CHAPTER 3 Flashcards
(32 cards)
INTERNAL ENVIRONMENT
Everything that is happening inside of the company- controllable forces:
- Departments
Production
Marketing and or sales
HRM
-Resources
Financial
Technical
Knowledge
Sub-optimisation
a situation in which a business is not a successful as it could be because one part or department works only for its own success
The more customer-oriented the company is- the less likely the different departments are to clash
Organisations have a limited working force and resources- one way to determine them is to analyse- the company;s strengths and weaknesses- using mainly SWOT
EXTERNAL ENVIRONMENT
Uncontrollable forces outside of the organisation: meso environment (industry), macro environment (national, international)
MESO ENVIRONMENT
Customers (consumers, businesses)
TYPES OF CUSTOMER MARKETS:
THE CONSUMER MARKET- for products and services purchased or rented by individuals, families or households for their own consumption or use
THE INDUSTRIAL MARKET- for goods sold to and purchased by businesses for use in their own production of other goods and services which they then sell or supply to other businesses at a profit
THE INTERMEDIARY MARKET- consisting of organisations that buy products and resell them without any further processing, with the objective of making a profit
THE INSTITUTIONAL MARKET- the market consisting of large-scale users, government agencies and other non- profit organisations
Suppliers (integration, multiple sourcing- company can reduce its dependency on suppliers as well as its costs by buying from several suppliers)
Intermediaries- Companies that operate as a link between producers and consumers
Examples of intermediaries are distributors (wholesalers and retailers), marketing research agencies and transportation and storage companies
Competitors (meet same customer needs)
Public Groups:
- Financial institutions- banks for example- the extent to which the company can obtain extreme funding
- The media- influence public opinion
-The government- issue licences and permits
-Interest groups- some of these organisations try to influence policy by criticising what they consider to be unacceptable business activities and practices
THE SUPPLY CHAIN
The connected chain of all of the business entities, both internal and external to the company, which perform or support various functions in the production process
ORIGINAL PRODUCERS–> INTERMEDIARIES–> PRODUCERS OF SEMI-MANUFACTURED GOODS–> PRODUCERS OF END PRODUCTS–> WHOLESALERS–> RETAILERS—> CONSUMERS
MACRO ENVIRONMENT
DESTEP
Both external and internal environments affect markets and demand and influence marketing strategy
8 important trends for marketers
1) SPEED AND CHANGE (New techniques follow each other in rapid succession and innovative applications are adopted by society at lightning speed )
2) TRANSPARENCY
3) DATA (Digital analytics allow marketers to collect and analyse all kinds of data, For example Facebook Analytics show how target audience respond to paid messages and advertising)
4)GLOBALISATION International economies growing fast
5) NEW WAYS OF WORKING (Customer service and support is available 24/7
Companies have become increasingly accessible, information can be shared faster, work is becoming more efficient and allows work to be done anywhere )
6) CONTENT Is becoming important in branding, sales support and customer loyalty
7) CONNECTED ALWAYS AND EVERYWHERE (Mobile marketing became available and it makes easier to interact with the target audience personally and to build personal relationship)
8) INDIVIDUALISATION (The marketer needs to have a customer- centric approach instead of business- centric one)
9) INTERACTION BETWEEN CUSTOMERS (The rise of social media has made it easier for customers and people interested in a certain product to get in contact with one another)
market segments
groups of customers with common characteristics, such as age category in the case of consumers, or size in the case of companies
UTILITY
is the measure of the extent to which a product or service satisfies the needs and wants of a consumer or organisation
A company can compete on different levels
Depending on the needs, customers consider different products and brands
BRAND COMPETITION
Ben and Jerry’s and Haagen-Dazs ice cream
PRODUCT COMPETITION-
between different types of products within a particular product category (different forms of ice cream)
GENERIC COMPETITION-
occurs between alternative product lines that are able to satisfy the same consumer need for a nice dessert (such as the competition between ice cream and pudding)
NEED COMPETITION-
between the different kinds of needs for which the consumer is willing to pay (eating out or remodelling home)
Some managers make distinction between primary competition (between brands) and secondary competition (between products)
It is helpful to divide competitors into strategic groups:
Features (size, location, quantity level)
Identical strengths (distribution intensity, product development, product mix)
Similar strategies (positionIng, growth strategies)
Competitive analysis=
focuses on the type of competition in an industry
Some companies or many companies
Fierce competition or gentle competition
Competitor’s analysis-
focuses on the businesses within an industry
Benchmarking
is the process of comparing a company’s performance, processes, or products against industry standards or best practices to identify areas for improvement.
SUSTAINABILITY
SUSTAINABILITY
Businesses responsibly attempt to satisfy consumers’ wants and needs without impairing future generations’ ability to do the same
Increased competitiveness is the main reason for using sustainable practices
Green corporations are more likely to successfully compete in today’s global markets
THE MACROENVIRONMENT
DESTEP
D- demographic forces (age, gender, education, race, family size, degree of urbanization)
E- economic forces- Comsumer buying power is influenced by employment, productivity, distribution of income, inflation and interest rates
S- Sociocultural forces- Behavioural norms and values- religion, work ethic
T- Technological (3D printing, the improvements of existing products (self- driving cars) better services (telephone calls) efficient distribution systems (barcodes, scanning equipment)
Market pull- the need or requirement for a new product or a solution to a problem which comes from the marketplace
Technology puch- is when research and development is new technology, drives the development of new products
E- Ecological- green marketing (energy efficient, environmentally friendly) environmental movement (greepeace for example- raise awareness of environmental issues)
P- Political- laws and regulations influencing business or marketing strategies,
lobbying- attempt to persuade politicians to consider their interests by enacting, defeating or changing particular laws
