Assessing the Marketing Environment

The MACRO Environment Identifies and measures the non-controllable elements of the environment that organisation must assess. Organisations are assessing the trends in change as they might impact on them MACRO environment is dynamic, it is always changing PESTLE factors are the ones we are analysing

The Social Environment Demography – How fast/slow is the population growing? – Is it an aging population? What is the ethnic make up? Level of immigration? – How is it changing? Social Change – Divorce rates? Single parent and single families? – Working women? Rise in wealth of women? ‘New’ family units. – Impact of ‘new’ ethnic groups

The Social Environment Culture – What are the core values in Society? What is their source? – Religion and thinkers are key to culture – Education, language, Aesthetics. – Family background, sub-cultures, reference groups Social responsibility – As a society we are becoming more concerned with business behaving in an ethical manner and looking after the environment

The Economic Environment Economic indicators – Interest rates – Inflation – Growth (GDP) – Unemployment – International trade (surplus) – Personal debt – Exchange rates – The Business (Economic) cycle

The Political Environment Governments – Pass laws – Set levels of tax – Shape behavioural standards, for example laws about smoking – Control the public sector – Take responsibility for International Trade

The Legal Environment Government legislate – Consumer protection laws – Health and safety – Laws to protect intangible property Patents Trademarks

The Natural Environment Environmental factors the public are concerned about – Reducing fossil fuel consumption – Re-cycling – Sustainable sources – Help workers down the supply chain – Ethical business behaviour

The Technological Environment The speed as which new technology diffuses The impact of technology on social change The Internet (how do companies use it?) Technology impacts on our effectiveness and efficiency at work

Corporate and Social Responsibility Organisations accountability to society – Social values, consumers want to know more about the sources of their products – Fair trade – Cause related marketing

The MICRO Environment Individuals and organisations that directly or indirectly impact on an organisation. They include: – Customers – Suppliers – Distributors – Shareholders – Competitors – Interest groups

Customers How have/do their requirements change over time? How do the MACRO environmental changes impact on customers? How do suppliers products impact on customer? Is the product/service always on time? Happy employees makes for happy customers

Competitors In the UK there are many laws to stop unfair competition. In particular mergers of large companies are strictly controlled Anti-competitive agreements are prohibited Trade bodies exist to enforce standards Various regional trading bodies World trade organisation

Analysing Competitors We need to know: – What the competitor says about itself – What people say about them – Their Strengths and Weakness – Their tactics – Their product/service offering – How our company compares

The Internal Environment It is about understanding what the company is capable of and what it does best (core competencies). They come in various forms in the UK: – Sole trader – Partnerships – Limited company – Francises

Internal Culture Motivating staff Rewarding staff The degree of formality at work How should staff behave Degree and expectations of team working Structure and control inn the organisation

Corporate and Social Responsibility at the Business Level Should business be responsible? Two views – No, business is only about making a profit so other people can spend money on social issues – Yes, business is responsible for all its stakeholders whether they directly generate income or not

Organisational Strengths and Weaknesses Organisations are constrained by all the actors in their environment. However with globalisation new markets opens up. Challenge for business in this new world order is to either: – Standardise or adapt their products and services for different markets – Are you a niche or mass marketer?

Measurement Methods Qualitative – Soft data and opinion – Can help understand the reasons why Quantitative – Hard data and measurement – Mathematical models – Can help understand the what

Organisational Objectives Objectives are hierarchical and should be SMART – Organisation mission and purpose – Organisation aims – Organisation objectives – Marketing objectives

Auditing Tools Internal (5M’s) – Money, Manpower, Marketing, Materials, Machinery MICRO – Porters 5 Forces for structure of competition MACRO – PEST, PESTLE

SWOT Pulls together the strands of the analysis – Strengths-what the organisation is good at – Weaknesses-Internal areas to improve – Opportunities-external factors that can help the organisation improve – Threats-external factors beyond the organisations control that could put it at risk