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CHAPTER 3: ANALYZING THE MARKETING ENVIRONMENT - Coggle Diagram
CHAPTER 3: ANALYZING THE MARKETING ENVIRONMENT
Microenvironment
Marketing Intermediaries
Firms that help the company promote, sell, and distribute its products to final buyers.
Include resellers, physical distribution firms, marketing service agencies, and financial intermerdiaries
Marketing intermediaries are important partners to performance optimization
Publics
Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives
Internal Publics: Company people whose influence may spill over to the external. (workers, managers, volunteers, board of directors.)
General Public: All the people of an area, their image of the company is important to buying
Local Publics: Local and community orrganizations and people (Neighbourhood residents, and community organizations)
Financial Publics: Influences ability to obtain funds (Banks, stockholder)
Media Publics: Carries news, features, editorial opinion (Newspapers, magazines, television stations.
Government Publics: Government developments or laws (issues of safety, truth in advertising)
Citizen-action Publics: May question marketing decisions.(consumer organizations, environmental groups, minority groups)
Suppliers
provide the resources needed by the company to produce its goods and services.
Marketing managers must watch supply avaibility and costs.
The Company
Other company department,such as top management, finance, research and development (R&D), purchasing, operations, human resources, and accounting affect the marketing plans.
Definition
Microenvironment: The actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.
Macroenvironment: The larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political,and cultural forces.
Macroenvironment
The technological environment
Forces the create new technologies, creating new product, and market opportunities.
New technologies replace old technologies and may cause certain business to decline if they do not keep up.
Research is carried out by research teams - products should be technical and commercial so that they can be practical and affordable
The Demographic Environment
Study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.
Baby boomers: The 78 million people born during the years following World War II and lasting until 1964.
Generation X: The 49 million people born between 1965 and 1976 in the “birth dearth” following the baby boom
Millennials (or generation Y): The 83 million children of the baby boomers born between 1977 and 2000.
Generation Z: People born after 2000 (although many analysts include people born after 1995) who make up the kids, tweens, and teens markets.
The Economic Environment
Nations vary in levels and distribution of income - such as industrieal economies, subsistence economies, and developing economies.
Economies factors that affect consumer purchasing power and spending patterns
The Natural Environment
Growing Shortage of Raw Materials (Air, food, water, and renewable and non-renewable resources.
Increased Pollution: Industry damages quality of the natural environment, through disposal and littering
Increased Government Intervention: The Government tends to pursue environmental quality by requesting social responsibility
The Political Environment
Laws, Government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
Public Policy: Free market economies require some degree of regulations for encouraging competition and ensuring fair market.
Increasing Legislation: Law covering different areas of economics, such as competition, fair trade, environment, safety, truth in advertising, are integral to business.
The Cultural Environment
Consists of institutions and other forces that affect a society's basic values, perceptions, preferences, and behaviours.
Core beliefs and values have a high degree of persistence - these include cultural diversity, democracy, sustainable development, universal healthcare, a love of nature, hard work, and being honest.
Tools to analyze the macroenvironment of the company
BCG Matrix (Boston Consulting
Group Matrix)
categorizes a company's product portfolio into four quadrants based on market growth rate and market share
aids in resource allocation and strategic decision-making for each product.
Benchmarking
comparing a company's processes, performance metrics, and strategies with those of industry leaders or competitors.
identify best practices, areas for improvement, and opportunities for innovation
micro-level analysis, it often extends to macro-level considerations
PESTLE Analysis
Examines the Political, Economic, Social, Technological, Legal, and Environmental factors that can impact an organization
Scenario Planning
considering multiple future scenarios to identify potential opportunities and threats
STEEP analysis
broadens the scope to include sustainability and ethical considerations in the analysis
Country risk analysis
Evaluates the political, economic, and social risks associated with doing business in a particular country
Demographic analysis
Examines the characteristics of a population, such as age, gender, income, education, and family structur
Cultural analysis
Considers cultural factors, including values, beliefs, customs, and lifestyles.
Global economic analysis
Examines global economic trends, such as GDP growth, inflation rates, and exchange rates.
Technology forcasting
Predicts future technological advancements and their potential impact on industries.
Global Competitiveness Index
(GCI)
GCI assesses the competitiveness of countries based on factors such as infrastructure, innovation, and macroeconomic stability
Tools to analyze the
microenvironment of the company
SWOT analysis
Evaluate internal strengths and weaknesses
Identify external opportunities and threats from suppliers, intermediaries, competitors, public, and customers.
Five Forces Analysis
examining five forces: threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products or services, and intensity of competitive rivalry
It helps identify the attractiveness and profitability of an industry.
Value chain analysis
a series of activities that a firm performs to deliver a product or service to the market
primary activities (such as production, marketing, and distribution) and support activities (like procurement and human resource management)
identify areas of competitive advantage and cost efficiency
Supplier evaluation
Assess supplier reliability and quality, considering their impact on company performance
Environmental scanning
Monitor external factors (economic, social, technological, legal, environmental) impacting the company and microenvironment
Competitor analysis
Understand competitors' strategies, strengths, and weaknesses. Differentiate offerings for a competitive advantage
Customer surveys
Gain insights into customer needs, preferences, and satisfaction. Understand public perception of products and services
Distribution channels
Evaluate effectiveness of channels. Understand role of marketing intermediaries in product promotion and distribution.
Public relations
Manage relationships with various publics to influence perceptions and enhance company image.
Customer segmentation
Identify and analyze customer markets. Tailor strategies based on needs and behaviors of different segments.