Marketing environments

Question 1

What is the macro external environment

Answer 1

factors over which an organisation has little or no
control includes Political, Economic, Social, Technological, Environmental and Regulatory factors.

Question 2

What is the micro external environment

Answer 2

factors over which an organisation may have
some control

Question 3

What is the internal environment?

Answer 3

– factors over which the organisation has more control

Question 4

What is One of the most popular methods of classifying the external environment?

Answer 4

PESTER (or PESTEL)
Political, Economic, Social, Technological, Environmental

Question 5

How can politics effect a marketing environment?

Answer 5

Political issues reflect the way in which government intervenes in or affects the economy at a macro scale. Specific factors tend to reflect tax policy at both corporate and personal levels, policy on employment and the environment, trade tariffs and restrictions (including sanctions). More indirect examples might include governmental approaches to health, education, public infrastructure and defence.

Question 6

How can economics effect a marketing environment?

Answer 6

Economic considerations are one of the most important aspects of the external environment and include spending power, consumer confidence, exchange rates affecting competitiveness in overseas markets, and overall trends that may also affect long term profitability and the climate for investment. Other examples include interest and inflation rates which may have a direct effect on the profitability of an organisation.

Question 7

How can social issues effect a marketing environment?

Answer 7

Social issues can be diverse and represent the various stakeholder groups who see themselves as customers. Taste, fashion and other trends are social issues and will determine demand; other social issues are concerned with health and safety, consumer rights and may also include sustainability and rights issues such as accessibility. Campaign groups can be powerful forces and an awareness of these and the issues they represent is essential.

Question 8

How can technology effect a marketing environment?

Answer 8

Technological advances can create many opportunities for businesses, but it often means changing their marketing mix e.g. to enable them to interact with customers through increasingly popular technologies such as online messaging and digital advertising.

Question 9

How can environmental factors effect a marketing environment

Answer 9

Environmental (or ecological) issues such as responsible farming, labelling, recycling, etc. have led to the announcement of several global policies which dictate the way in which goods can be manufactured and/or distributed. This can have a profound effect on the operations of an organisation, to say nothing of the profitability.

Question 10

How can regulatory factors effect a marketing environment?

Answer 10

Regulatory and legal issues affect many activities from the way in which an organisation operates and advertises to how it distributes its
products). They can also include rules imposed in the interests of fair trade or anti-discrimination. It is very easy to fall foul of recently introduced legislation and ignorance is never an admissible defence.

Question 11

What are Key factors in the external micro environment?

Answer 11

• The Market/ Industry structure and dynamics
• Suppliers
• Distributors (channel members or intermediaries)
• Stakeholders
• Customers
• Competitors

Question 12

What is an external stakeholder?

Answer 12

finance providers, media, regulators, interest groups, government, and journalists

Question 13

What is a connected stakeholder?

Answer 13

distributors, suppliers and shareholders.

Question 14

What are the 7 categories in the Seven Markets Model that helps with stakeholder mapping?

Answer 14

• Customer markets
• Internal markets
• Employee markets
• Shareholders
• Supplier markets
• Influence markets (e.g., the media, analysts)
• Referral markets (e.g. third party referrals)

Question 15

According to Dibb and Simkin, organisations adopt one of 5 different roles when it comes to competition… what are they?

Answer 15

• The market leader enjoys the single largest market share
• The market challenger will aggressively try to capture market share (from the leader)
• Fast movers tend to be small, but with a rapid growth rate, often with an unusual or unique advantage
• Market followers will often challenge for share on the basis of cost and tend to lack any of the commitment to long term research or investment of a leader or fast mover
• Market nichers will focus on a very small segment of the customer base, or product range

Question 16

What is the internal marketing environment?

Answer 16

factors that fall within your control and impact your marketing operations, including your organization’s strengths, weaknesses, uniqueness, and competencies.

Question 17

How would you audit the internal environment?

Answer 17

When auditing the internal environment it is important to include all the key factors that contribute to creating and maintaining a competitive advantage. A good place to start
your internal audit is to identify where your organisation does this. Next comes the more difficult task of asking ‘how’ this advantage has been attained and can be sustained

Question 18

What are the principles for communicating effectively in a crisis?

Answer 18

• Honesty and openness
• Identification with the audience
• Timeliness
• Proactive, not reactive

Question 19

How should marketers react to pressure groups?

Answer 19

What should be clear is that rather than looking for quick, reactive solutions to controversial issues, marketers need to take a step back and assess how society and the market/customer environment is changing, and how the company should respond strategically. What changes should be considered for example in
• Products supplied e.g. for their environmental impact
• Claims made for product efficacy
• Regional variations in price or availability
• Channel management e.g. in developing countries

Question 20

What is corporate culture?

Answer 20

Corporate culture is the collection of values, beliefs, ethics and attitudes that characterize an organization and guide its practices. To some extent, an organization’s culture can be articulated in its mission statement or vision statement.

Question 21

What are examples of different types of risk?

Answer 21

Performance risk – will the product perform as expected?
• Financial risk – is the product or service affordable?
• Physical risk – will the product actually harm the consumer?
• Social risk – what will others think about the purchase?
• Environmental risk – what harm might this purchase do to the Environment? What impact did its production and distribution have on the environment?
• Ego risk – am I doing the right thing?
• Time risk – how much time and effort needs to be spent making the
purchase. This can be a significant risk factor. For example, anxiety
covered by long delays, queries, etc.

Question 22

What are some factors of market attractiveness?

Answer 22

• Size
• Growth rate
• Profitability
• Pricing trends
• Intensity of competition
• Barriers to entry
• Segments
• Distribution structure
• Volatility

Question 23

What are some factors of company strength?

Answer 23

• Strength of competencies
• Market share
• Share growth
• Customer loyalty
• Cost proposition
• Profit margins
• Perceived quality
• Market knowledge

Question 24

How can the cultural web help see the bigger picture of the org’s culture?

Answer 24

The Cultural Web identifies six interrelated elements that help to make up the ‘paradigm’ – the pattern or model – of the work environment.
This creates the ‘culture’ of the organisation. Any large change usually requires a change to elements of
this cultural web. By analysing each factor, you can begin to see the bigger picture of the organisation’s culture and what elements need to change.