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Environmental Analysis

Environmental Analysis. Charles Blankson, Ph.D., Department of Marketing & Logistics. Marketing Environment.

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Environmental Analysis

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  1. Environmental Analysis Charles Blankson, Ph.D., Department of Marketing & Logistics

  2. Marketing Environment • “…Actors and forces outside marketing that affect marketing management’s/strategy planning’s ability to develop and maintain successful transactions/relationships with its target audience(s)…” • Kotler and Armstrong (2005).

  3. Microenvironment • The actors/forces close to the company that affects its ability to serve its customers. They include: the company, suppliers, marketing intermediaries such as retailers, distributors, agents; customer markets (other customer segments), competitors and publics.

  4. Micro-environmental analysis • Industry/Market analysis: monopoly, oligopoly, duopoly, perfect competition. • Competitor analysis: number of competitors, customer-oriented, self-centered, competitor-centered, market driven. • Customer analysis: the buying behavior (individual or organizations), consumption patterns, who is who?, what, how, where, when, why, who buys our offerings?

  5. Macroenvironment • The larger societal forces that affect the microenvironment. They include demographics, economic, technological, political, cultural and natural forces.

  6. An Example of demographic force/actor that can affect a firm’s marketing strategies/management • There are seven US Generations that may be appreciated by the marketer: • GI Generation, 74 years+ old (9.1%). • Depression, 64-73 yrs old (6.5%). • War babies, 58-63 yrs old (5.7%). • Baby boomers, 39-57 yrs old (28.2%). • Generation X, 27-38 yrs old (16.4%). • Generation Y, 9-26 yrs old (25.8%).

  7. Macro-environmental analysis • Political • Economic • Social • Technological • Legal • Environmental

  8. Political & Economic factors • Political factors: • International • National/domestic or local. • Economic factors: • Long term • Short term

  9. PESTLE analysis contd. • Social factors • Technological factors • Legal factors • Environmental factors. • Others: Cultural, ethics, educational, rule of law, natural resources, demographic, immigration/migration.

  10. QUEST (Quick Environmental Scanning Technique) • “…a future research process designed to permit executives and strategic planners in an organization to share their views about trends and events in future external environments that have critical implications for the organization’s strategies and policies…”. • Nanus (1982, quoted in Baker, 1998).

  11. Implementation of QUEST • Review current environmental condition. • Explain purpose and methodology. • Review “futures” literature to stimulate thinking. • Define scope and boundaries for discussion – for stakeholders, performance. • Identify key issues in the environmental analysis. • Select agreed list. • Assess probability of occurrence.

  12. Some pertinent references • Connor, Paul (1999), “In Sickness and in Health: Exploring and Redeveloping a Measure of Marketing Effectiveness”, Journal of Marketing Management, Vol.15, No.8, pp.733-756. • Clark, Bruce (1999), “Marketing Performance Measures: History and Interrelationships”, Journal of Marketing Management, Vol.15,No.8, pp.711-732.

  13. Importance of Environmental Analysis • Increased general awareness by management of environmental change(s). • Better strategic planning and decision making. • Greater effectiveness in dealing with the publics (e.g., local, national, international governments). • Understanding and appreciation of changes in the industry and market, e.g., is it a growing industry? changes in consumer decision making etc. • Appreciation of diversification, acquisitions, resource allocation, foreign business. • Effectiveness in assessing PLC, NPD, firm’s SWOT and marketing planning.

  14. Important announcement • Please read around the topic in your textbook in Chapter 3 & 4 as a back up to the preceding presentation and discussion.

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