The marketing environment and market analysis Flashcards
What is the definition of opportunities?
Opportunities are factors that are potentially helpful in achieving the organisation’s objectives.
Role of marketers…
Aware of environmental forces that can positively or negatively affect their ability to serve their customers
Understand that changes in these environmental forces can affect their marketing decisions
Marketers operating in a global market should consider global developments that may influence these environmental forces
Marketers should react to the changes in the marketing environment
Understanding the marketing environment the company operates in will assist marketers in developing effective marketing strategie
Describe the marketing environment and the purpose of environmental analysis.
The marketing environment refers to all of the internal and external forces that affect a marketer’s ability to create, communicate, deliver and exchange offerings of value.
Marketers seek to understand, respond to, and influence their environment.
They use environmental analysis to break the marketing environment into smaller parts in order to better understand it.
What are the forces of macro-environmental forces?
The macro environment encompasses uncontrollable factors outside of the industry: political, economic, sociocultural, technological, environmental and legal forces.
*Political forces describe the influence of politics on marketing decisions.
Economic forces affect how much money people and organisations can spend and how they choose to spend it.
*Sociocultural forces affect people’s attitudes, beliefs, behaviours, preferences, customs and lifestyles. Technological forces are those arising from the search for a better way to do things.
Technology changes the expectations and behaviours of customers and clients as well as how organisations work with their partners and within society.
There is a wide range of environmental factors that companies need to be mindful of, including ecological and environmental aspects such as weather, climate and climate change.
Laws and regulations are closely tied to politics and establish the rules under which organisations must conduct their activities.
The most significant laws and regulations for marketers are related to privacy, fair trading, consumer safety, prices, contract terms and intellectual property.
Explain the factors at work in the organisation’s internal environment.
The internal environment refers to its parts, people and processes. An organisation is able to directly control the factors in its internal environment. A thorough understanding of the internal environment ensures that marketers understand the organisation’s strengths and weaknesses, which positively and negatively affect the organisation’s ability to compete in the marketplace.
Different parts of organisations often have different goals. The most successful organisations manage to align the goals of each part of the organisation to the overall market orientation of the business. This is most likely to occur when each person and department understands their contribution and the contribution of other departments. ❜
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Understand the importance of the different micro‐environmental factors.
The micro environment consists of customers, clients, partners, competitors and other parties that make up the organisation’s industry. The organisation cannot directly control its micro environment, but it can exert some influence over it.
Marketers must understand and respond to the current and future needs and wants of their target market.
They must understand how each of their partners’ processes work and how their partnerships benefit each party.
They must also understand the risks involved in working with partners and the relative power balance between the organisation and each partner.
Suppliers are a particularly crucial partner.
Marketers must identify, assess, monitor and manage risks to supplies and risks to the price of supplies.
To succeed, marketers must ensure their offerings provide their target market with greater value than their competitors’ offerings. Thus, marketers seek to understand their competitors’ marketing mix, sales volumes, sales trends, market share, staffing, sales per employee and employment trends.
Marketers should analyse total budget competition, generic competition, product competition and brand competition.
What is marketing planning and situation alaysis?
An ongoing process that combines organisational objectives and situation analyses to formulate and maintain a marketing plan that moves the organisation from where it currently is to where it wants to be.
An analysis that involves identifying the key factors that will be used as a basis for the development of marketing strategy.
(A platform of marketing planning)
What is standardization and customization?
Standardisation refers to applying a uniform marketing mix across international markets, with only minor modifications to meet local conditions (e.g. printing packaging or instructions in the local language or choosing a different price point to suit local incomes).
Customisation refers to carefully tailoring the marketing mix to the specific characteristics and wants of each market. For some marketers their offering is a mix of the two strategies.
Role of international marketers…
International marketers must understand the commonalities and differences between the markets. A key decision faced by international marketers is whether to standardise or customise their offerings.
What are “born global”?
A born global business is one that views the whole world as its market from day one. It will source materials from the most efficient country to source them, locate manufacturing operations in the country that provides the optimum conditions, manage itself from wherever it pleases and sell to anyone who wants its products anywhere in the world.
What is foreign direct investment?
Foreign direct investment involves outright ownership of a foreign operation. Direct ownership involves a long‐term commitment, considerable investment and acceptance of risk, and would usually only be pursued by an international marketer who was highly confident of success.
What is international strategic alliance?
A business that does not wish to or cannot make a direct investment in a foreign market may choose instead to form an international strategic alliance with a business based in that country. This requires both businesses to be confident in the abilities and products of the other. Strategic alliances only make sense and can only succeed when each partner brings value to the alliance and each partner stands to benefit.
What is joint venture?
In a joint venture arrangement, rather than form an alliance, the two businesses actually form a new business together in the target market and forge a new identity for it, distinct from the parent businesses.
Some joint ventures are balanced, while others will have a clear senior partner and clear junior partner.
Joint ventures can help foreign businesses get around restrictions that might be imposed by some countries and can help the foreign business achieve some level of official and public acceptance in the target market.
What is contract manufacturing?
Contract manufacturing, in contrast to licensing and franchising, is an approach to international marketing in which a domestic business pays a foreign business to manufacture its product and market it in that foreign country under the domestic company’s name.
What is franchise?
In a franchising arrangement, a business (the franchisee) pays the franchisor a fee in return for the right to market the franchisor’s product using the franchisor’s overall marketing and business plan. Such arrangements are familiar in the domestic market
