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Marketing Management MKT 600

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Title: Marketing Management MKT 600


1
Marketing Management MKT 600
Marketing Environment
2
Marketing 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

3
INTRODUCTION
  • 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.

4
MARKETING 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)
5
MICRO 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
6
Stakeholder 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
7
MACRO 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.
8
MACRO 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.

9
MACRO 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.

10
MACRO 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
11
MACRO 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.

12
MACRO 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
13
MACRO 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.

14
MARKETING 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.
15
PRINCIPLES 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
16
  • MARKETING RELATIONSHIPS

Economic Demographic
Technological
Intermediaries
Product
Target Customers
Publics
Price
Suppliers
Promotions
Place
Competition
Political Legal
Social Cultural
17
THE 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
18
SUMMARY
  • 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.
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