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Marketing Environment and Strategic Planning

Marketing Environment and Strategic Planning. Marketers constantly monitor crucial trends and developments in the business environment. There are two key perspectives on the marketing environment, namely the microenvironment , and the macroenvironment.

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Marketing Environment and Strategic Planning

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  1. Marketing Environment and Strategic Planning • Marketers constantly monitor crucial trends and developments in the business environment • There are two key perspectives on the marketing environment, namely the microenvironment, and the macroenvironment

  2. Marketing Environment and Strategic Planning microenvironment • This environment influences the organization directly. • Microtends to suggest small, but this can be misleading. • In this context, micro describes the relationship between firms and the driving forces that control this relationship

  3. microenvironment Microenvironment Factors

  4. microenvironment • Customers • Organizations owe much from their customers. They survive on the basis of meeting the needs, wants and providing benefits for their customers. If they do not develop customer loyalty and satisfaction, they could lose their customers.  • Employees • Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organization. Training and development may be expensive but very important not only for the employee but for the company as well.

  5. microenvironment • Suppliers • Closer supplier relationship is one way of ensuring competitive and quality products for an organization.  • Shareholders • Businesses have responsibilities even towards its shareholders. To satisfy their shareholders, they have to create shareholder wealth and maximize shareholder value.

  6. microenvironment • Media • Positive or adverse media attention on an organization’s product or service can, in some cases, make or break an organization. • Competitors • The name of the game in marketing is differentiation. What can the organization offer which is better than their competitors?

  7. microenvironment • Media • Positive or adverse media attention on an organization’s product or service can, in some cases, make or break an organization. • Competitors • The name of the game in marketing is differentiation. What can the organization offer which is better than their competitors?

  8. Marketing Environment and Strategic Planning macroenvironment • factors that can influence and organization, but that are out of their direct control. • refers to all forces that are part of the larger society and affect the microenvironment. • includes the economic, socio-cultural, political/legal, technological, and the natural environment.

  9. Marketing Environment and Strategic Planning

  10. macroenvironment • Economic Environment • GNP, GDP, • purchasing power of the market, • business cycle, • foreign exchange, • employment and unemployment rates, and • other measures of economic performance. • The overall health of the economy influences how much consumers spend and what they buy.

  11. macroenvironment • Economic Environment • Gross National Product (GNP) is the total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens minus income of non-residents located in the country. • GNP measures the value of goods and services that the country's citizens produced regardless of their location. GNP is one measure of the economic condition of a country, under the assumption that a higher GNP leads to a higher quality of living, all other things being equal.

  12. macroenvironment • Economic Environment • In other words, it is an estimate of the total money value of all the final goods and services produced in a given one-year period by the factors of production owned by a particular country's residents. • "Final" goods and services means goods and services sold or otherwise provided to their final consumers -- that is, to avoid double counting, the value of steel sold to GM to make a car is not added separately into the GNP or GDP totals because its value is already included when we add in the final sales price of the car to the customer.

  13. macroenvironment • Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time. • GDPper capita is often considered an indicator of a country's standard of living.[2][3] • GDP is related to national accounts, a subject in macroeconomics. GDP is not to be confused with gross national product(GNP) which allocates production based on ownership.

  14. macroenvironment • Socio-Cultural Environment. • education, • customs and traditions, • religion, • values, and • other factors that pertain to people and their culture. • To remain competitive, marketers must be sensitive to society’s demographic shifts and changing values.

  15. macroenvironment • Political / Legal Environment. • legislation regulating businesses, • relevant laws, • political stability, • peace and order situation, and • other factors that pertain to government and law. • Ignoranceof laws, ordinances, and regulations or noncompliance with them can result in fines, negative publicity, and expensive damage suits.

  16. macroenvironment • Technological Environment. • new invention and discoveries, • technological breakthroughs, • R&D activity, • automation, • technology incentives, • the rate of technological change, etc. • Technology leads to new goods and services for consumers; it also improves existing products, offers better customer service, and often reduces prices through new, cost-efficient production and distribution methods.

  17. macroenvironment • Natural Environment • natural disasters and calamities, • natural hazards, etc. • ecological issues • green marketing – production, promotion, and reclamation of environmentally sensitive products.

  18. macroenvironment • Natural Environment • natural disasters and calamities, • natural hazards, etc. • ecological issues • green marketing – production, promotion, and reclamation of environmentally sensitive products.

  19. Marketing Environment and Strategic Planning Marketing Planning • processthat yields decisions in how a business unit can best compete in the markets it elects to serve. • strategic plan is based upon the totality of the marketing process • (http://marketing.about.com/od/marketingglossary/g/stratplandef.htm).

  20. Marketing Environment and Strategic Planning Marketing Planning • process begins at the corporate level • with the definition of a firm’s mission. • determines its objectives, • assessesits resources, and • evaluatesenvironmental risks and opportunities.

  21. Marketing Environment and Strategic Planning Marketing Planning process

  22. Marketing Environment and Strategic Planning Successful Strategies: Tools and Techniques • Porter’s Five Forces Model. Michael Porter defined the forces which drive competition, contending that the competitive environment is created by the interaction of five different forces acting on a business: • rivalryamong existingfirms; • threatof new entrants into the market, • forces of supplier power; • power of the buyers, and • the threat of substitute products or services. • Porter suggested that the intensity of competition is determined by the relative strengths of these forces • (http://university-essays.tripod.com/porters_5_forces_analysis.html). Understanding the nature of each of these forces gives organizations the necessary insights to enable them to formulate the appropriate strategies to be successful in their market (Thurlby, 1998).

  23. Marketing Environment and Strategic Planning Successful Strategies: Tools and Techniques Porter’s Five Forces Model.

  24. Marketing Environment and Strategic Planning Successful Strategies: Tools and Techniques • SWOT Analysis • tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. This provides managers with a critical view of the organization’s internal and external environments and helps them evaluate the firm’s fulfillment of its mission. • SWOT stands for strengths, weaknesses, opportunities, and threats. • Strengths and weaknesses are internal factors. • Opportunities and threats are external factors.

  25. Marketing Environment and Strategic Planning Successful Strategies: Tools and Techniques SWOT Analysis of Starbucks (http://marketingteacher.com/swot/starbucks-swot.html) Strengths Starbucks Corporation is a very profitable organization, earning in excess of $600 million in 2004.The company generated revenue of more than $5000 million in the same year. It is a global coffee brand built upon a reputation for fine products and services. It has almost 9000 cafes in almost 40 countries. Starbucks was one of the Fortune Top 100 Companies to Work For in 2005. The company is a respected employer that values its workforce. The organization has strong ethical values and an ethical mission statement as follows, 'Starbucks is committed to a role of environmental leadership in all facets of our business.'

  26. Marketing Environment and Strategic Planning Successful Strategies: Tools and Techniques SWOT Analysis of Starbucks (http://marketingteacher.com/swot/starbucks-swot.html) Weaknesses • they remain vulnerable to the possibility that their innovation may falter over time. • The organization has a strong presence in the United States of America with more than three quarters of their cafes located in the home market. It is often argued that they need to look for a portfolio of countries, in order to spread business risk. • The organization is dependent on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise.

  27. Marketing Environment and Strategic Planning Successful Strategies: Tools and Techniques SWOT Analysis of Starbucks (http://marketingteacher.com/swot/starbucks-swot.html) Opportunities Starbucks are very good at taking advantage of opportunities. In 2004 the company created a CD-burning service in their Santa Monica (California USA) cafe with Hewlett Packard, where customers create their own music CD. New products and services that can be retailed in their cafes, such as Fair Trade products. The company has the opportunity to expand its global operations. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge. Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential.

  28. Marketing Environment and Strategic Planning Successful Strategies: Tools and Techniques SWOT Analysis of Starbucks (http://marketingteacher.com/swot/starbucks-swot.html) • Threats • Who knows if the market for coffee will grow and stay in favor with customers, or whether another type of beverage or leisure activity will replace coffee in the future? • Starbucks are exposed to rises in the cost of coffee and dairy products. • Since its conception in Pike Place Market, Seattle in 1971, Starbucks' success has lead to the market entry of many competitors and copy cat brands that pose potential threats.

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