Marketing Environment

Marketing Environment
External forces that directly or indirectly influence a firm’s acquisition of inputs and creation of inputs
Why is the marketing environment important?
• It can change rapidly
• It is unpredictable
• It can offer opportunities (as well as threats)

➢ Firms should carefully think whether to take reactive or proactive approach to the marketing environment. But, whenever possible, taking proactive steps is mostly preferred

Environmental Scanning
The process of collecting information about forces in the marketing environment through observation of secondary resources
Environmental Analysis
The process of assessing and interpreting the information gathered through environmental scanning
External Forces
Competitive
Socio-Cultural
Political
Legal & Regulatory
Technological
Economic
Competitive Forces
Indirect v Direct competitors
Also market types
Direct competitors
Other firms that market products that are similar to or can be subsided for a firm’s product in the same target market segment
Brand competitors
Firms that market branded products with similar brand features and brand benefits to the same customers at similar prices
Product Competitors
Firms that compete in the same target market segment but market products with different features, benefits and prices
Generic Competitors
Firms that provide very different products that solve the same problem or satisfy the same basic customer need
Total Budget competitors
Firms that compete for financial resources of the same customers
Economic Forces
Buying power
Disposable income
Discretionary income
Willingness to spend
Buying power
Resources that can be traded in an exchange
Disposable income
Income after tax
Discretionary income
Disposable income after purchasing of basic necessities
Willingness to spend
An inclination to buy because of expected satisfaction for a product
Political, Legal and Regulatory Forces
Political forces potentially influence marketing
Laws, government agencies and pressure groups that influence and limit organisation and individuals in a given society
Technological Forces
Forces that affect new technologies, creating new product and market opportunities
Sociocultural forces
The influence in society and its cultures that change people’s attitudes, beliefs, norms, customs and lifestyles
Changes in demographic characteristics such as age, gender, race, ethnicity and education
Globalisation
Globalisation is the process by which firms operate on a global basis, that is, organising their structure, capabilities, resources and people in such a way to address the world as one market
Major Decisions in Globalisation
➢ Looking at the global marketing environment
➢ Deciding whether to go international
➢ Deciding which marker(s) to enter
➢ Deciding how to enter the market(s)
➢ Deciding on the global marketing program
➢ Deciding on the global marketing organisation
Global Strategy
The world as a single market
Multinational Strategy
The world as a portfolio of national opportunities
Glocal strategy
Standardises some core elements, and localises other elements
Export organisation
Simply shipping out goods
International Divisions
One or more functions responsible for offshore activities
Global organisation
Thinking as global marketers