Chapter 2 marketing environment

CHAPTER 2 MARKETING ENVIRONMENT

part one: this is marketing

an opening challenge

You work for an oil company and Greenpeace protesters are currently camped outside the refinery. They are protesting over a proposed new pipeline and no one at the oil company seems surprised that they are there. In fact, the counter-arguments were prepared in advance and the press release has gone to all the newspapers. Greenpeace kept its intentions a secret, so how was this possible?

agenda

• market dynamics• stakeholders• analysing the marketing environment• situation analysis

market dynamics

market followers

first mover advantage?

market followers market

followers

marketleader

common problems for market pioneers

categories of errors– marketing mistakes– product mistakes– stuck with first-generation technology– resource limitationsDoyle (2002)

stakeholders

the organisation

consumers

customers

employees

distributorsinvestors

media

pressure groups

local communitygovernment

suppliers

opinionleaders

influencers

stakeholder mapping

level of interest

low highlow

powerhigh

what’s going on in the marketing environment?

gm foods

rise in obesity

ageing populations

elections

war

terrorism

transport problems

new competitors

packaging laws

new EU regulationsincreases in taxes

economic instability

changing tastes

new suppliersshareholder pressure

advertising campaignsdigital technologies

staff skills

immigration

global warming

fashion trends

online social networking

analysing environmental factors

PRESTCOM

PoliticalRegulatoryEconomicSocialTechnologicalCompetitiveOrganisationalMarket

the macro environment

(macro)economic

social(society) technology

political regulatory

the political environmentthe activities of:• government (central, regional, local and supranational)

– e.g. EU

• special interest, lobbying and pressure groups – e.g. Countryside Alliance, Friends of the Earth, CND, Amnesty,

Stonewall• trade unions

– e.g. Unison, UCU, NUS• political parties

the regulatory environment• laws– criminal and civil– e.g. Consumer Protection Act (1987)– e.g. negligence (a tort)

• codes of practice– e.g. Advertising Standards code

• customary practice

the economic environment• key economic indicators such as:– employment levels– interest rates– taxes– budget deficit– balance of payments– inflation– trade cycle movements

trade cycle (business cycle)AQ – type needs re-setting and ‘cofidence’ amended to

‘confidence’ x2

the social environment• population increases/decreases• demographic trends– e.g. more older people

• attitude changes– e.g. acceptance of gay couples

• patterns of behaviour– e.g. more working mothers

advances in the technological environment

• information technology (IT)– e.g. latest processors, storage devices, software

• communications technology– e.g. smartphones, 4G

• transport technologies– e.g. high-speed trains, electric cars

• production technology• medical technology

the micro environment(competitive and internal)

marketcompetition

organisation

the competitive environment

• direct competitors– similar products in the same category

• close competitors– alternative products in the same category

• substitutes– a product that fulfils the same need or has the same

core benefit• indirect competitors– any other product that may be bought instead

competitorsWhat kind of competitors are the following?• Irn Bru and Pepsi Cola• Coca Cola and Cadbury’s chocolate• a shirt and a pair of shoes• a Big Mac and a pizza• Coca Cola and Pepsi Cola

organisation (internal) environment

strengths and weaknesses in terms of:• staff and skills• finance• product range, brands• locations, stores, distribution network• reputation, brand image• innovation

market environment (customers)

• customers may be:– individuals (consumers)– organisations

• look for:– changes in taste, fashion– changes in purchasing behaviour– changes in product usage

the international environment

home countryPRESTCOM

other countries

PRESTCOM + CCC

the three Cs• country– e.g. history and geography– e.g. relationships between nations

• currency– e.g. stability

• culture– and sub-cultures

situation analysis

SWOT

strengths

weaknesses

opportunities

threats

AN OPPORTUNITY IS THE OPPOSITEOF A THREAT.IT IS NOT AN ACTION OR A STRATEGY.

the analysis

internal

external

SWOT analysis• organise environmental factors under SWOT

headings• match them– opportunities that play to strengths– threats that play to weaknesses

• rank them– according to importance to the organisation

summary• the importance of environmental scanning• the identification of key strengths and

weaknesses, opportunities and threats• understanding stakeholders and their

interests• sound analysis is the basis for objective

setting and marketing planning

reference

Doyle, P. (2002) Marketing Management and Strategy (3rd edn). Harlow: FT Prentice Hall.