UNIT 2: Marketing Environment PDF

Strategic Marketing Sofía Alonso Ibáñez 2ºCYM UNIT 2: MARKETING ENVIRONMENT 1. ENVIRONMENT The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to bui...

Strategic Marketing Sofía Alonso Ibáñez 2ºCYM UNIT 2: MARKETING ENVIRONMENT 1. ENVIRONMENT The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers. - As environment has a lot of influence, it´s important to take advantage, understand what is happening and take al of this into account. 2. MICROENVIRONMENT The company. Internal environment. - The company is affected by elements that are part of the company. - Top Management. o They set the company´s mission, objectives, broad strategies and policies. ▪ They may not decide concrete things, but they may - Finance. o Finds and allocates funds to implement the marketing plan. - Research and development (R&D) o Designs safe and attractive products. ▪ They make good products. - Purchasing. o Get supplies and materials. - Operations. o Produces the desired quality and quantity of products. - Accounting. o Provides measures of costs and revenues. o Cost accounting is interesting for price setting. ▪ You need to know how much it costs to produce the product to know what price to charge. - Sometimes there are crosses between departments. o All the functions are related to marketing and all departments should understand that their purpose is to satisfy consumer needs. o It´s important that every segment of the company understands that the final objective is marketing, and this is selling, what also means solving needs. Suppliers. - They provide the resources needed to produce goods and services. - It´s important to watch out for supply availability, shortages or delays. - Monitoring price trends of key inputs. - The better your suppliers are, the better your products will be. o They are those who provide you with what you need to produce your goods and services, so your result depends on them. Strategic Marketing Sofía Alonso Ibáñez 2ºCYM Intermediaries. - Firms that help promoting, selling and distributing to final buyers. o Resellers: wholesalers and retailers. o Physical distribution firms: warehousing and transportation. o Marketing services agencies: market research, advertising, promotion… o Financial intermediaries: banks, credit companies, insurance. Customers. - There are two types of markets, depending on the final consumer or the action of the company. o B2C – Business to Consumer. ▪ When an independent person buys a product for himself or herself. ▪ We buy something to use it for our value, so, to use it, just to consume. o B2B – Business to Business. ▪ A company buys a product to produce, so, they buy something that they will sell later (with a transformation process that happened in the middle). o Reseller markets. ▪ A type of B2B. ▪ A company buys something in a B2B market, that they sell before without any transformation. o Institutional/government markets. ▪ The public administration buys to incorporate in production. o International markets. ▪ For the most part of B2B, importers that distribute in a specific country. Competitors. - Analysis of competitors is one of the keys to understand the success of a company. - Positionings against competitors´ offerings. Publics. - Financial publics: banks, investment houses, stockholders. - Media publics: newspapers, magazines, radio and tv stations. - Government publics: lawyers and officials. - Citizen action publics: consumer organisations, environmental groups… - Local publics: neighboorhod residents, community organisations. - General publics: public image. - Internal publics: workers, managers, volunteers, board of directors. 3. MACROENVIRONMENT Demographic. - It involves people, and it affects the market because markets are made of people. - Important to track. o Population growth trends. ▪ Some markets are increasing, but others are getting smaller (such as Europe). o Changing age structure. ▪ The factors that affect that are number of births, life expectancy and life quality. ▪ Now, there is more people over 65, and less under 14 because of the life expectancy and the projection. o Changes in the family composition. Strategic Marketing Sofía Alonso Ibáñez 2ºCYM o Changes in the family composition. ▪ Some years before, the ideal family had 2 parents and 2 children. ▪ Now, there are divorces, anticonception items… Economic. - Factors affecting purchasing power and spending patterns (willing to expend…). - Europe has been a single market since the introduction of the Euro (20 years). - Income. o There is difference depending on the economic situation. ▪ Consumers spend more rationally during recessions. ▪ Consumers spend more liberally during expansive periods. - Income distribution. o Not every segment gets affected equally by crisis ▪ Upper segments are less susceptive to economic downturns. ▪ Upper segments are the target for luxury products. ▪ Middle segments can afford good life some of the time. ▪ Lower segments stick to basics: food, clothing and shelter. - Changing consumer spending patterns: Engel´s law. Natural environment. - Growing shortages of raw materials. - Increased cost of energy. - Increased pollution and climate change. - Government intervention (resource management, regulations for emissions). Technological environment. - One of the most dramatic forces shaping our destiny. o Fast pace of technology change. o Increased regulation. - People don´t want to shop in physic stores because it is cheaper online, artificial intelligence… Cultural environment. - Persistence of cultural values. o Culture changes slowly. - Shifts in secondary cultural values. Political environment. - Laws, government agencies and pressure groups that influence and limit various organizations and individuals in a given society. - Types of influence: o Legislation that affects business. o Increased emphasis on ethics and socially responsible actions. Marketing environment is not uncontrollable. A proactive approach is of interest: Trying to influence legislation Trying to get press coverage Keeping competitors in line Partnering to better control distribution channels