Marketing environment

Question 1

What is marketing?

Answer 1

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and the society at large.

“The management process responsible for identifying, anticipating and satisfying customer requirements profitability (The CIM, 1976).

Question 2

What are the 3 main marketing envrionments?

Answer 2

• Macro
• Micro
• Internal

Question 3

What is the macro environment?

Answer 3

• The broad environmental factors that are external to an organisation’s market and industry, such as legal regulations, changes in technology or economies → link to PESTLE.
• These factors are outside the organisation’s control.
• These macro environment factors can be broken down into a number of different elements: political, economic, social/cultural, technological, environmental and legal/regulatory. → PESTLE
• Each organisation will be affected by these elements differently. Marketers must think of each element in the context of their own organisation they are analysing.

Question 4

What does PESTLE stand for?

Answer 4

Political, economic, social, technological, legal and environmental.

Question 5

What is the political component?

Answer 5

They include but are not limited to government policies at a domestic level, government finances and contracts, regulations or deregulations of industries and wider policies and actions that impact trade.

Question 6

What is the economic component?

Answer 6

The economic environment can have a critical impact on the success of organisations through the effect on supply and demand. E.g during periods of boom, well managed organisations experience an expansion in the demand of their products, whole periods of recessions may bring a decline in sales as consumers become wary of discretionary expenditure.

Question 7

What is the social component?

Answer 7

• Factors such as religion and beliefs, lifestyles, levels of education, change in populations, the social attitudes of different groups and the changing cultural norms of a society, e.g car ownership among young people in developed countries is declining due to high insurance premiums.
• Demographic - study of human population in terms of size, location, age, gender, race and occupation.

Question 8

What is the technological component?

Answer 8

• Factors include but are not limited to development of new technology, technical improvements, and the pace of technological change.
• Widely acknowledge drivers or change in the macro environment.
• Mobile technology, smart products and a range of other developments are already having an impact on many industries and sectors.
• Change of marketing due to online marketing, mobile and social media technology - change in customer technology usage therefore marketing have had to adapt and change too.
• May already use RFID to track products and consumers.
• The role of technology in product development in production, administration, distribution, customer research and support.

Question 9

What is the legal component?

Answer 9

• Closely related to political factors.
• Government policies are generally implemented through legislation passed by a country’s parliament.
• Legal factors can also arise from decisions in the courts of law as well as from regulations which can be industry specific.

Question 10

What is the environmental component?

Answer 10

• Factors in the natural environment e.g earthquakes, climate change and trends in sustainability. Also include factors closely related to marketing such as the use of “green consumerism”, the increase in the use of organic farming methods and regulations around emissions and disposable waste.
• Some people refer to these as “Ecological and Geographic” factor.

Question 11

What is the micro environment?

Answer 11

The microenvironment consists of forces close to the company that affects its ability to service its customers - the company, suppliers, intermediaries, competitors and publics.

These factors are outside the organisation’s control.

Question 12

What are the components of the micro environment?

Answer 12

• Suppliers
• Marketing intermediaries
• Competitors
• Publics
• Customers

Question 13

In design marketing plans, marketing management takes company groups into account…

Answer 13

Top management
Finance
R&D
Purchasing
Operations
Accounting

Question 14

What are suppliers?

What are intermediaries?

Answer 14

• Provide the resources to produce goods and services. Treat as partners to provide customer value. Supplier relationship management is the process of planning and managing all relationships with vendors that supply any products or services to business. This may involve raw material suppliers, utility or cleaning service suppliers.
• Marketing intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers. Treat as partners to provide customer value.

Question 15

What are competitors?

What are the public?

Answer 15

• Firms must gain strategic advantage by positioning their offerings strong against competitors offering in the minds of consumers. Offer better products and services. Understand the customers/audience. They’re important as it drives improvement, Competition in business forces you out of your comfort zone and also lowers their cost as they run efficiencly.
• Any group that has an actual or potential interest in or impact on an organisation’s ability to achieve its objectives. E.g Financial publics, Media publics, Government publics, Citizen action publics.

Question 16

What are the customers?

Answer 16

Customers are key to business survival and growth. A flood of negative press was triggered when protein world put up posters on the London underground that objectified and body shamed women.

Question 17

How does the marketing mix influence the microenvironment?

Answer 17

• Products are more than just the actual item. It’s the design, quality, features, options, packaging and more. It ignites customers’ five senses and creates a desire to purchase in the first place. The challenge is to create the right bundle of benefits that meet customer needs.
• Before setting prices, we need to research information on what customers are willing to pay and gain an understanding of the demands for that product/service in the market. As price is also a strong indication of the positioning in the market against competitors prices need to be set with competitors in mind too. Price can make or break a product/service launch. The first principle of pricing keeps in mind the value of the product or service that the customer perceives.

This is the place where customers make a purchase. This might be in a physical store or through an app or website. Some organisations have the physical space or online presence to take their products straight to the customer, whereas others have to work with intermediaries or middlemen with the locations, storage and/or sales expertise to help with this distribution.

• Promotion is about communicating messages to customers to generate awareness, interest, desire and action. Different tools? Advertising is good for raising awareness and reaching new audiences, whereas personal selling is great for building relationships with customers and closing a sale. Communicate to their stakeholders too like shareholders and the wider public to build company reputation.

A company’s people are at the forefront when interacting with customers, taking and processing their enquiries, orders and complaints in person, through online chat. They interact with customers throughout their journey and become the face of the organisation for their customer. Their knowledge of the companies products and services and how to use them, their ability to access relevant information and their everyday approach and attitude needs to be optimised.

Process: Understanding the steps of the customer journey - from making an enquiry online to requesting information and making a purchase.

Physical evidence: Provides tangible cues of the quality of experience that a company is offering. It can be particularly useful when a customer has not bought from the organisation before and needs some reassurance, or is expected to pay for a service before it’s delivered.