Lecture 2- Marketing Environment

Lecture 2- Marketing Environment

1. Marketing Environment

   • the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers

2. Marketing Mytopia

   • term that depicts business failing due to being short-sighted and too stubborn to change and adapt
   • this belief leads to complacency and a loss of sight of what customers want
   • a human activity directed at satisfying needs and wants through the exchange processes - Kotler and Armstrong, 2008
   • Customers need and want change, this is called INNOVATION
   • competitors erode the market share and the environment makes old ideas redundant
   • 'a failure to see ahead'- Theodore Levitt, 1960
   • Railways are an example as they lost out to the aircraft industry when it came to long distance travel, therefore, they redefined their business in terms of trains/rail instead of long distance transport

3. Political

   • Competition Policy- monipolies and mergers such as Asda and Walmart, or Morrisons and Segwat
   • Environmental protection through political policies- pollution control, planning regulations, recycling, CSR
   • Consumer Protection eg financial services, weights and measures, cigarette labeling and promotion
     • eg horsemeat scandal in Tesco burgers, led to apologies in UK papers
     • UK age for cigarettes went from 16 to 18

4. Economic

   • Economic Conditions- the growth and decline of demand (includes taxes and interest rates)
   • intensity of competition- number of competition, nature of the product, ease of market entry, saturation of market
   • Financial institutions often merge due to economic rush as it leads to less competition

5. Social

   • changing lifestyle, values and attitudes that companies need to adapt to
     • health trends (food, gym, holidays, hotels)
     • ethical trends (products, packaging, anti-animal testing)
     • working hours, more working women
   • Structure and dynamics of individuals and groups, demographics
     • ageing population, health care, life insurance
     • youth culture
     • increased ethnic diversity
     • change in household structures

6. Technology

   • Information Technology (IT)
     • internet trading/banking (cheaper than branch based)
     • stock control systems, allows them to keep record of the stock easier and more accurate
     • loyalty card data- means that organizations can track buying habits of customers and target them more with specific products, and can offer promotion
   • Communication
     • new technology allows easier communication eg internet, skype

7. Environmental

   • CSR
     • corporate initiative to assess and take responsibility for the company's effects on the environment and impact on social welfare
   • Business contributes to goals of 'sustainable' development by helping the environment such as being more sustainable in their way of business
   • about how businesses take account of their economical, social and environmental impacts through their operations. through this, they maximizing the benefits while minimizing the downsides
     • innocent smoothie use fresh, natural ingredients and support Fairtrade. they also use environmentally friendly packaging

8. PEST

   • changes over time and therefore needs to be adapted regularly
   • it provides information to managers for effective decision making- both operational and strategic
   • offers informational on both the information and threats