Lecture 6: Marketing: Marketing and digitised consumer relations

Question 1

PEEST

Answer 1

Describes an analysis of the company’s environment covering these five forces:

Political/legal: laws, government agencies, pressure groups that influence and limit organizations and individuals

Economic: purchasing power, including income distribution, prices, savings, debt and credit availability

Ecological/physical: sustainability trends and laws to reduce pollution, which affect companies but also affect consumers in buying products

Social/cultural and demographic: population trends, both growth rates but also marriage trends, globalisation trends of people moving, education levels. Also views of themselves, views of others, views of society, subscultures.

Technological: four trends affecting companies: the accelerating pace of change, unlimited opportunities for innovation, R&D budgets and increased regulation of technological change

Question 2

Fads, trends and megatrends

Answer 2

Fad: unpredictable, short lived and without social, economic and political significance. E.g. Tamagotchi, Pokemon, Polly Pocket

Trend: a direction of sequence of events that has some momentum and durability, therefore more predictable than fads. E.g. there’s a trend of people valueing physical fitness and well-being especially amongst women under 30, upscale consumers and people in the western world

Megatrends: large social, economic, political and technological changes that are slow to form and once in place, influence us for some time. E.g. sustainability, is a long-run competitive factor

Question 3

Forces in the company environment (deterministic, moderating, asymmetric and indeterministic forces)

Answer 3

Deterministic forces: direct and determining influence on the company as they have no choice but to adapt to these forces, e.g. taxes, exchange rates, global crises

Moderating forces: often lead to a set of “known” consequences for a company, but they do not necessarily have to adapt to changes - e.g. fashion, as fashion companies do not Have to adapt to market changes in fashion, but most choose to do so

Asymmetric forces: lead to a set of “unknown” consequences for a company. E.g. political decisions, where the consequences are debated but still unknown

Interdeterministic forces: have small or negligible consequences for the company, e.g. changes in fashion have no consequences for a steel production company, but the interdeterministic forces can still change into one of the other ones, why companies still need to watch them

Question 4

Corporate environmentalism

Answer 4

Recognition of the importance of environmental issues facing the firm and the integration of those issues into the firm’s strategic plans

Four major trends in the natural environment:
Shortage of raw materials: finite non-renewable resources such as oil, coal, silver, pose a threat to firms who make products using increasingly scarce materials as they face increased costs
Increased cost of energy: because of the increasing price of oil, companies and governments are searching for alternative energy sources
Increased pollution levels: new market for pollution control solutions and alternative ways to produce and package goods
Changing role of governments: governments vary in their efforts to promote a clean environment, as less developed nations do little about pollution whereas the richer nations move towards decreasing pollution

Question 5

Environmental auditoring

Answer 5

Evaluates the environmental performance of companies