Transcript The European Marketing Environment

The Marketing
Environment
Session 2
21st Century Marketing
Objectives of the session
Recap from previous session
 The importance of the external
environment to marketing decision
making
 Scanning the environment to identify
opportunities and threats
 Diverse nature of the marketing
environment
 Understand the influences at work in
the marketing environment

Marketing defined
Marketing is the management process
responsible for identifying, anticipating,
and satisfying customer requirements
profitably. (CIM, 2001)
Marketing activities/tasks
•
Identifying customer needs and motives - bringing you
products/services you want now and in the future.
•
Offering products at prices you can afford.
•
Providing information to make informed choices.
•
Satisfying consumer choices and giving value.
Marketing defined
Marketing is to establish, maintain and enhance
relationships with customers and other partners,
at a profit, so that the objectives of the parties
involved are met. This is achieved by mutual
exchange and fulfilment of promises.
Grönroos 1997
Corporate and social responsibility (CSR) -
Societal and ethical marketing
•
An emergent and growing marketing philosophy.
•
Companies continually strive to find effective ways to attract and
retain customers.
•
Importance of handling marketing responsibly in a way that
contributes to the well being of society.
•
Links between good ethics, market share and profitability.
•
Companies not only consider its customers and its profitability but
also the good of the wider community (local and globally).
UK report ‘Who are the Ethical consumers?’
(Roger Cowe and Co-operative Bank’s head of
corporate affairs) as quoted by Mason, 2000
The potential for ethical products and services in the UK could be as
high as 30% of consumer markets.
52% of consumers had recommended companies because of the
companies’ responsible reputation.
44% of consumers had avoided a product or service because of a
company’s behaviour.
The external organisational environment
Marketing as an interface
The basic marketing mix (4Ps)
The extended marketing mix (7Ps)
•
Price.
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Product.
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Place.
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Promotion.
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People.
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Processes.
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Physical evidence.
STEP analysis
Organisations do not operate in a vacuum. They need
to look outwards at the following factors:
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Socio-cultural.
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Technological.
•
Economic and competitive.
•
Political and legal.
Elements of the external environment
Environmental scanning
The collection and evaluation of information
from the wider marketing environment that might
affect the organisation and its strategic
marketing activities.
An important task but often a difficult one.
Information sources
• Previous experiences.
• Personal contacts.
• Published research studies.
• Government statistics.
• Trade sources.
• Specially commissioned market research.
Socio-cultural environment
Demographics:
 Age
 Gender
 Race
 Lifestyle
 Family life-cycle
 Occupation
Example – ‘The grey market’
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In the past 8 years pensioners incomes have risen faster
than average earnings
As much as 40% (£260bn) of the total UK annual consumer
spending can be attributed to the over 50s
People aged 50-65 spend twice as much on leisure and
entertainment than under 30s
The over 50s buy 80% for all the top of the range cars, 50%
of skin-care products and 80% of leisure cruises
56% of the over 50s have a home PC or laptop and 44% like
the idea of using the internet
70% have a mobile phone and 46% already have digital TV
Source: http://www.ageconcern.org.uk
Impact of societal attitudes on marketing
strategy
Technological environment
•
Fast moving and changing environment.
•
An environment with far reaching effects on businesses
and their products/services.
•
Technological advances can affect materials,
components and products, manufacturing business
processes, administration and distribution systems.
The technological advances
• Technology developed for other purposes, e.g.
academic, medical or military use.
• Market driven technological advances, e.g.
companies R&D departments searching for
specific solutions to marketing problems.
Technology and materials – an
example
Elite sports people want to maximise their performance
and look to sports clothing manufacturers to provide
sports wear that provides that added edge.
Speedo the swim wear manufacturer has its shark’s skin
suits that it claims reduces drag and enhances a
swimmers performance in the water.
The Italian swim wear company Diana (and the official
supplier to the UK swimming team) has its own
developed fabric which does not absorb water as other
fabrics do.
Technology helping the dialogue between
a company and its customers
•
Technology has helped market research - complex sets
of data can be input and analysed quickly and safely.
•
Database technology allows the storage, retrieval and
maintenance of detailed customer profiles and the
creation of personalised customer marketing offers.
•
Information sharing and communication between
company and customers.
•
Means of ordering goods and services.
Macroeconomic influences on the
flow of goods and services
Economic impact examples
•
Rates of VAT vary across Europe - this had led to ‘unofficial
markets’ e.g. illegal imports of tobacco and alcohol.
•
Interest rate rises can influence the amount of cash a consumer has
available to purchase luxury items, for example.
•
Exchange rates - for example strong exchange rates mean that
imports become cheaper, exports however become more
expensive.
•
International trading blocs for example EU trade agreements,
General Agreement on Tariffs and Trade (GATT), etc.
Market structures
•
Monopoly.
•
Oligopoly.
•
Monopolistic competition.
•
Perfect competition.
Monopoly
• Where one supplier has sole control over a
market and there is no competition.
• Where there is a captive market with no
alternative source of supply.
• A strong positive image, good customer service,
and fair pricing are essential.
Oligopoly
• Where a small number of companies account for
a large share of the market.
• Where a certain amount of interdependence
exists between the key players.
• Oligopolists spend time watching each other.
Monopolistic Competition
• Many competitors in market.
• Each has differentiated products.
Perfect Competition
• Involves many small producers all supplying
identical products that can be substituted for
each other.
• Producers do not influence or determine price.
• There are no barriers to market entry or exit.
• Buyers and sellers have complete information
about what is happening.
The political and regulatory environment
•
National and local governments - determine and
maintain the legislative framework within which
organisations do business. Examples include contract
law, consumer protection, competition and trading
policies.
•
The European Union - guidelines and directives which
aim to achieve consistency across member states.
•
Regulatory bodies – e.g. Office of Fair Trading,
Advertising Standards Agency, Competition
Commission, etc. These bodies are there to monitor and
regulate commerce.
Activity
Working in pairs, choose an
organisation or market sector of your
choice and carry out a STEP analysis.
What are the main influences affecting
its marketing environment