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WEEK3

The document discusses the marketing environment and how companies can respond to it. It describes the internal and external factors that comprise the marketing environment and how marketers must monitor, identify opportunities and threats. It also explains reactive and proactive responses that companies can take to environmental changes.

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Zen Sage
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19 views

WEEK3

The document discusses the marketing environment and how companies can respond to it. It describes the internal and external factors that comprise the marketing environment and how marketers must monitor, identify opportunities and threats. It also explains reactive and proactive responses that companies can take to environmental changes.

Uploaded by

Zen Sage
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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WEEK3

Marketing Environment
• Comprises of forces that affect a company’s
ability to operate effectively in providing
products and services to its customers
• Constant monitoring is essential
• Exploitation of opportunities
• Potential threats identified
Marketing Environment
• Internal - company
• External - micro and macro
MARKETING ENVIRONMENT
• Comprises of forces that affect a company’s
ability to operate effectively in providing
products and services to its customers
• Constant monitoring is essential
• Exploitation of opportunities
• Potential threats identified Social

Distributors
Internal Environment
• Internal environment – factors within the
business
– Known as the company
– Have an impact on the marketing department’s
plans and actions and its ability to effectively
satisfy target market profit
– Employees, other departments i.e., R&D ,Sales,
HR, Finance
External Environment
• External environment – factors outside the
business
– Micro
– Macro
Micro Environment
• Micro environment – factors in the immediate
environment of the business
– Affect capability to operate effectively in chosen
market
• Such as:
– Suppliers
– Distributors
– Customers
– Competitors
Micro Environment - Suppliers
• Suppliers are the firms and individuals that
provide the resources needed by the company
to produce its goods and services .
- Marketing managers must therefore watch supply availability-
shortages and delays and other events .
“Supply chains can be simple and very complex.
For example, the average car contains about 15k
components. As a result, the car industry is
served by 3 tiers of suppliers. Tier- 1 companies
make electrical systems, tier -2 produce cables
and tier-3 basic commodities.”
Micro Environment - Customers
• The company needs to study five types of
customer markets closely :
• Consumer markets consists of individuals and
households that buy goods and services for
personal consumption .
• Business markets buy goods and services for
further processing or for use in their
production process .
Micro Environment - customers
• Reseller markets buy goods and services to
resell at a profit .
• Government markets are made up of agencies
that buy goods and services in order to
produce public services .
• International markets consists of buyers in
other countries including producers ,
consumers ,sellers and governments .
Micro Environment - Distributors
Independent middlemen such as retailers and
wholesalers who take the goods to the final
consumers
– They help in breaking of bulk
– Provide specialist services such as installation,
repairs etc.
– Help deliver products at the right place
– Advances impact performance of
manufacturers
Micro Environment-Competition

• Marketers must do more than simply adapt to


the needs of the target markets .
• Marketers must also gain strategic advantage
by positioning their offerings strongly against
their competitors’ offerings in the minds of
the consumers .
Micro Environment-competition

– Rarely competition free environments exist


– Alternatives exist for all products and services
– Competition levels vary across industries
– Keep deferential advantage over others
– Explore expansion into new markets
Competition Structures
Type/ Structure No. of players Ease of entry Products
Monopoly One Many barriers Almost no
substitutes

Oligopoly Few Some barriers Differentiated ,


with real/
perceived
differences
Monopolistic Many Few barriers Product
competition differentiation
Many substitutes
Pure competition Unlimited No barriers Homogenous
products
Macro Environment
Broader factors that may affect the business
– May also affect other players in the micro
environment
• Such as:
– Legal
– Economic
– Demographic
– Technological
– Political
– Cultural
Macro Environment - legal
• Legal
– Rules and regulations governing business
operation
– Interpret recent laws and cases to predict future
decisions
– Laws govern operation, competition, vulnerable
consumers
– Regulatory bodies
Macro Environment - Cultural
Culture influences the society in many ways
– i.e. language, beliefs, values, attitudes
– Peoples needs and desires for products
– Consumption patterns
– Influences consumer behaviour
Macro Environment - Cultural
• People’s beliefs and values have a high degree
of persistence
• Marketers must predict cultural shifts in order
to spot opportunities or threats
• Note . Marketers should analyze the
environmental forces and design strategies
that will help the firm to avoid threats and
exploit the opportunities provided .
Macro Environment -
Technological
Technological breakthroughs and advances
revolutionize the business environment
– Advances in products creation, new ways of doing
things
– New ways of delivering value to clients
– Investment in technology a key to success
– Innovation critical to businesses
– Eg. Cellphones as primary contacts instead of
landlines
– Kodak film vs digital
Analysis of the marketing
environment
• Managing the marketing function begins with
an analysis of the company's situation
• Perform SWOT analysis
Analysis of the marketing
environment
Analysis of the marketing
environment
• Managing the marketing function begins with
an analysis of the company's situation
Analysis of the marketing
environment
• SWOT objectives are:
– Match strengths with attractive opportunities
– Eliminate weakness
– Minimize threats
Responding to the marketing
environment

How do companies respond to the market


environment?
Responding to the marketing
environment

• Generally, there are two responses to the


marketing environment.
• Reactive
• Proactive
Responding to the marketing
environment
• Reactive marketing - A method of marketing
goods and services in which you give
information about a product to someone who
has already asked for such information ; you
reply to needs that have been expressed or to
requests for information that have been
made.
• It finds marketing environmental forces as
totally uncontrollable and unpredictable.
Responding to the marketing
environment
• This is a passive approach under which the
organization tries to adjust its marketing mix
and program according to the changes in the
environment.
• It also analyses the environmental changes
and finds suitable ways to avoid the threat
and utilize the new opportunities in the
market.(triggered by the environment).
Responding to the marketing
environment
• Proactive marketing- look for ways to change
the organization’s environment in the belief
that many, even most, environmental factors
can be controlled, or at least influenced in
some way.
• Proactive marketing involves the
implementation of prepared strategies,
whereas reactive marketing involves tactics
employed when opportunities arise.
Responding to the marketing
environment
• A proactive approach focuses on eliminating
problems before they have a chance to
appear while a reactive approach is based on
responding to events after they have
happened.
Responding to the marketing
environment

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