Marketing environment:micro and macro Flashcards
What is the marketing environment?
The actors and forces that affect a company’s capability to operate effectively in providing products and services to its customers.
What is a market-orientated firm?
Market-orientated firm looks outwards to the environment in which it operates, adapting to take advantage of emerging opportunities and to minimize potential threats.
What ways can you look at the environment?
. Resource-based view
. Industry-based view
. Institutional view
What general categories does the marketing environment look at?
. 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:
What are the 3 rings of the marketing environment?
Company-high control
Micro- Medium control
Macro-less control
What is the macro-environment?
The broad forces that affect not only the company but
also the other actors in the microenvironment.
What are the elements of the macro-environment?
of the five forces – political/legal, economic,
ecological/physical, social/cultural and technological – is
known as pestel analysis
What is the microenvironment?
The actors in the company’s immediate environment
that affects its capability to operate effectively in its
chosen markets.
What makes up the microenvironment?
. Suppliers
. customers
. competitors
. distributors
What are the key benefits of scanning the environment?
. 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.
How can Political and legal forces influence marketing decisions?
Political and legal forces can influence marketing decisions by setting the rules by which business is conducted
Examples of political and legal forces affecting sports firms?
. 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
How can economic forces influence marketing decisions?
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
Example of economic forces affecting sports firms?
. 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
How can socio-cultural factors influence marketing decisions?
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
Example of socio-cultural factors affecting sports firms?
. 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
How can technological forces influence marketing decisions?
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
Example of technological factors affecting sport firms?
. 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
How can ecological/environmental forces influence marketing decisions?
Ecology in a marketing context is concerned with the relationship between people and the physical environment.
Example of ecological/environmental/ethical factors affecting sport firms?
. Green marketing- Forest Green rovers(vegan)
.CSR- clubs promote litter-free stadia
-Nike changed image of sweat shops
Explain the customer element of the microenvironment
. Marketing managers must satisfy their needs and expectations better than the competition.
. why consumer behaviour is important
Explain the competitor element of the microenvironment
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
Explain the distributor element of the microenvironment
. 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
Explain the supplier element of the microenvironment
. 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
What is the aim of Porter’s 5 forces?
. Framework for analysis of competition
. sustainable competitor advantage requires management of these 5 forces
What are Porter’s 5 forces?
- Threat of new entrants
- Bargaining Power of suppliers
- Bargaining power of buyers
- Threat of substitutes
- Rivalry among existing firms
Explain the threat of new entrants with a sporting example
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
Explain the bargaining power of suppliers with a sporting example
. 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
Explain bargaining power of buyers with a sporting example
. elasticity of demand
. fans have less bargaining power over clubs as ticket revenue is less important to clubs
Explain the threat of substitutes with a sporting example
. 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
Explain the rivalry amongst existing firms with a sporting example
. sum of all porters 5 forces in essense
. level of competiton
. higher level of competition in PL than La liga
What is a SWAT analysis used for?
Used as part of a situational analysis of a firm after scanning marketing environment
What is a sporting example of strengths?
Man city have developed good style of play under Pep
What is a sporting example of Weaknesses ?
Tottenham chairmen identified a weakness of a small stadium holding Spurs back financially
What is a sporting example of Opportunities?
Good style of play allows Man city to attract fans to watch their games from all over the world
What is a sporting example of Threats?
Tottenham had the threat of being left behind in the league as other teams invested in stadia and developed financially. add figures??
What is the link between market orientation and the marketing environment according to Slater and Narver (1994)?
. 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
