can be controlled to a certain degree
tends to be harder to influence that micro environment

Question 4

aspects of the business entity

Answer 4

suppliers 
distributers
customers
employees 
competitors
shareholders

Question 5

customers (Micro)

Answer 5

provide only source of revenue
preferences can change quickly
require value for money
ability to share views- word of mouth/internet

Question 6

Competitors (Micro)

Answer 6

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

Question 7

Suppliers (Micro)

Answer 7

organisations are nothing without their suppliers

monitor supply/availability and other issues that could cost in sales and customer satisfaction

Question 8

Internal environment

Answer 8

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

Question 9

the 5 Ms

Answer 9

Men - skills of workers
money -financial resources
machines -equipment to deliver products 
materiels - physical factors required to deliver the service 
minutes - time available

Question 10

Reasons for monitoring the marketing environment

Answer 10

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

Question 11

Ways to analyse the marketing environment

Answer 11

SWOT
PESTEL- identifies the opportunities and threats in the wider environment
5Ms- identifies the strengths and weaknesses of the org

Question 12

Reactive Management

Answer 12

regards environmental forces as uncontrollable, adjust marketing plans to fit environmental changes

Question 13

Proactive Management

Answer 13

looks for ways to change the organisations environment

belief that environmental factors can be controlled or influenced

Question 14

Five forces model

Answer 14

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

Question 15

competitive structures- Perfect competition

Answer 15

products virtually identical

entry to market is easy, has full knowledge on what others are doing

Question 16

Competitive structures- Monopolistic competition

Answer 16

One major supplier has obtained a large share of the market eg. Coca Cola

Question 17

competitive structures- Oligopoly

Answer 17

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

Question 18

competitive structures- monopoly

Answer 18

single firm has a product with no close substitution
almost as rare as perfect competition
‘natural monopolies’- electricity supply grids

Question 19

International environment

Answer 19

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

Question 20

Comparative advantage

Answer 20

each country has natural advantages over others in the production of certain goods

Question 21

world trade initiatives

Answer 21

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

Question 22

ethnocentrism

Answer 22

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

Question 23

Countertrading

Answer 23

exporting good on the condition the firm will import an equal value of other goods from the same market