Chapter 3: identifying market opportunities Flashcards
(25 cards)
Environmental scanning
acquiring information about events, trends, and relationships in an organisation’s operating environment that marketers use to plan the organisation’s future course of action.
Financial ratios
the relationship between two selected numerical values taken from a company’s financial statements.
- Ratio analysis is one of the most common and best ways to quantify the financial situation of a company.
- If ratios are analysed over a period of at least three years trends can be discovered.
Industry analysis
an evaluation of the structure and dynamics of the industry in which an organisation operates, and strategic groups to which it belongs or wants to belong, to determine the attractiveness and dynamics of the market in which the company is competing or wants to compete.
Macro environment
the major uncontrollable external factors that influence a company’s decision-making and from which opportunities can be identified by means of environmental scanning.
- indirect effect
External factors
STEEPLE analysis
STEEPLE analysis
S= social
T= technological
E= environmental
E= economic
P= political
L= legal
E= ethical
Market analysis
taking into account the market’s size and growth rate as well as other dimensions such as profitability, cost structures, trends etc., to determine the degree to which a market offers opportunities to an organisation.
Marketing audit
systematic examination of an organisation’s marketing objectives, strategies, organisation and performance
- to identify marketing resources that are underutilised so that recommendations of how to make more effective use of these resources can be offered.
Market opportunity
a ‘gap’ in the marketplace where a need is not being satisfied sufficiently, representing a chance to design a product, service, or idea to bridge the gap and match the expectation in the market-place.
Market threat
those factors that can inhibit companies from achieving marketing objectives.
Market environment
- industry analysis and market analysis
- AKA micro environment
- direct impact
- customers, suppliers etc
Strategic group analysis= Porters five forces
- Bargaining power of suppliers
- Bargaining power of buyers
- Threat of new entrants
- Threat of substitutes
- Rivalry among competitors
Internal analysis
= SWOT analysis
Bargaining power of suppliers
how much suppliers have to increase prices and decrease quality.
- smaller amount of suppliers = increase in power
Bargaining power of buyers
how much buyers have to demand decrease prices and increase quality.
- increase in options = increase in power
Threat of new entrants
how easy is it to enter the market
- easy = competition to come
Threat of substitutes
increase in substitutes= more pressure to decrease prices
Rivalry among competitors
- increase in competitors= decrease in profits
- decrease in competitors= more room to grow
Social factor e.g.
- Social environment= job displacement or health consciousness or feelings of safety
- demographic environment
- cultural environment
Technological factors e.g.
- Innovation potential
- Replacement technology
- Research spending and funding
- New inventions and developments
Economic factors e.g.
-interest rates
- inflation
- import and export taxes
- exchange rates
Environmental factors e.g.
- energy usage
- sustainable pressures
- green alternatives
- Availability and cost of raw materials and energy
- environmental issues
Political factors e.g.
- Internal political issues
- government regulation and deregulation trends
- government leadership
- government stability
Legal factors e.g.
- Employment laws
- Competition regulations
- consumer regulations (POPI)
- Industry-specific regulations
