Chapter_2_-_The_marketing_environment_2023.pdf

Food marketing and consumer behaviour Academic year 2023-2024 Prof. dr. ir. Wim Verbeke Prof. dr. Christine Yung Hung ir. Fien Minnens Department of Agricultural Economics [email protected]; [email protected]; [email protected] Food marketing and consumer behaviour - Marketing environment...

Food marketing and consumer behaviour Academic year 2023-2024 Prof. dr. ir. Wim Verbeke Prof. dr. Christine Yung Hung ir. Fien Minnens Department of Agricultural Economics [email protected]; [email protected]; [email protected] Food marketing and consumer behaviour - Marketing environment 1 Chapter 2: The marketing environment • The environment in which companies operate (are active, function, …) Consists of: • External, exogenous forces • = uncontrollable factors; uncontrollable by a single institution Food marketing and consumer behaviour - Marketing environment 2 The business and its marketing environment Food marketing and consumer behaviour - Marketing environment 3 Components of the marketing environment Food marketing and consumer behaviour - Marketing environment 4 Components of the (macro-)marketing environment Food marketing and consumer behaviour - Marketing environment 5 Synthesis: Five “forces” in the marketing environment 1. 2. 3. 4. 5. Economic forces Structural forces Political forces Social forces Technological forces Have an impact on: • Individual firms • Competitors • Whole industry Food marketing and consumer behaviour - Marketing environment 6 1. Economic forces • Performance of the economy = facts – – – – – Gross national product Family income Unemployment rate Business investments Economic indices Food marketing and consumer behaviour - Marketing environment 7 1. Economic forces • Consumer confidence = perception of facts – – – – Disposable income Inflation rate Media information International and national events (e.g. conflicts) • Impact of economic forces – Think of: “good” versus “bad” times Food marketing and consumer behaviour - Marketing environment 8 2. Structural forces – – – – Market structure of an industry Vertical and horizontal integration E.g. integration in the poultry business Market entry barriers (Porter’s scheme) Food marketing and consumer behaviour - Marketing environment 9 Market entry barriers (Porter) & Marketing environment Food marketing and consumer behaviour - Marketing environment 10 Figure title Food marketing and consumer behaviour - Marketing environment 11 Low entry barriers Suppliers and buyers have strong positions Strong threats from substitute products Intense rivalry among competitors Unattractive Industry Low profit potential Food marketing and consumer behaviour - Marketing environment 12 High entry barriers Suppliers and buyers have weak positions Few threats from substitute products Moderate rivalry among competitors Attractive Industry High profit potential Food marketing and consumer behaviour - Marketing environment 13 3. Political forces • Domestic politics (e.g. national or EU policies) – Consumerism: safe, informed, choice, voice – Legal / Regulatory environment: • Consumer protection regulations • Competition regulation • Information regulations • International politics Situations of cooperation  Situations of conflicts Food marketing and consumer behaviour - Marketing environment 14 4. Social forces • Social values / factors – – – – – Environmental consciousness, Animal welfare Health consciousness, Quality orientation Involvement in labour force Less time for leisure / But interest in Quality Time Religion • Demographics – Age structure: « double-ageing » evolution – Population growth or decline – Emigration / Immigration Food marketing and consumer behaviour - Marketing environment 15 5. Technological forces • At different stages in the agro-food chain – Fertilizer and seeds (innovations) • Biotechnology - Genetic modification – Harvest and processing technologies – Packaging and preservation technologies – New methods of sales and distribution • Direct sales • Internet sales • Consumer acceptance ? To be monitored ! Food marketing and consumer behaviour - Marketing environment 16 6. Coping with the environment • • • • Keep informed! Act collectively! Develop contingency plans! Beware of the ‘Boiled Frog Syndrome’ Food marketing and consumer behaviour - Marketing environment 17 The Boiled Frog Syndrome 1 3 2 4 Food marketing and consumer behaviour - Marketing environment 5 18 The Boiled Frog Syndrome • If you place a frog in a pot of boiling water, the frog will immediately try to scramble out • But if you place a frog in room temperature water, and don't scare the frog, and then ... Food marketing and consumer behaviour - Marketing environment 19 • Now, if the pot is on a heat source, and if you gradually turn up the temperature, something very interesting happens … • As the temperature rises from 70 to 80 degrees F. (22 to 27°), the frog will do nothing … • The frog will even show every sign of enjoying himself … Food marketing and consumer behaviour - Marketing environment 20 • As the temperature gradually increases, the frog will become groggier and groggier, until the frog is unable to climb out of the pot. • Though there is nothing restraining the frog from getting out, the frog will sit there and boil to death. Food marketing and consumer behaviour - Marketing environment 21 6. Coping with the environment • Beware of the ‘Boiled Frog Syndrome’ • Main message: • Everybody notices revolutionary changes in the environment; you won’t miss them, but … • The slow gradual changes are the most dangerous ones • Constantly monitor changes in the environment • Especially, monitor slow and gradual changes • Anticipate on time, and act quickly Food marketing and consumer behaviour - Marketing environment 22 SWOT-analysis: What? • Strategic planning tool • To monitor and analyse changes in the environment • Developed in the 1960s; Harvard Business School • SWOT is performed by: – An individual, e.g. consultant – A group; e.g. senior company managers • Mainly descriptive analysis Food marketing and consumer behaviour - Marketing environment 23 SWOT- components Environment consists of : • O: OPPORTUNITIES – Outside the company, external factors/forces – Offers new perspectives, chances, ... • T: THREATS – Outside the company, external factors/forces – Can cause problems, losses, … • Neutral factors : irrelevant evolutions or trends Food marketing and consumer behaviour - Marketing environment 24 Ranking / Evaluation O and T Probability of O/T occuring LOW HIGH HIGH Relevance to the company LOW Food marketing and consumer behaviour - Marketing environment 25 SWOT- components • S: STRENGTHS – Inside the company, internal factors – Enable the company to: • Benefit from opportunities • Cope with threats • W: WEAKNESSES – Inside the company, internal factors – Prevent the company to: • Benefit from opportunities • Cope with threats Food marketing and consumer behaviour - Marketing environment 26 Strengths / Weaknesses: Examples • Marketing – – – – – Company image and reputation Market share Own sales force Own distribution channels Research & Development • Financial – Cost of capital – Financial stability – Profitability Food marketing and consumer behaviour - Marketing environment 27 Strengths / Weaknesses: Examples • Manufacturing – Facilities, technical and manufacturing skills – Economies of scale – Own work force (employees) • Organisational – – – – – Visionary leadership Managing capability Flexibility Dedicated workers Entrepreneurial orientation Food marketing and consumer behaviour - Marketing environment 28 Corporate interface of marketing Strengths or weaknesses can be situated at any of the interfaces Food marketing and consumer behaviour - Marketing environment 29 Ranking / Evaluation S and W Competitive advantage SMALL LARGE HIGH Internal Consciousness LOW Food marketing and consumer behaviour - Marketing environment 30 SWOT - grid EXTERNAL O I N T E R N A L S W T Does this strength enable us to benefit from this opportunity? To what extent? Does this strength enable us to cope with this threat? To what extent? Does this weakness prevent us to benefit from this opportunity? To what extent? Does this weakness prevent us to cope with this threat? To what extent? Food marketing and consumer behaviour - Marketing environment 31 SWOT – grid STRATEGIC CHOICE EXTERNAL O I N T E R N A L T S ATTACK DEFEND W CLEAN UP CRISIS Food marketing and consumer behaviour - Marketing environment 32 Current strategy Internal analysis External analysis Strengths & Weaknesses Opportunities & Threats Key attention points Alternative strategies New strategy Implementation Food marketing and consumer behaviour - Marketing environment 33 SWOT-analysis • Some criticism on SWOT: – Is often no more than list-making – Does seldom go beyond weighing or prioritising factors included in the matrix – Often includes unclear, ambiguous words Nevertheless: – Highly relevant and frequently used analysis tool for strategic decision making ! • Exercise : TASK 1 Food marketing and consumer behaviour - Marketing environment 34