Lecture notes, lecture 2 - Analyzing the marketing environment PDF

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Analyzing the marketing environment...

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Lecture 2: The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers. Marketing environment is divided into: 1) Microenvironment: consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. 2) Macro environment:

A- Microenvironment: a) The company:  Top management: set company's mission, objectives and broad strategies  Finance  R&D  Purchasing  Operations  Accounting Hint: Marketing managers must work with other departments, as other departments work affect the work of marketing in the company. b) Suppliers:  Provide the resources to produce goods and services.  Treated as partners to provide customer value.  Supply shortages or delays, labor strikes and other events can cost sales in short run and customer satisfaction on the long run. 1 Ismail Eltobgy

 Rising supply costs may force increases that can harm the company's sales volume. c) Marketing intermediaries: Help the company to promote, sell and distribute its products to final buyers. They include: i. Resellers: are distribution channel firms that help the company find customers or make sales to them. ii. Physical distribution firms: help the company to stock and move goods from their points of origins to their destinations. iii. Distribution and agents: are organizations based in the market that generally have a contractual relationship with the principal company to buy their products. iv. Marketing services agencies. v. Financial intermediates. d) Competitors: firms must gain strategic advantage by providing greater value and satisfaction than it competitors do. No single competitive marketing strategy is the best for all companies. Bigger firms can use strategies that small firms can not use. e) Public: is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objects Types: ( read P 70-71) – Financial publics – Media publics – Government publics – Citizen-action publics – Local publics – General public – Internal publics f) Customers

Macro environment:

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1) Demographic Environment: Demography:  is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.  Demographic environment is important because it involves people, and people make up markets.  Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity.  Generation X includes people born between 1965 and 1976 – High parental divorce rates – Cautious economic outlook – Less materialistic – Family comes first – Lag behind on retirement savings -Millennials (gen Y or echo boomers)include those born between 1977 and2000: – Comfortable with technology – Includes • Tweens (ages 8–12) • Teens (13–19) • Young adults (20’s)  Generational marketing is important in segmenting people by lifestyle instead of age. -More people are:  Divorcing or separating  Choosing not to marry  Choosing to marry later  Marrying without intending to have children  Increased number of working women  Stay-at-home dads  Moving from rural to metropolitan areas  Changes in where peoplework.  Home office  Divorcing or separating -Increasing Diversity:  Marketers are now facing increasingly diverse markets both at home and abroad as their operations become more international in scope. 3 Ismail Eltobgy

 Labor Migration and transfer money are both booming. 2)Economic Environment: consists of factors that affect consumer purchasing power and spending patterns.  Industrial economies are richer markets.  Subsistence economies consume most of their own agriculture and industrial output.  Increase in Income  Value marketing involves ways to offer financially cautious buyers greater  Value—the right combination of quality and service at a fair price. -Ernst Engel—Engel’s Law states that as income increase:  The percentage spent on food declines.  The percentage spent on housing remains constant.  The percentage spent on savings increases. 3) Natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of the following trends: o Shortages of raw materials o Increased pollution: ( air and water) o Increase government intervention in natural resources management. o Environmentally sustainable strategies: (an effort to create a world economy that the planet can support indefinitely. 4) Technological environment:  Most dramatic force in changing the marketplace.  Creates new products and opportunities.  Safety of new product always a concern. 5) Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. -Legislation regulating business:  Increased legislation..(protect companies, consumers & interest of society).  Changing government agency enforcement. 4 Ismail Eltobgy

-Increased emphasis on ethics:  Socially responsible behavior.  Cause-related marketing. 6) Culture Environments: Read Lecture 2 slides from 27 to 35

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