BCPC 205 Elements of Marketing Lecture 3 PDF

BCPC 205 ELEMENTS OF MARKETING LECTURE THREE THE MARKETING ENVIRONMENT  Presentation Overview 1. Definition of Marketing Environment 2. The Micro-environment 3. The Macro-environment 4. Micro-environmental factors 5. Macro-environmental factors 6. Responding to the Marketing...

BCPC 205 ELEMENTS OF MARKETING LECTURE THREE THE MARKETING ENVIRONMENT  Presentation Overview 1. Definition of Marketing Environment 2. The Micro-environment 3. The Macro-environment 4. Micro-environmental factors 5. Macro-environmental factors 6. Responding to the Marketing Environment  Definition of Marketing Environment  The actors and forces outside marketing that affect marketing management‘s ability to develop and maintain successful transactions with its target customers (Kotler, Armstrong, Saunders and Wong, 1999)  The Micro-environment The forces close to the firm that affect its ability to serve its customers The firm, could have strenghts in the micro-environment which it can capitalise on to serve customers better  The Micro-environment  Likewise, the firm could possess some weaknesses in the micro- environment  The firm should strive to turn those weaknesses into strengths (competitive advantage)  The Macro-environment Forces relatively remote to the firm that affect its ability to serve customers These forces present the firm with opportunities and threats  Micro-environmental factors Units/departments in the firm Customers Suppliers Marketing intermediaries Competitors Publics  Units/departments in the firm All other units within the firm affect the ability of the marketing unit to serve customers The marketing unit must ensure that marketing plans & decisions are consitent with overall plan of the firm  Units/departments in the firm Marketing decisions & plans must be approved by top management before implemented Marketing unit must work closely with other units of the firm: production, finance, R&D, purchasing, accounting, etc.  Customers To serve customers well, the marketing unit must study the characteristics & needs of its customers The marketing unit must communicate appropriately its offer to customers  Customers - Types Consumer markets Business markets Reseller markets Institutional markets Government markets International markets  Suppliers Suppliers affect the ability of the marketing unit in providing quality & timely products Thus, suppliers can contribute to the growth of or damage customer good will  Suppliers The marketing unit must always monitor the ff for timely action: Availability of supplies/inputs Quality of supplies/inputs Price trends & prices of various suppliers  Marketing intermediaries These are firms that help the firm to promote, sell & distribute its products to final buyers. Resellers Physical distribution firms Marketing services agencies Financial intermediaries  Marketing intermediaries Selection of an intermediary should be based on careful analysis of the intermediary‘s ability to help serve customers better  Competitors In addition to providing customer value & satisfaction, the marketing unit must ensure that it does so more than competitors do The unit must gain a strategic competitive advantage through effective positioning  Publics Any group that has an actual or potential interest in or impact on a firm‘s ability to achieve its objectives A marketing plan could be developed to elicit the desired response from publics  Publics Any group that has an actual or potential interest in or impact on a firm‘s ability to achieve its objectives A marketing plan could be developed to elicit the desired response from publics  Publics Financial publics Media publics Government publics Citizen action publics Local publics General public Internal publics  Macro-environmental factors Socio-cultural environment Legal (Political) environment Economic environment Demographic environment Technological environment Natural environment  Socio-cultural environment Comprises institutions & other forces that affect society‘s basic values, perceptions, preferences & behaviours  Socio-cultural environment the marketing unit must monitor persistence & shifts in cultural values for appropriate action  Legal/Political environment Comprises laws that set basic rules for operation of businesses in society Legislation regulating businesses, consumer protection laws, environmental laws, laws on product safety, etc.  Legal/Political environment Changes in the political environment come with changes in the legal environment These changes may be opportunities or threats that would have to be acted upon  Economic environment Consist of factors that affect consumer purchasing power & spending patterns Changes in income, cost of living, interest rates, savings & borrowing patterns affect the marketing task  Economic environment The marketing unit must be aware of & appropriately respond to the following: Income distribution & changes in purchasing power Changing consumer spending patterns  Economic environment In turbulent economic periods marketers must pursue value- based marketing This helps to capture & maintain price-conscious customers  Technological environment Technological advancement affect the ability of marketers to serve customers better through the offer of new & improved products and new & improved processes/ways of serving customers  Technological environment Marketers have to grapple with the ff: Fast pace of technological change & what to do High R & D costs Increased regulation  Demographic environment Comprises people & related issues such as population size, density, location, age, gender, race, occupation, etc. People are very important because they constitute a market  Demographic environment The ff must be monitored for appropriate marketing decisions: Population size & growth trends Changing age structure of a population The changing family  Demographic environment Rising number of educated people Increasing diversity (integration)  Natural environment Consist of natural resources required as inputs by marketers that are affected by marketing activities  Natural environment The marketing unit must be concerned about the ff: Shortages of raw materials Increased cost of energy Increased pollution Government intervention in natural resource management  Responding to the Marketing Environment It is important to note the ff: Environmental factors are highly interrelated  Responding to the Marketing Environment Marketers respond to the environment in either of the ff ways: Adapting to changes in the environment Adopting an environmental management perspective