Week 3

1
Managing People, Finance and Marketing
Week 3 The European marketing environment Stephen
Ginns standing in for Tim Froggett
2
Micro- and macro-environment
3
Environmental scanning
The collection and evaluation of information from
the wider marketing environment that might affect
the organization and its strategic marketing
activities.
An important task but often a difficult one.
4
STEP analysis

• Organisations do not operate in a vacuum. They
  need to look outwards at the following factors
• Socio-cultural.
• Technological.
• Economic and competitive.
• Political and regulatory.

STEP PEST analysis
5
Elements of the external environment
Sociocultural Demographics Culture Attitudes
Current Issues
Technological Innovation Marketing/Administratio
n Products Materials/Components
Processes Distribution
Our Firm
Economic/Competitive Market Structure Government
Policy Trading Blocs Taxation Interest Rates
Political/Regulatory The EU National
Government Local Government Regulatory
Bodies Trade Associations
6
Socio-cultural influences
7
Company/industry examples

• Body Shop.
• Huntingdon Life Sciences.
• McDonalds.
• Organic food stuffs.
• The arms industry.
• Marks Spencer.
• The aviation industry.

8
Technological environment

• Fast moving and changing environment
• An environment with far reaching effects on
  businesses and their products/services
• Technological advances can affect materials,
  components and products, manufacturing business
  processes, administration and distribution
  systems
• Technology developed for other purposes, e.g.
  academic, medical or military use
• Market driven technological advances, e.g.
  companies RD departments searching for specific
  solutions to marketing problems.

9
Technology helping the dialogue between a company
and its customers

• Technology has helped market research - complex
  sets of data can be input and analysed quickly
  and safely.
• Database technology allows the storage, retrieval
  and maintenance of detailed customer profiles and
  the creation of personalised customer marketing
  offers.
• Information sharing and communication between
  company and customers.
• Means of ordering goods and services.

10
Technology and materials examples
Elite sports people want to maximise their
performance and look to sports clothing
manufacturers to provide sports wear that
provides that added edge Speedo the swim wear
manufacturer has its sharks skin suits that it
claims reduces drag and enhances a swimmers
performance in the water The Italian swim wear
company Diana (and the official supplier to the
UK swimming team) has its own developed fabric
which does not absorb water as other fabrics do.
11
Economic impact examples

• Rates of VAT vary across Europe - this had led to
  unofficial markets e.g. illegal imports of
  tobacco and alcohol.
• Interest rate changes can influence the amount of
  cash a consumer has available to purchase luxury
  items, for example.
• Exchange rates - for example strong exchange
  rates mean that imports become cheaper, exports
  however become more expensive.
• International trading blocs for example EU trade
  agreements, General Agreement on Tariffs and
  Trade (GATT), etc.

12
The political and regulatory environment

• National and local governments - determine and
  maintain the legislative framework within which
  organisations do business. Examples include
  contract law, consumer protection, competition
  and trading policies.
• The European Union - guidelines and directives
  which aim to achieve consistency across member
  states.
• Regulatory bodies - for example Office of Fair
  Trading, Advertising Standards Authority,
  Competition Commission, etc. These bodies are
  there to monitor and regulate commerce.

13
Information sources

• Previous experiences
• Personal contacts
• Published research studies
• Government statistics
• Trade sources
• Specially commissioned market research

14
Market structures

• Monopoly
• Oligopoly
• Monopolistic competition
• Perfect competition.

15

• Monopoly
• Where one supplier has sole control over a market
  and there is no competition.
• Where there is a captive market with no
  alternative source of supply.
• A strong positive image, good customer service,
  and fair pricing are essential.

16

• Oligopoly
• Where a small number of companies account for a
  large share of the market.
• Where a certain amount of interdependence exists
  between the key players.
• Oligopolists spend time watching each other.

17

• Monopolistic competition
• Many competitors in market
• Each has differentiated products

18

• Perfect competition
• Involves many small producers all supplying
  identical products that can be substituted for
  each other.
• Producers do not influence or determine price.
• There are no barriers to market entry or exit.
• Buyers and sellers have complete information
  about what is happening.

19
Porters Five Forces
Threat of New Entrants
Competitive Rivalry
Bargaining Power of Suppliers
Bargaining Power of Buyers
Michael E Porter Competitive Strategy, Free
Press, 1980
Threat of Substitute Products
20
Ansoffs Matrix
21
Boston Matrix
22
Shell Directional Policy Matrix
23
Seminar

• Review of Lecture
• case study (read before)
• Harvard References
• Research Sources