150447360 Marketing Principles

7/27/2019 150447360 Marketing Principles

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Understanding the Macroand Micro Environment

See Past Exam Papers for SampleQuestions

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Learning outcomes

Elements of the marketing environment

Macro and Micro environmental analysis

Understanding Consumer BuyerBehaviour

Understanding Industrial Buyer Behaviour

Defining and analysing competitive forces


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The Macro

Marketing

Environment

Copyright: SouthwesternPublications 2006


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1. The Competitive Environment

Competitive EnvironmentCompetitive Environment:competitive products, substituteproducts for one another, companies

competing for your consumerspurchasing power.Monopoly examples in Ireland?

Deregulation movement - exOligopoly - ex


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DirectCompetitiveProducts

Which would you

buy?


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Indirectly Competitive Products

products than can be substituted forone another

Plastic Containers vs. Glass vs. Tin vs.Aluminum

Sugar vs. Artificial Sweeteners Typewriter vs. PC

Ocean Liner Vs. Air Travel


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Developing a CompetitiveDeveloping a Competitive

StrategyStrategyShould we compete?

If so, in what markets should wecompete?

How should we compete?

Involves:Researching the market

Identifying current &potentialcompetitors

Anticipating competitive actions


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2. Political-Legal Environment

Component of the marketingenvironment consisting of laws andinterpretations of laws that require

firms to operate under competitiveconditions and to protect consumerrights.


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Deregulation

IncreasesCompetitiveness


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Regulatory Forces

Government :Consumer SafetyCommission, IFSRA,Environmental

Protection Agency,Health and Safety etc

Consumer interestgroups

PETA

Special-interest groups ISME

Self-regulatory groups Advertising

Companies fightunjust regulations

Regulations canpresent new

opportunities Political lobbying

Boycotts

Political actioncommittees

Controlling the PL

Environment

Is Horticulture industry regulated?

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3. The Economic Environment

Factors influencing consumer buyingpower and strategies (stage of thebusiness cycle, inflation,

unemployment, resources, incomeetc)

The Wealth effect (Ireland)


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The figures on the map show the level of

average new car prices in each market

compared to the average for all euro currency

markets. Index 100 represents the Europeanaverage

Source: Fact

Finders 2006

Fastest Growing Market for

New Car Eastern Europe

(Latvia 49% increase on 2005)

During prosperous times carmanufacturers will add luxury

extras

The Wealth

Effect


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Inflation and DeflationInflation and Deflation

Inflation: The devaluation of money byreducing what it can buy throughcontinued price increases. (Ireland)

Deflation: Falling prices

* Lowest annual EU rates: Netherlands

(3.0%/1.9%), Portugal(3.1%/-1.2%),Ireland(3%/-2.4%). Highest rates: Latvia (15.6%/7.7%),

Lithuania (12.2%/6.9%).


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UnemploymentUnemployment

The proportionof people in

the economywho do nothave jobs andare activelylooking forwork.


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IncomeIncomeDiscretionary income: the amount of

money people have to spend after

paying bills and necessities.

Resource AvailabilityResource AvailabilityDemarketing: reducing consumer

demand for a good or service to a levelthat the firm can supply.


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4. The Technological Environment

The technologicalenvironment:application of

knowledge inscience,inventions, andinnovations to

solve problems


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Toyota PriusHeating

Technologies

Technology Advances Consumer Needs


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Technology increases exponentially

New technology as a key to long-termcompetitive advantage

create more efficient operation or betterproducts

may render existing products obsolete

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5. The Social-Cultural Environment

The relationshipbetween marketingand society and its

culture

Issues:

Obesity inChildren

Negative Body

Images Video Games

Healthy Eatingetc ..


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Cultural Environment: Elements of

Culture

1. Language

2. Manners & Customs

3. Technology & Material Culture

4. Social Institutions business, family,political- Latin America

5. Education transmitting values, skills,attitudes etc

6. Aesthetics attitude toward beauty, art,music etc

7. Religion

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Worlds Religions

Christianity - 2.0 billion followers

Islam - 1.2 billion followers

Hinduism - 860 million followers

Buddhism - 360 million followers

Confucianism - 150 million followers

Religion can affect marketing strategy


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Social Environment: Role of Families

and Working Women

Working women has had a greater effecton marketing than any other social change

Increases in females in the workforce

Purchasing power from dual-careerfamiliesis rising

Cost is more important to women.Quality is more important to men.

2


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Population Considerations

Concerned with the study of the quantifiableaspects of population structures,e.g., age,gender, size, race, occupation and location.

Some factors to consider: falling birth-rates

the rise of the mature market segment

the household of one


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Demographic Factors

3

Generation Y: Born between 1979 and1994, size = marketing impact, fickle andskeptical group, technos

Generation X: Born between 1965 and1978, time premium, majority havechildren and houses, savvy and cynicalconsumers

Baby Boomers: Born between 1946 and1964

Younger Boomers (ages 41 to 49)Home is the castle, spend on kids

Older Boomers (ages 50 to 59)

Spend on home upgrades & Holidays


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Growing Ethnic and Community

Markets

Irish population is becoming multiculturalsociety and workforce

Growth in spending power in: Eastern European PopulationsAfrican PopulationsAsian Populations

4

PinkPound

-Dorothy

Dollar


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6. Natural Forces

Conserve natural habitats,resources, endangered species

Minimise environmental impact Sustainable resource use

Recycle

Energy efficient productsThe Polluter Pays Principle


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The Micro Environment

Customers: needs, wants and providing benefits fortheir customers. Failure = failed business strategy.

Employees: correct and motivated staff is essential tostrategic planning. Training and development, service

sector, competitive edge. (Cereality) Suppliers: Price of raw material affect the marketing

mix. Closer supplier relationships benefit strategy. Shareholders: inward investment for growth.

Satisfying shareholder needs can cause a change in

strategy. (Sharwoods+internet companies, Birds Eye) Media: Positive or adverse attention. Consumer

programs


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Consumer Buyer Behaviour

Chapter 5 of book Talk about 3 consumer roles Consumer is a

user, a payer and a buyer;

User concerned about product features and theuses they can be put to (JML ads on TV)Payer concerned about price and credit dealsavailable (0% down, 0% until)Buyers concerned with logistics of procuring the

product (order by certain date for deliverybefore)


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Consumer Buyer Behaviour

Consumer Needs & Wants

Needs are unsatisfactory conditions of theconsumer that prompt them to an action that willmake the condition better

Wants are desires to obtain more satisfactionthan is absolutely necessary

Food vs. Gourmet Food, Car vs. Porsche etc


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Consumer Behaviour-Psychology

The perception of a consumer about a certainservice/product is what matters.

Learning also features in consumer behaviour.Especially for a complex purchase.

Motivation is defined as a state of drive thatimpels behaviour towards a goal-object.

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Maslows Hierarchy of Needs

Abraham Maslow described motivation as ameans of satisfying human needs.

1. Physiological Needs Food, shelter

2. Safety & Security Needs car safety, fire safety

3. Belongingness & Love Needs Teenagers clothes

4. Esteem & Ego Needs Self Gift Giving

5. Need for Self Actualization Engage in self

improvement activities


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Psychographics:Describing Consumer

Behaviour

Psychographics is a facet of motivation andexplains how a person acts during theconsumption phase.

The way they act is guided by a persons:ValuesSelf ConceptLifestyleVALS values & Lifestyles

Attitudes


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Individual Consumer Decision Making process

Step 1: Problem Recognition Step 2: Information Search Step 3: Alternative Evaluation

Step 4: Purchase Step 5: Post purchase Experience

Chap 5 of Book


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Industrial Buyer Behaviour

Who says that you will always market to anindividual??

The decision-making process by which formal

organisations establish the need for purchasedproducts and services, and identify, evaluate, andchoose among alternative brands and suppliers

Kotler and Armstrong 1989


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Industrial Buyer Behaviour

The process can be summarised as follows

- Problem Recognition- Need Description

- Product Specification- Supplier Search

- Supplier Selection - Purchase Routine Specification - Performance Review


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Analyzing Competitive Forces

Check Chapter 4 of Book, from pg 117

Competitor ResearchAuditing Current Competitors

Auditing Potential New Competitors

See in chapter 4 a competitor Analysis Template

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150447360 Marketing Principles

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