Unit 3: Analysing Internal & Micro Environments in Marketing - PDF

Unit 3: Analysing the Internal and microenvironments in marketing MRK 1103 - Principles of Marketing Dr Tabani Ndlovu  Lesson Objectives 2 By the end of this lesson, you should be able to: 1. Explain the Internal and micro environmental factors that affect an...

Unit 3: Analysing the Internal and microenvironments in marketing MRK 1103 - Principles of Marketing Dr Tabani Ndlovu  Lesson Objectives 2 By the end of this lesson, you should be able to: 1. Explain the Internal and micro environmental factors that affect an organisation’s marketing efforts. 2. Understand the different frameworks (SWOT) used for analysing an organisation’s internal and external marketing environments. 3. Understand how an organisation should respond to internal and external environmental factors. Who is important for each 3 company? Imagine you want to open a restaurant in Abu Dhabi or Sharjah Identify the different factors that you need to think about which could cause success or failure of your business. List at least 3 of these factors that are inside the organisation. Discuss what strategies you can take to manage the identified factors Present your findings 4 Present your responses back to the class and ensure fair distribution of work among colleagues Introduction to the Marketing 5 Environment A company operates within an environment where it interacts with many different factors The marketing environment can be divided into Firm Internal Environment Micro-environment Macro environment Each of these environments has several factors that the company needs to respond to or manage to  Introduction to the SW analyses (part 6 of aSWOT) For business to be successful, it needs to analyse its INTERNAL strengths and weaknesses Doing this, the company is able to identify external opportunities that match its strengths and capabilities This is very important because if a company chooses business opportunities that are bigger than what it can manage, this will result in failure. At the same time, the company must identify its weaknesses This allows the company to plan to address and  SWOT Analysis 7 To identify a company’s strengths and weaknesses in a structured way, a SWOT analysis is used: S=Strengths W=Weaknesses O=Opportunities T=Threats Strengths and Weaknesses are part of the INTERNAL ANALYSIS Opportunities and Threats  The Internal Environmental 8 Analysis Strengths – Strengths are sometimes known as Critical Success factors. They are aspects of the business that are strong and CONTROLLABLE Each company must assess itself to SWOT Analysis identify its strengths by answering these questions: What do we do well? What unique resources can we use to position ourselves ahead of competitors (skills, people, money, equipment, history, Activity – Group 9 Discussion What would you consider to be the Strengths of Starbucks? How do such strengths help the business? As an individual, what are your strengths? How can your strengths help you as an individual?  The Internal Environmental 10 Analysis Weaknesses – are parts of the business that put it at a disadvantage when compared to competitors e.g. negative reputation in customers’ eyes; poor product quality; poor customer service etc.. SWOT Analysis The company must identify these weaknesses in order to improve on them: Avoid being defensive and be honest with yourself, Conduct a detailed analysis of what has gone wrong in your organisation. Ask stakeholders what they feel could be improved  Activity – Group 11 Discussion As an individual, what would you consider to be your weaknesses? What should you do once you have identified your weaknesses? Share answers as a group and present a finalised response to the rest of the class. Class Activity – Internal 12 Analysis In your groups, do some internet research and: Identify 5 strengths that McDonalds has Identify 5 weaknesses that McDonalds has What is the danger to McDonalds if the Present yourweaknesses identified answers to are the not rest of your colleagues and listen to what other groups have identified addressed? Present your findings 13 # Strengths Weaknesses 1 2 3 4 5 6 1. Based on your findings, is McDonalds a strong or weak business? 2. What would you recommend to management? The Micro Environmental Factors The Micro Environment 15 Micro environmental factors are those immediately around but outside the company including customers, distributors, suppliers and competitors. Customers - This group is the primary reason why a company exists. The company should therefore develop a very close understanding of customers and their needs and build close relationships with these customers. If customers believe in and trust a company, they can continuously prefer it over competitors leading to high levels of loyalty. Competitors - These are other companies targeting the same customers and can potentially reduce the company’s profits. The company needs to do an analysis of competitors; who they are, what products and services they offer, what prices they charge and what customers say about them. With this intelligence, the company can make its own products and services better suited to customer needs and thus be more competitive. The aim is to have a competitive advantage – to be preferred amongst competitors. For example, In the UAE, Lulu competes with Carrefour, Almaya, Cooperative Society, Nesto, etc.  Class Activity – What to do 16 with this? In your groups, imagine you work for Lulu Supermarkets and your boss has asked you to: 1. Identify 3 different types of customers who shop at Lulu supermarkets 2. Identify 3 different competitors to WhatLulu should Lulu Supermarkets do for customers Supermarkets and competitors if it is to be successful? Present your answers to the rest of the class. Present your findings 17 The Micro Environment 18 Distributors - These are companies that help move a company’s products closer to where the customers are. These distributors tend to stock products from different competitors so it is important to develop closer relationships with them so that they can give a company’s products more favourable treatment. As an example, Almarai distributes its products through companies like Lulu, Carrefour etc. but the same companies also sell competing products from Al Rawabi, Al Ain Farms etc. Each of these companies tries to have a closer relationship with distributors to secure space for its products on the shelves. Suppliers - A company relies on suppliers to supply it with needed raw materials. It is therefore important to build strong relationships with suppliers to ensure that the company does not run out of supplies and can get high quality resources especially where there are shortages. For example, Carrefour, Lulu etc. want to ensure that they build strong relationships with Al Rawabi, Al Ain Farms etc. to benefit from various marketing activities.  Class Activity – What to do 19 with this? In your groups, imagine you work for Lulu Supermarkets and your boss has asked you to: 1. Identify 3 different types of distributors that Lulu could use to sell its products 2. Identify 3 different suppliers that Lulu Whatbuys should Lulu from products Supermarkets do for suppliers and distributors if it is to be successful? Present your answers to the rest of the class.  Class Activity – What to do 20 with this? In your groups, pick do some research on the internet to decide: 1. Why a company needs to worry about microenvironment factors? 2. What the company needs to do for each of the factors to be successful 3. What does each factor do or expect from the company? Present your findings 21 Recap Quiz 22 Your Teacher will give you a quiz designed to test your understanding of the concepts covered in this lesson. All students must participate and must use their registered names so their participation can be tracked. Teacher Go to www.Menti.com please use any tool that Enter the code provided by the you are comfortable teacher and enter your name to with: e.g. Kahoot, take part in the quiz Padlet, Menti etc. Preparation for Unit 4 23 1. The next unit will focus on the Macro environment 2. Each student is required to do some research before the lesson and answer the following questions: 1. What is the macroenvironment? 2. Name 5 factors in the macroenvironment Each student will be asked for their answers to the above questions. Do you have any Questions? 24 Based on what you have covered today, do you have any questions or comments? Project Task 25 Meet with your group members to identify the biggest competitor to your chosen project product. Conduct a SWOT analysis of your biggest competitor and complete the relevant section of the project proforma. After each lesson, you will be required to complete the relevant section of the proforma and get feedback  Thank You 800 MyHCT (800 www.hct.ac.ae 69428)