Lecture 2 Mba Marketing Management - Me Tmp
Transcript of Lecture 2 Mba Marketing Management - Me Tmp
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MBA MARKETING MANAGEMENTMarketing Environment and The Marketing Process
Lecture Overview
IntroductionMicro Environment:CompanyMarketsStakeholders
Macro Environment:P PoliticalE EconomicS SocialT Technological
Marketing ProcessMarketing Mix
Summary
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INTRODUCTION
It has been said that the only constant in life is change. Organisations existtoday in far more complex business environments than ever before, whichhas increased the importance of the marketing function.Environmental influences might be friendly or hostile and pose varied threatsand opportunities. Marketing needs to understand the changing business
environment in which its organisation operates so it can make informed,appropriate and timely decisions.
The marketing system as shown in your first lesson notes is itself encapsulated by what's generically called the marketing environment.Remember, marketing is essentially an externally focused function whichseeks to identify and take action against threats and opportunities. However,it also has to recognise the organisations strengths and weaknesses if it is toavoid the threats and take advantage of opportunities . As such, marketingneeds to understand its environment both at a macro and at a micro level.
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MARKETING ENVIRONMENTS
MACRO MICRO
(Uncontrollable variables) (Controllable variables)
PoliticalEconomicSocialTechnological
Company (marketing activities andplans)
Markets (customers/competitors)
Stakeholders
(customers/competitors,shareholders, suppliers, banks,retailers, creditors, employees,government etc)
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MICRO ENVIRONMENTIn this environment the company has some control of the various forces or players.
Company: Marketers need to develop close working relationships with other organisational functions, like accounting, engineering, design, production, purchasing, R&Detc in order to assess the strengths and weaknesses of the organisation.
Markets: A company’s customer – can include consumers, wholesalers, retailers, agents,local authorities, charities etc. Each market is different and so will have a different make upof customers with different needs.Competitors will also differ dependent on the customers needs to be served asshown below: - A typology of markets
Consumer markets Products Domestic
Industrial markets
Intermediary markets Services International
Institutional markets
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Stakeholder System:
As the name implies, a company operates when the context of a network of interest
groups each of which has a particular relationship with the organisation and oftenconflicting interests and motivations (see below a hypothetical company workingwithin the prescription and medical field).
Company
Research contractors
Customers/debtors
Retailers/wholesalers
Professional bodies
GovernmentMedical control bodiesHospital authorities
Employee unions
Banks&financial advisors
Shareholders
Competitors Suppliers/Creditors
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MACRO ENVIRONMENTIn this environment the company has very little control of the variousforces involved. There are various acronyms given to the macro forcessuch as DEPICTS , SLEPT , but the most common is called PEST and isshown below:
POLICTICAL
TECHNOLOGICALSOCIAL
ECONOMIC
Macro Environmental forces/ (factors or variables). Further variablessuch as demographics, culture, law, investment, competition areincluded in some of the other acronyms.
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MACRO ENVIRONMENT
Political (includes legal) - self regulation aside, most governmentshave developed a body of legislation and enforcement frameworks inrespect of industry trade and consumer rights. For example –
a) Legislation in respect of monopoly and competition standards re:Office of Fair Trading, Resale Price Maintenance Act, 1977,
Competition Act 1979 etc.b) EC membership means UK firms are also subject to Community
provisions in respect of Article 85 of the Treaty of Rome .c) Measures to protect consumers in terms of advice and guidance,
food, drugs etc. Much of this is covered in the Laws of Contract,Trade Description Act 1973 and the Food and Drugs Act 1955,Lotteries and Amusement Act 1976 Act 1976.
d) In addition to government and regulating bodies, there are alsoconsumer watchdogs such as the Consumer’s Association BureauEuropean des Union de Consummateurs, Friends of the Earth andGreenpeace etc.
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• Economic – income distribution and changes in purchasing power globally,upheavals in technology and communications have brought about a shift in thebalance of economic power. From the West (UK, USA, Europe) to the expandingeconomies of the Pacific Rim. WTO figures suggest by 2010 purchasing power income per head in countries like Singapore, South Korea and parts of China willexceed the USA. In western countries where consumer purchasing power is
reduced, as in economic recession, value for money becomes a key purchasingcriterion. Changing consumer spending patterns – older population means morespent on leisure, alcohol and health.
Increased cost of energyInflation, recession and recoveryGovernment fiscal policyGeneral agreement on tariffs and Trade GATT
Social – This force can normally be divided into 2 headings,demographical and cultural.
MACRO ENVIRONMENT
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MACRO ENVIRONMENTDemographics
Summary of key demographic variables shown below:
Data Trends andProjection
UK Population
Size and growthGrowth rate
Age structureBirth/death rates
Sex distributionLife expectancy
Density Location Geographic/regional shifts
Household sizeFamily size
Single non family householdsMarriage/divorce statistics
Income and wealthdistribution
Workingpopulations
Education andparticipation
Socioencomicgroups
Occupationalgroups
Ethniccomposition
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Demographics
Population and age distribution – many western countries birth rates aredeclining. Nil population growth rate at present but is expected to go into
decline from 2020 onwards. More than 25% of the population will beretired by 2010.Household/family composition – people marrying later. Younger peoplestaying at home with parents. Workforce participation among marriedwomen is increasing significantly. Career couples with no children now
commonplace especially among indigenous white population.Geographical shifts – many post-industrial societies in the UK and UShave witnessed major decline in population numbers and employment.
MACRO ENVIRONMENT
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MACRO ENVIRONMENTCulture – standardisation of cultural values continues within the EU, but lifestyles differ
across individual country markets. Social class structures as demonstrated by socioeconomicgroupings is not always relevant.
Socioeconomicgroup
Social class Type of occupation Example
A Upper classMiddle class
Higher managerial professional Surgeon, director of large company
B Middle class Intermediate managerialprofessional, admin
Bank manager, headteacher, surveyor
C1 Lower middleclass
Supervisory, junior managerial, or admin, clerical
Bank clerk, nurse,teacher, estate agent,police
C2 Skilled
working class
Skilled manual workers Joiner, welder,
foremanD Working class Semi-skilled and unskilled Driver, postman,
cleaner, shop worker
E Those atlowest level of subsidence
Low paid/unemployed Casual worker, statepensioners,unemployed,students
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• Technology – probably the most dramatic force now shaping our destiny which can create whole new markets and destroy others. Factorsinclude;
Pace of technological change – many of today's common products werenot available 100 years ago (e.g. TV's, Cars, homes freezers, computers,satellites, aeroplanes and mobile phones). The pace of technologicaldevelopment and therefore the product life cycles is getting shorter.
High R&D budgets – technology and innovations require heavyinvestment in R & D leading to more collaborative arrangements withsuppliers.
Concentration on minor improvements
Increased regulations – as products become more complex they need toknow they are safe. Such regulations can add significantly to productcosts.
MACRO ENVIRONMENT
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PRINCIPLES AND PRACTICE OFMARKETINGThe marketing management process within an organisation’s operations
Opportunity/Threat Analysis Organisation Resources
Development of Marketing strategy
Identification of target market/
determination of marketing mix
Implementation of MarketingStrategy
Monitoring and control of marketing activity
Organisational Objectives
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MARKETING RELATIONSHIPS
TargetCustomers
IntermediariesEconomicDemographic
Technological
SocialCultural
PoliticalLegal
Suppliers Publics
Competition
Product
Place
PricePromotions
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THE MARKETING ENVIRONMENT ANDTHE MARKETING PROCESS
Macro Environment
PRICE
PLACE PROMOTION
PRODUCT
ECONOMICINFLUENCES
DEMOGRAPHIC&
SOCIALINFLUENCES
LEGALINFLUENCES
TECHNOLOGICALINFLUENCES
COMPETITION
POTENTIALINFLUENCES
A marketing strategy within anenvironmental system
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SUMMARY
The marketing environment and the marketing process shapes themarketing strategy. Targeted customers stand in the centre of theorganisation and the company must focus its efforts at satisfyingthem.
The company develops a marketing mix made up of the resourcesunder its control (4 or 7P’s). The diagram on the next slide demonstrates the relationshipbetween the environment, the market, the company and its target
customers in enabling the organisation to adapts its microenvironment in order to take advantage of the opportunities or avoid the threats in its macro environment.