Evaluating Market Opportunities

What is a Marketing Managers role in a marketing enviroment?
must analyse customer needs and choose marketing strategy variables within the framework of the marketing environment and how it is changing
What are the two classifications of marketing environments that market managers must focus their attention on?
1. the direct market environment
2. the external market environment
Direct Market Environment
includes customers, the company, and competitors
External Market Environment
is broader and includes four major areas
The four major divisions (areas) of external market environments
1. Economic Environment
2. Technological Environment
3. Political and legal Environment
4. Cultural and social Environment
Uncontrollable Variables
a term used by marketing managers that aids in organizing and focusing their thinking when reviewing and analysing their market environment variables -over which they have no control
How can a marketing manager use the information gathered concerning the variables of a market environment?
should carefully analyse the environmental variables – when making decisions that can be controlled.
an example of the use of market environment variables information
a manager can select a strategy that leads the firm into a product market where competition is not yet strong
How does market environment variables shape opportunities?
limiting some possibilities and making others more attractive
What should set a firm’s course in maintaining their objective?
must decide where it is going in order to stay focused on objective
What should shape and direct the operations of a whole business?
The Company’s Objectives
What are the three basic objectives that provide a useful starting point for setting a firm’s objective guidelines
1. Engage in specific activities that will perform a socially and economically useful function.
2. Develop an organization to carry on on the business and implement its strategies.
3. Earn enough profit to survive.
A Company’s First Objective: socially useful
-not just a do-gooder objective
-business cannot exist without consumer approval
-if a firm’s business runs contrary to the consumer “good” it can be wiped out almost overnight by political or legal action or consumer’s own negative responses
A Company’s Third Objective: earn some profit
– a firm must make a profit to survive
-management must specify the time period involved
long term opportunities
-short term opportunities
Problem with long-term opportunities
many plans that maximize profit in the long run lose money during the first few years
Problem with short-term opportunities
seeking only short-term profits may steer the firm from long-term opportunities that would offer larger long-term profits
Target Rate of Profit
a limit of profit expected within a specific time line that will lead a firm into areas wth more promising possibilities
Companies Second Objective:the ability to carry on and implement strategy
a firm should develope its own objectives – beyond the three basic guidline objectives
Mission Statement
– sets out the organization’s basic purpose for being
– ideally should reflect a marketing orientation and not a production orientation
– consumer needed focused and stated in marketing terms that are intended to meet those needs
– should focus on a few Key goals rather than trying to be everything to everybody
– should supply guidelines when managers face difficult decisions
– statements made by an organization should make it clear that products, services or actions are within the scope of their mission statement
– may need to be revised as new market needs arise or as the marketing environment changes (this would be a fundamental change and not one made casually)
– not a substitute for more specific objectives that provide guidence in screening possible opportunities
Why a Misson Statement?
– sets a specific course for the whole company
– makes objective clear from the start
– prevents different managers from forming unspoken and conflicting objectives
Company Objectives in general
Top Management should set several objectives
– crucial that they be compatible
– marketing manager should be involved in setting company objectives
– Particular market objectives, should be set within the framework of the company’s larger objectives
How does the company’s objectives affect market managers?
these objectives guide managers as they
1. search for and evaluate opportunities
2. and later plan marketing strategies
How are company objectives and marketing objectives related?
Company objectives should lead to marketing objectives
What is and what purpose does a Hierarchy of Objectives accomplish?
– is the ordering of a company’s objectives as they search for and evaluate opportunities and plan marketing strategies
– organizes need objectives for each of the 4P’s
– organizes more detailed need objectives involved in the objectives of the 4P’s
Example of a Hierarchy of Objectives
– One of a companies objectives is to achieve high customer satisfaction
– R&D (reliability and design) people design a product or service to meet specific reliability objectives
– Similarily production people work to cut manufacturing defects
– In turn, the Marketing Dept, sets specific customer satisfaction objectives (to ensure that the sales and advertising people don’t promise more than the co. can deliver)
– Dealers/service people in turn, work to fix any problem the first time it’s reported.
What should be the shared goal of both a company’s objectives and their marketing objectives?
both Company and Marketing objectives should be realistic and achieveable. (overly ambitious objectives are useless if the firm lacks the resources to achieve them)