Meaning of Marketing Environment Why Scan the Environment - 7700 Words

Meaning of the Marketing Environment: Why Scan the Environment? (Coursework Sample) Content: ANALYZING THE MARKETING ENVIRONMENTIntroductionExcellent companies take an outside-in approach to their business operations.These companies monitor the changing environment and continuously adapt their businesses to their best opportunitiesCompany managers are faced with the responsibility of identifying major changes in the environment.In this chapter, the major forces in the companys marketing environment are discussed.Meaning of the Marketing EnvironmentA companys marketing environment consists of factors that affect its ability to develop and maintain successful transactions and relationships with its target customers.The factors and forces that affect a companys ability to operate effectively in providing products and service to its customers.Note: The process of analyzing the environment is also known as environmental scanning.Why Scan the Environment?Environmental scanning is important to a company for a number of reasonsTo identify threats arising from the env ironment. A threat could be:A new competitor in a firms market.Price wars with competitorsA competitor who has a new, innovative product or serviceTaxation introduced or increased on a firms products or services.Identify opportunities arising from the environment and exploiting them to firms advantage. Opportunities could be:A developing market such as the internetMergers, joint venture or strategic alliancesA new international marketA market vacated by an ineffective competitor.To identify a firms weaknesses. These are the lack of or inaccuracy of the firms resources that should be converted into strengths. A weakness could be:Lack of marketing expertisePoor quality goods and servicesUndifferentiated products and servicesTo identify a firms strengths. These are capabilities/ bundle of assets and skills that can be used to exploit opportunities, combat threats and overcome weakness. A strength could be:Your specialist marketing expertiseQuality productsNew innovative products or ser vices.To develop strategies that can enable a company to cope with the ever changing environmentComponents of the marketing EnvironmentThe marketing environment can be divided into two components namely:The micro-environmentThe macro-environmentThe micro-EnvironmentThis can be subdividing into two;The internal environmentThe external environmentThe internal environmentThis consists of those forces within the company, i.e. firms capabilities or bundle of assets and skills possessed by the company. They include:Marketing programmes Financial resourcesResearch and developmentPurchasingManufacturing, etcThese reveal a firms strengths and weaknesses.The external environmentThese consist of the actors and forces in the companys immediate environment that affects its ability to serve its markets. Such force include the companysSuppliersMarketing intermediariesCustomersCompetition andThe publicsThese comprise the core marketing system of the company in its efforts to meet its primary goal o f profitability and customers satisfaction.The Macro-EnvironmentThis consists of the larger societal forces that affect a companys micro-environment.They include:-The demographic environmentEconomic environmentThe physical environmentTechnological environmentPolitical / legal environmentThe socio-cultural forces/environment.These force represent the uncontrollable marketing variables that the company must monitor and respond to The Macro and the external Micro-Environment both pose threats and spin opportunities from the environment. EXTERNAL MICRO-ENVIROMENTAL FACTORSTHE SUPPLIERSThese are business firms and individuals who provide resources needed by the company to produce goods and services.Companies mustDevelop specificationSearch for suppliersQualify them and Choose those who offer the best mix ofqualitydelivery reliabilitycreditwarranties andLow costs.Developments in the suppliers environment can have a substantial impact on a companys marketing operations.Marketing managers n eed to watchi) The price trends of their key inputsii) Supply availability i.e. continuity Marketing managers should avoid over relying on one supplier.MARKETING INTERMEDIARIESThese are firms that aid a company in promoting, selling and distribution of its goods and services to the final buyers. They include:MiddlemenPhysical distribution firmsMarketing service agenciesFinancial intermediariesMiddlemenThey are business firms that help the company to sell its goods/services to the final buyers; for example i) Merchant middlemen wholesaler and retailers ii) Agent middlemen brokers, sales representativesPhysical distribution firmsThese firms assist the company in stocking and moving goods from their original location to their destinations. For exampleWarehousing firmsTransportation firmsEvery company looks for the most effective modes of transportation balancing such consideration ascostdeliveryspeed and safetyMarketing service agenciesExamples here include:-marketing research firmsa dvertising agenciesmedia firmsmarketing consulting firmsThey assist the company in targeting and promoting its products to right market.Financial intermediariesThese includebanks credit companiesinsurance companiesThese intermediaries provide financial assistance or insure risk associated with buying and selling of products to companies or marketing organizations.CUSTOMERSThese are the people that the company sells their goods to also known as the target market. Five types of customers markets exist, namely:-Consumer markets individuals and households that buy goods and service for personal consumptionIndustrial markets Organizations that buy goods and service needed for producing other products and services for the purpose of making profits and / or achieving other objectivesReseller markets Organizations that buy goods and service for the purpose of reselling them at a profit.Government and non profits markets they buy goods and service in order to provide public services or t o transfer these goods and service to others who need them.International markets buyers found abroad including foreign customers, producers, resellers and governments.Examples include:BanksPersonal customers marketsTrust department marketsBusiness customersProfit customers high earner members e.g. estate agents and stock brokersImporters and expositors.NBEach customer group exhibits specific characteristics that warrant careful study by the seller.COMPETITORSA company rarely stands alone in its efforts to service a given market. It is surrounded and affected by a host of competitors. The competitors have to be identified, monitored and outmaneuvered to capture and maintain customer loyalty.PUBLICSA public is a group that has actual or potential interest in or impact on a companys ability to achieve its objectivesA public can facilitate or impede a companys ability to achieve its goals. The wise company takes concrete steps to manage successful relations with its key publics.Every company faces several important publicsFinancial publics financial institutions affect the companys ability to obtain funds. Examples of financial instruction include banks, investments houses, stock broker firms and insurance companies.Media publics companies must activate the goodwill of media organizations, such as newspapers, magazines, radio and television stations in order to set more and better media coverage in the form of favorable news features and editorial commentsGovernment publics companies need to take government developments into account in formulation of marketing plansCitizen action public/ lobby groups / pressure groups companys market practices may be questioned by consumer organizations, environmental groups, minority groups, etc.Local publics every company faces local publics for example neighborhood residents and community organizations. Companies must deal with community issues, attend meetings, answer questions, and make contribution to worthwhile cause s.General public A company needs to be concerned with the general publics attitude toward its products and practices. The public image of the company affects its patronage.Internal publics a companys internal publics include blue collar workers, while collar workers, managers etc. companies should spend time monitoring all its publics, understanding their needs and opinions and dealing with them constructively. THE MACRO-ENVIRONMENTThe Demographic Environment- This refers to the study of population. The environment is important in crafting marketing strategy. The variables to consider include: