Title: Marketing Management MKT 600
1Marketing Management MKT 600
Marketing Environment
2Marketing Competitive Environment and The
Marketing Process
- Lecture Overview
- Introduction
- Micro Environment
- Company
- Markets
- Stakeholders
- Macro Environment
- P Political
- E Economic
- S Social
- T Technological
- Marketing Process
- Marketing Mix
- Summary
3INTRODUCTION
- It has been said that the only constant in life
is change. Organisations exist - today in far more complex business environments
than ever before, which - has increased the importance of the marketing
function. - Environmental influences might be friendly or
hostile and pose varied threats - and opportunities. Marketing needs to understand
the changing business - environment in which its organisation operates so
it can make informed, - appropriate and timely decisions.
- The marketing system as shown in your first
lesson notes is itself - encapsulated by what's generically called the
marketing environment. - Remember, marketing is essentially an externally
focused function which - seeks to identify and take action against threats
and opportunities. However, - it also has to recognise the organisations
strengths and weaknesses if it is to - avoid the threats and take advantage of
opportunities . As such, marketing - needs to understand its environment both at a
macro and at a micro level.
4MARKETING ENVIRONMENTS
MACRO MICRO
(Uncontrollable variables) (Controllable variables)
Political Economic Social Technological Company (marketing activities and plans)
Political Economic Social Technological Markets (customers/competitors)
Political Economic Social Technological Stakeholders (customers/competitors, shareholders, suppliers, banks, retailers, creditors, employees, government etc)
5MICRO ENVIRONMENT
- In this environment the company has some control
of the various forces or players. -
- Company Marketers need to develop close working
relationships with other - organisational functions, like accounting,
engineering, design, production, purchasing, RD - etc in order to assess the strengths and
weaknesses of the organisation. - Markets A companys customer can include
consumers, wholesalers, retailers, agents, - local authorities, charities etc. Each market is
different and so will have a different make up - of customers with different needs.
- Competitors will also differ dependent on the
customers needs to be served as - shown below - A typology of markets
Consumer markets Products Domestic
Industrial markets Products Domestic
Intermediary markets Services International
Institutional markets Services International
6Stakeholder System
- As the name implies, a company operates when the
context of a network of interest - groups each of which has a particular
relationship with the organisation and often - conflicting interests and motivations (see below
a hypothetical company working - within the prescription and medical field).
Research contractors
Competitors
Suppliers/Creditors
Customers/debtors
Shareholders
Company
Retailers/wholesalers
Banksfinancial advisors
Employee unions
Professional bodies
Government
Hospital authorities
Medical control bodies
7MACRO ENVIRONMENT
- In this environment the company has very little
control of the various - forces involved. There are various acronyms given
to the macro forces - such as DEPICTS, SLEPT, but the most common is
called PEST and is - shown below
POLITICAL
ECONOMIC
TECHNOLOGICAL
SOCIAL
Macro Environmental forces/ (factors or
variables). Further variables such as
demographics, culture, law, investment,
competition are included in some of the other
acronyms.
8MACRO ENVIRONMENT
- Political (includes legal) - self regulation
aside, most governments - have developed a body of legislation and
enforcement frameworks in - respect of industry trade and consumer rights.
For example - Legislation in respect of monopoly and
competition standards re Office of Fair
Trading, Resale Price Maintenance Act, 1977,
Competition Act 1979 etc. - EC membership means UK firms are also subject to
Community provisions in respect of Article 85 of
the Treaty of Rome . - Measures to protect consumers in terms of advice
and guidance, food, drugs etc. Much of this is
covered in the Laws of Contract, Trade
Description Act 1973 and the Food and Drugs Act
1955, Lotteries and Amusement Act 1976 Act 1976. - In addition to government and regulating bodies,
there are also consumer watchdogs such as the
Consumers Association Bureau European des Union
de Consummateurs, Friends of the Earth and
Greenpeace etc.
9MACRO ENVIRONMENT
- Economic income distribution and changes in
purchasing power globally, - upheavals in technology and communications have
brought about a shift in the - balance of economic power. From the West (UK,
USA, Europe) to the expanding - economies of the Pacific Rim. WTO figures suggest
by 2010 purchasing power - income per head in countries like Singapore,
South Korea and parts of China will - exceed the USA. In western countries where
consumer purchasing power is - reduced, as in economic recession, value for
money becomes a key purchasing - criterion. Changing consumer spending patterns
older population means more - spent on leisure, alcohol and health.
- Increased cost of energy
- Inflation, recession and recovery
- Government fiscal policy
- General agreement on tariffs and Trade GATT
- Social This force can normally be divided into
2 headings, - demographical and cultural.
-
10MACRO ENVIRONMENT
- Demographics
- Summary of key demographic variables shown below
Data Trends and Projection UK Population UK Population UK Population
Data Trends and Projection Size and growth Growth rate Age structure Birth/death rates Sex distribution Life expectancy
Data Trends and Projection Density Location Geographic/ regional shifts
Data Trends and Projection Household size Family size Single non family households Marriage/divorce statistics Single non family households Marriage/divorce statistics
Data Trends and Projection Income and wealth distribution Working populations Education and participation
Data Trends and Projection Socioencomic groups Occupational groups Ethnic composition
11MACRO ENVIRONMENT
- Demographics
- Population and age distribution many western
countries birth rates are - declining. Nil population growth rate at present
but is expected to go into - decline from 2020 onwards. More than 25 of the
population will be - retired by 2010.
- Household/family composition people marrying
later. Younger people - staying at home with parents. Workforce
participation among married - women is increasing significantly. Career couples
with no children now - commonplace especially among indigenous white
population. - Geographical shifts many post-industrial
societies in the UK and US - have witnessed major decline in population
numbers and employment.
12MACRO ENVIRONMENT
- Culture standardisation of cultural values
continues within the EU, but lifestyles differ - across individual country markets. Social class
structures as demonstrated by socioeconomic - groupings is not always relevant.
Socioeconomic group Social class Type of occupation Example
A Upper class Middle class Higher managerial professional Surgeon, director of large company
B Middle class Intermediate managerial professional, admin Bank manager, head teacher, surveyor
C1 Lower middle class Supervisory, junior managerial, or admin, clerical Bank clerk, nurse, teacher, estate agent, police
C2 Skilled working class Skilled manual workers Joiner, welder, foreman
D Working class Semi-skilled and unskilled Driver, postman, cleaner, shop worker
E Those at lowest level of subsidence Low paid/unemployed Casual worker, state pensioners, unemployed, students
13MACRO ENVIRONMENT
- Technology probably the most dramatic force now
shaping our - destiny which can create whole new markets and
destroy others. Factors - include
- Pace of technological change many of today's
common products were - not available 100 years ago (e.g. TV's, Cars,
homes freezers, computers, - satellites, aeroplanes and mobile phones). The
pace of technological - development and therefore the product life cycles
is getting shorter. - High RD budgets technology and innovations
require heavy - investment in R D leading to more collaborative
arrangements with - suppliers.
- Concentration on minor improvements
- Increased regulations as products become more
complex they need to - know they are safe. Such regulations can add
significantly to product - costs.
14MARKETING PROCESS
Where are we at? i.e. Opportunities and threats assessment of environment
Deciding where to go setting of objectives
Determine which way is best Deciding strategies (i.e. who/what market to target with what positioning)
How do we set about achieving? Planning marketing programmes 4 PS Product Price Target Market Promotion Place
Organising the marketing effort Marketing plan resource planning, implementation
Reappraise through control Rapid changes in the environment means each P needs to be reassessed periodically and its effectiveness checked via a marketing audit.
15PRINCIPLES AND PRACTICE OF MARKETING
- The marketing management process within an
organisations operations
Opportunity/Threat Analysis
Organisation Resources
Organisational Objectives
Development of Marketing strategy Identification
of target market/ determination of marketing mix
Implementation of Marketing Strategy
Monitoring and control of marketing activity
16Economic Demographic
Technological
Intermediaries
Product
Target Customers
Publics
Price
Suppliers
Promotions
Place
Competition
Political Legal
Social Cultural
17THE MARKETING ENVIRONMENT AND THE MARKETING
PROCESS
Macro Environment
A marketing strategy within an environmental
system
POTENTIAL INFLUENCES
ECONOMIC INFLUENCES
PRICE
PRODUCT
COMPETITION
DEMOGRAPHIC SOCIAL INFLUENCES
PLACE
PROMOTION
LEGAL INFLUENCES
TECHNOLOGICAL INFLUENCES
18SUMMARY
- The marketing environment and the marketing
process shapes the - marketing strategy. Targeted customers stand in
the centre of the - organisation and the company must focus its
efforts at satisfying - them.
- The company develops a marketing mix made up of
the resources - under its control (4 or 7Ps).
- The diagram on the next slide demonstrates the
relationship - between the environment, the market, the company
and its target - customers in enabling the organisation to adapts
its micro - environment in order to take advantage of the
opportunities or - avoid the threats in its macro environment.