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Issues to be Considered in a
Situation Analysis
Issues to be Considered in a
Situation Analysis
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Internal, Customer, and External
Environments
Internal, Customer, and External
Environments
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Micro Environment
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Micro Environment Company: TheMarketing function must work closely with other company departments.
Finance is concern with funding and using funds to carry out marketing plan. The R& Ddepartment is concern with designing safe and attractive products. Purchasing worries about
getting supplies and materials whereas manufacturing is concerned with producing the
desired quality and quantity of products. Together all these dept has an impact on the
marketing dept plans
Suppliers: Important in the value delivery service -> rawmaterials component and parts
packaging etc. MMmust watch supply availability as supply shortages or delays, labourstrikes and other event can cause sales in the short run and damage customer satisfaction in
the long run
Distributors orMarket Intermediary: Firms that help the company distribute or sell the firms
product to final buyers. They include, Agents, retailers, wholesalers- physical distribution
firms
Customers: A company need to study its customer market closely. ConsumerMarket: Individual or household that buys g/s for personal consumption
BusinessMarkey: Businesses buys G/S for further processing or use in the production process
ResellerMarket: Buys goods and services for resale in business marker
GovernmentMarket:Made up of Government Agencies that buys g/s inorder to produce public services or transfer
the goods and services to others who need them
InternationalMarkets: Consist of buyers in other countries which includes customers, business, resellers and govt
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Competitors: Each firm must consider its own size and industry position compared to those of its
competitors. Each firm must select his own strategy that fits his/her competitive position for
instance a large firm who is the leader in market share might be the most dominant company and
may pursue dominant strategies, this might not be suitable for smaller firms who will have to select
niches to serve.
Publics:- Any group that has an actual or potential interest in or impact on the organization ability
to achieve its objective,
Financial
Govt
Media
Etc
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The Internal EnvironmentThe Internal Environment
Review of Current Objectives, Strategy andPerformance
An important input to later stages in the planningprocess
Poor or declining performance must be the result of:
Goals or objectives that are inconsistent with the customeror external environments
Flawed marketing strategy
Poor implementation
Changes in the customer or external environments that arebeyond the control of the firm
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The Internal EnvironmentThe Internal Environment
Availability of Resources
Includes a review of financial, human, andexperience resources, as well as resources from keyrelationships
Financial resources tend to get most attention
Organizational Culture and Structure
Problems can arise when marketing does not hold aprominent position in the organizational hierarchy
Culture and structure are relatively stable but can beaffected by mergers
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The Customer EnvironmentThe Customer Environment
Who are our Current and Potential
Customers?
What do Customers do with our Products?
Where do Customers Purchase our Products?
When do Customers Purchase our Products?
Why (and How) do Customers Select our
Products?
Why do Potential Customers not Purchase
our Products?
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Discussion Question
Understanding the motivations of a firms noncustomers
is often just as important as understanding its
customers. Look again at the reasons why an individualwould not purchase a firms products. How can a firm
reach out to noncustomers and successfully convert
them to customers?
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The Competitive EnvironmentThe Competitive Environment
Brand Competitors Market products with similar features and benefits to the
same customers at similar prices
Product Competitors Compete in the same product class, but with products
that are different in features, benefits, and price
Generic Competitors Market very different products that solve the same
problem or satisfy the same basic customer need Total Budget Competitors
Compete for the limited financial resources of the samecustomers
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Major Types of CompetitionMajor Types of Competition
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Stages of Competitive AnalysisStages of Competitive Analysis
Identification Identify all current and potential competitors
Characteristics Assess key competitors size, strategy, profitability, markets, etc.
Assessment Assess key competitors strengths and weaknesses
Capabilities Focus the analysis on competitors marketing capabilities
Response Estimate competitors most likely strategies and responses under different
environmental situations
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The External EnvironmentThe External Environment
Economic Growth and Stability
Political Trends
Legal and Regulatory Issues
Technological Advancements
Sociocultural Trends
Demographic trends
Lifestyle trends
Trends in cultural values
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Trends in the U.S. Sociocultural
Environment
Trends in the U.S. Sociocultural
Environment Demographic Trends
Aging of the American population
Population growth in the Sun Belt states
Increasing population diversity
Lifestyle Trends Clothing becoming more casual, especially at work
Americans have less time for leisure activities
Increasing time spent using computers
Trends in Cultural Values
Shorter attention spans and less tolerance for waiting Less focus on me-oriented values
Increasing concerns about the natural environment
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The Growing Importance of
Corporate Affairs
The Growing Importance of
Corporate Affairs Many firms have corporate affairs specialists on
staff to track emerging trends and developstrategies for dealing with external concerns.
Key Corporate Affairs Activities Corporate communication
Government relations
Investor relations
Corporate philanthropy Corporate sustainability
Policy analysis
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External Environment: PEST/ STEEPLE-
MACRO
Externalenvironment
Social andCultural
Technological
Economic andMarket
competition
Education,training andemployment
Political
Legal
Environmentalprotection
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The STEEPLE Analysis
Social and Cultural :- looks at human issues that affect behaviour. Institutionsand other forces that affect society basic values, perceptions, preferences and behaviour.
languages spoken
religions, beliefs, taboos
type of lifestyles
roles and status of females in society attitudes and opinions
population demographics
Technological Perhaps the most dramatic force that now shaping our destiny
It refers to forces that create new technologies, creating new product and market
opportunity
the pace of technology
new innovations
ability to compete/supply
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Educational environment: levels of education within population
standards of education
continuous learning
employment requirements
Economic environmentthe economic environment affect both customers and suppliers.
interest rates
unemployment levels
exchange rates
income levels
taxation policies inflation rates
gross domestic product
Political environment GovtGovt has responsibility for revenue, trade safety and security of investment
political stability
foreign policy
manifesto promises/policy
trading blocs
competition policies
trading agreements/alliances
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Legal environment statutory requirements
codes of practice trading laws
health and safety aspects
employment legislation
union issues/legislation
Environmental issues packaging
pollution and waste disposal
manufacturing methods and restrictions
presence of pressure groups
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ETHICS INMARKETING
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Ethics and Social Responsibility
inMarketing
Ethics and Social Responsibility
inMarketing Grown in importance recently due to firms
having problems in these areas: coke
Have become necessities due to:
Stakeholder demands (especially customers)
Rapid communication and 24/7 news
Improve marketing performance and profitsNIKE
Are important to the development of
marketing strategy
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Dimensions of Social
Responsibility
Dimensions of Social
Responsibility Social Responsibility
A broad concept that relates to an organizations
obligation to maximize its positive impact onsociety while minimizing its negative impact
Marketing Ethics
Principles and standards that define acceptablemarketing conduct as determined by the public,
government regulators, private interest groups,
competitors, and the firm itself
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The Pyramid of Corporate Social
Responsibility
The Pyramid of Corporate Social
Responsibility
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Social ResponsibilitySocial Responsibility
Economic responsibility of making a profit
Legal responsibility of obeying laws and
regulations
Ethical responsibility to uphold principals and
standards
Philanthropic responsibility to increase thefirms positive impact on society
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Marketing Ethics and StrategyMarketing Ethics and Strategy
Require that organizations and individuals acceptresponsibility
Can lead to violations of public trust
Involve complex and detailed decisions in gray areas
Deal with experiences and decisions made at work
Come into play anytime individuals feel manipulatedor cheated
Are intertwined with respect to a firms reputation
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Potential Ethical Issues in
Marketing
Potential Ethical Issues in
Marketing Overall Issues
Misrepresentation, manipulation, exploitation
Product Issues
Failure to disclose defects, counterfeit products Pricing Issues
Deception, price fixing, price discrimination
Distribution Issues
Opportunism, exclusive arrangements, tying contracts
Promotion Issues Bait-and-switch, misleading communication, high-pressure sales
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Challenges of Being Ethical and
Socially Responsible
Challenges of Being Ethical and
Socially Responsible Business decisions involve complex decisions
in which correctness may not be apparent
Internet privacy, copyright, intellectual property,advertising claims
Ethical conflict may emerge from aninconsistency between personal values and
the values held by members of the workgroup
Ethical issues can develop into legal problems
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Types ofMisconduct Observed
in Organizations
Types ofMisconduct Observed
in Organizations
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Deceptive Practices in
Marketing
Deceptive Practices in
Marketing
Deceptive Communication and Promotion Fraud or any false communication
Exaggerated claims or statements
Ambiguous statements
Product labeling issues
Selling abuses
Regulating DeceptiveMarketing Practices Typically regulated by:
The firms themselves
Industry and trade associations (such as the BBB)
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Organizational Determinants of
Ethics and Social Responsibility
Organizational Determinants of
Ethics and Social Responsibility Ethical DecisionMaking
Determined by an individuals background and
business colleagues Affected by personal values, opportunity for
unethical behavior, and exposure to others
Intricately tied to the firms culture and ethical
climate Can only be improved by planning and structure
Likely to occur when modeled by a strong leader
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Ethical ClimateEthical Climate
Part of a corporate culture that relates to an
organizations expectations about
appropriate conduct The character component of an organization
Sets the tone for ethical decisions
Determines whether an individual perceives anissue to be an ethical issue
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Codes of ConductCodes of Conduct
Code of Conduct (Code of Ethics)
Formal statement that describes what an
organization expects of its employees Not an effective means of controlling ethical
behavior unless integrated into daily decision making
Not effective unless the code has support of top
management Code must reflect managements desire for
compliance with values, rules, and policies
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Codes of Conduct (continued)Codes of Conduct (continued)
Code should have six core values Trustworthiness Respect
Responsibility Fairness Caring Citizenship
Code will not resolve every issue encountered indaily operations
Code can help managers deal with ethicaldilemmas
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Considerations in Developing a
Code of Conduct
Considerations in Developing a
Code of Conduct
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Texas Instruments
Ethics Quick Test
Texas Instruments
Ethics Quick Test Is the action legal?
Does it comply with our values?
If you do it, will you feel bad?
How will it look in the newspaper?
If you know its wrong, dont do it!
If youre not sure, ask.
Keep asking until you get an answer.
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Marketing Ethics and LeadershipMarketing Ethics and Leadership
Ethical cultures emerge from strong leadership.
Employees look to the leader as a model of
acceptable behavior. Great ethical leaders:
Create a common goal or vision for the company
Obtain buy-in or support from significant partners
Motivate others to be ethical
Use the resources that are available to them
Enjoy their jobs and approach them with an almostcontagious tenacity, passion, and commitment
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Market OrientationMarket Orientation
Market Orientation
The development of an organizational culture
that effectively and efficiently promotes thenecessary behaviors for the creation of superior
value for buyers and, thus, continuous superior
performance of the firm
Strongly tied to ethics and social responsibility
Means fostering a sense of cooperation and
information exchange
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Stakeholder OrientationStakeholder Orientation
Stakeholder Orientation
The degree to which a firm understands andaddresses stakeholder demands
Strongly tied to ethics and social responsibility
Comprised of three activities
Organization-wide generation of data about stakeholdergroups and the assessment of the firms effects on these
groups Distribution of this information throughout the firm
The organizations responsiveness as a whole to thisintelligence
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Connecting Ethics and Social
Responsibility to Performance
Connecting Ethics and Social
Responsibility to Performance Strong ethics and social responsibility leads
employees to be:
Motivated to serve customers
Committed to the firm
Committed to high quality standards
Satisfied with their job
Can lead to trust among firms stakeholders
Often leads to higher customer loyalty
Is so important that firms can experience majornegative effects if they dont uphold ethical standards
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GreenMarketing Philosophy
Firms too have become more green in their
business methods, particularly production and
other operational methods. They have also
become more green in terms of the
packaging used on their products, and of
course in terms of the products and services
themselves.
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A firm that practices green marketing may go
on the extreme of environmentally friendly,
not tested on animals, ethically, non
exploitatively produced cosmetic and related
products.
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Many firms are now adopting a proactive
rather than reactive green marketing
strategy in an attempt to gain a competitive
business environment.
If the market wants, and is prepared to pay
for, green products and services then
marketing-orientated firms are duty bound tofind ways of offering such goods and services
to their customers
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Marketing Audit
Definition: pg 39
The role of the external auditor
5 Components to be included in the market audit pg 39 Environmental audit
Strategy Audit
Organizational audit
Systems audit
Productivity audit
Function audit
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Challenges of audit
Funding
Defining purpose and objective
Support Time
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SWOT AnalysisSWOT Analysis
A widely used framework for organizing and
utilizing the pieces of data and information
gained from the situation analysis Encompasses both internal and external
environments
One of the most effective tools in the analysisof environmental data and information
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SWOT is an analytical tool used by an organisation to evaluate various
aspects of its internal operations and to evaluate different aspect of theexternal environment.
S = strengths (internal and could be such as strong brands, experienced
management
W = Weaknesses (internal) such as aging production facilities, small marketshare
O = Opportunities (external) emerging markets, new technology
T = Threats (external) new competitors, changing markets
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Major Benefits and Criticisms of
SWOT Analysis
Major Benefits and Criticisms of
SWOT Analysis Benefits of SWOT Analysis
Simplicity
Lower costs
Flexibility Integration and synthesis
Collaboration
Common Criticisms of SWOT Analysis Allows firms to create lists without serious
consideration of the issues
Often becomes a sterile academic exercise ofclassifying data and information
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Breaking DownManagerial
Clichs
Breaking DownManagerial
Clichs
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Potential Issues to Consider in a
SWOT Analysis (Exhibit 5.4)
Potential Issues to Consider in a
SWOT Analysis (Exhibit 5.4) Strengths and Weaknesses
Presence or absence of scale and cost economies
Presence or absence of financial or human resources
Presence or absence of functional skills
Presence or absence of intellectual, legal or reputational resources
Opportunities and Threats
Conditions or changes in the customer environment
Conditions or changes in the competitive environment
Conditions or changes in the external environment
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Strength and weakness
Human resource development Employee age/education
Turnover, satisfaction,absenteeism
Production Location
Machinery obsolesce
Purchase system
Quality control
Production efficiency
Management and Organization Management Quality
Staff Quality
Degree of centralization
Planning, Information andcontrol
Research and Development Lab capabilities
Research programs
Tech. innov
Marketing Distribution
Market share
Advertising
Customer satisfaction
Product quality
Reputation
Sales force turnover
Finance Profit margin
Credit rating
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The SWOTMatrix (Exhibit 5.5)The SWOTMatrix (Exhibit 5.5)
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Quantitative Assessment of
the SWOTMatrix
Quantitative Assessment of
the SWOTMatrix