Marketing environment:micro and macro

Question 1

What is the marketing environment?

Answer 1

The actors and forces that affect a company’s capability to operate effectively in providing products and services to its customers.

Question 2

What is a market-orientated firm?

Answer 2

Market-orientated firm looks outwards to the environment in which it operates, adapting to take advantage of emerging opportunities and to minimize potential threats.

Question 3

What ways can you look at the environment?

Answer 3

. Resource-based view
. Industry-based view
. Institutional view

Question 4

What general categories does the marketing environment look at?

Answer 4

. Market dynamism: changings needs of customers+how frims can adapt
.Economic environment: financial situations(business cycle) and how it affects consumer confidence
Tech turbulence: extent of tech changing production and selling tech
Competitive intensity:

Question 5

What are the 3 rings of the marketing environment?

Answer 5

Company-high control
Micro- Medium control
Macro-less control

Question 6

What is the macro-environment?

Answer 6

The broad forces that affect not only the company but

also the other actors in the microenvironment.

Question 7

What are the elements of the macro-environment?

Answer 7

of the five forces – political/legal, economic,
ecological/physical, social/cultural and technological – is
known as pestel analysis

Question 8

What is the microenvironment?

Answer 8

The actors in the company’s immediate environment
that affects its capability to operate effectively in its
chosen markets.

Question 9

What makes up the microenvironment?

Answer 9

. Suppliers
. customers
. competitors
. distributors

Question 10

What are the key benefits of scanning the environment?

Answer 10

. Better awareness of, and responsiveness to environmental changes.
. Better strategic planning and decision-making.
. Improved resource allocation and diversification decisions.
. Better strategic fit between strategy, organisation and the environment.

Question 11

How can Political and legal forces influence marketing decisions?

Answer 11

Political and legal forces can influence marketing decisions by setting the rules by which business is conducted

Question 12

Examples of political and legal forces affecting sports firms?

Answer 12

. Ideology of gov: level of funding e.g.under new labour, allowed free number of swimming lessons for children
. Sports law restricts clubs to certain rules e.g. FFP and EU laws e.g. of workers rights

Question 13

How can economic forces influence marketing decisions?

Answer 13

The economic environment can have a critical impact on the success of companies through its effect on supply and demand e.g interest and exchange rates and the eurozone

Question 14

Example of economic forces affecting sports firms?

Answer 14

. General effects of business cycle on S+D e.g Leisure centre reducing number of centres in recession
. Tax- Chinese league clubs face 100% on foreign signings+minimum of 3 in a team
. Trade:FFP
. Inflation and exchange rates: value of pound affecting prem clubs

Question 15

How can socio-cultural factors influence marketing decisions?

Answer 15

Three key social/cultural forces that have implications for marketing are: 1) the changes in the demographic profile of the population, 2) cultural differences within and between nations, and 3) the influence of consumerism
. Income
. Safety and security

Question 16

Example of socio-cultural factors affecting sports firms?

Answer 16

. Change in consumer tastes: Leyton Orient lost traditional supporters as East London demographic changed-had to adjust to get new supporters
.Increase popularity in football from women- seating+women team funding
. Cultural differences: Athletic Bilbao only have Basque players

Question 17

How can technological forces influence marketing decisions?

Answer 17

Technological change can provide opportunities for new product development, create new markets, change marketing practices and communications, and revolutionize society. e.g R and D, communications and society

Question 18

Example of technological factors affecting sport firms?

Answer 18

. Improved stadia-attracts wider variety of fans, Tottenham-fans stay longer
. Offficial innovations- TMO+hawkeye have benefitted game and added extra element
VAR may deter some fans- not 100% accurate
Social media- PL clubs have pages on all platforms to access fans
Globalisation- use of accounts for different countries accesses new fans

Question 19

How can ecological/environmental forces influence marketing decisions?

Answer 19

Ecology in a marketing context is concerned with the relationship between people and the physical environment.

Question 20

Example of ecological/environmental/ethical factors affecting sport firms?

Answer 20

. Green marketing- Forest Green rovers(vegan)
.CSR- clubs promote litter-free stadia
-Nike changed image of sweat shops

Question 21

Explain the customer element of the microenvironment

Answer 21

. Marketing managers must satisfy their needs and expectations better than the competition.
. why consumer behaviour is important

Question 22

Explain the competitor element of the microenvironment

Answer 22

Market-orientated companies not only monitor and seek to understand customers but also research competitors and their brands to understand their strengths, weaknesses, strategies and response patterns

Question 23

Explain the distributor element of the microenvironment

Answer 23

. some companies don’t use distributors +sell directly to consumers
. others use them such as retailers to supply customers their products
. Distributors can reduce the profitability of suppliers by putting pressure on profit margins e.g big retailers such as tesco put pressure on small brands for products

Question 24

Explain the supplier element of the microenvironment

Answer 24

. Increases in supply costs can push up prices, making other alternatives more attractive
. need to be sensitive to alternative input materials that can be substituted for those of existing suppliers if the latter’s prices rise or availability diminishes significantly

Question 25

What is the aim of Porter’s 5 forces?

Answer 25

. Framework for analysis of competition

. sustainable competitor advantage requires management of these 5 forces

Question 26

What are Porter’s 5 forces?

Answer 26

1. Threat of new entrants
2. Bargaining Power of suppliers
3. Bargaining power of buyers
4. Threat of substitutes
5. Rivalry among existing firms

Question 27

Explain the threat of new entrants with a sporting example

Answer 27

Measures how easily other firms can enter the marker
. Barriers to entry
. e.g. football league requires clubs need to register with FA and pass tests to be part of the league
. threat of new entry into premier league top 4 is higher in Prem than other league- looking at possibility of Super league

Question 28

Explain the bargaining power of suppliers with a sporting example

Answer 28

. elasticity of supply
. FIFA have high bargaining power over clubsas they are the only football IF
. Clubs have high bargaining power to most fans who are devoted to club and will pay any price to watch

Question 29

Explain bargaining power of buyers with a sporting example

Answer 29

. elasticity of demand

. fans have less bargaining power over clubs as ticket revenue is less important to clubs

Question 30

Explain the threat of substitutes with a sporting example

Answer 30

. cross price elasticity
. how easily consumers could swap one product for another
. e.g. less from club to club perspective or ruby union vs league
. more so with retailers e.g Nike vs adidas

Question 31

Explain the rivalry amongst existing firms with a sporting example

Answer 31

. sum of all porters 5 forces in essense
. level of competiton
. higher level of competition in PL than La liga

Question 32

What is a SWAT analysis used for?

Answer 32

Used as part of a situational analysis of a firm after scanning marketing environment

Question 33

What is a sporting example of strengths?

Answer 33

Man city have developed good style of play under Pep

Question 34

What is a sporting example of Weaknesses ?

Answer 34

Tottenham chairmen identified a weakness of a small stadium holding Spurs back financially

Question 35

What is a sporting example of Opportunities?

Answer 35

Good style of play allows Man city to attract fans to watch their games from all over the world

Question 36

What is a sporting example of Threats?

Answer 36

Tottenham had the threat of being left behind in the league as other teams invested in stadia and developed financially. add figures??

Question 37

What is the link between market orientation and the marketing environment according to Slater and Narver (1994)?

Answer 37

. Monitoring and evaluating the environment strengthens a firm’s market orientation e.g. competitor and customer orientations
. Manager shouldn’t mould market orientation to current environmental conditions as it is dynamic but instead should be adaptable to any conditions
. Market orientation and environmental analysis/effectiveness both help each other