cours 2 - the marketing environment.pdf

7/29/2019 cours 2 - THE MARKETING ENVIRONMENT.pdf

1/45

Scanning the MarketingScanning the Marketing

EnvironmentEnvironment

Who are the primary competitors?Who are the primary competitors?

How to ascertain their strategies, objectives,How to ascertain their strategies, objectives,

strengths and weaknesses, and reaction patterns?strengths and weaknesses, and reaction patterns?

What are the key methods for tracking and identifyingWhat are the key methods for tracking and identifying

opportunities in the macro-environment?opportunities in the macro-environment?

What are the key demographic, economic, natural,What are the key demographic, economic, natural,

technological, political, and cultural developments?technological, political, and cultural developments?


2/45

The Marketing plan

Segmentation

Market survey

Identifying needs and wants

Choosing a target market(s)

Developping a market offering

Measuring

outcomes

Product PricePlace Promotion

Targeting

Positioning
http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2033http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2031http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2031http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2033


3/45

The Marketing environment: key terms

1. The Marketing EnvironmentThe actors and forces that affect a companys capability to operateeffectively in providing products and services to its customers.

2. Macro environment The broad forces that affect not only the company but also the other

actors in the microenvironment. The analysis of the five forces political/legal, economic, ecological/physical, social/cultural andtechnological is known as PEEST analysis.

3. Micro environmentThe actors in the companys immediate environment that affects itscapability to operate effectively in its chosen markets.


4/45

The Marketing Environment

Company

Microenvironment

Macroenvironment

Political/legal

Ecological/Physical

Technological

Social/cultural

Economic

Suppliers Customers

Distributors

Competitors


5/45

External marketing audit checklistMacro environment


6/45

The Macro environment

Political and Legal Forces

European Union-wide laws.

- collusion.

- abuse of market dominance.- acquisition and mergers.

- state aid.

National Laws

- laws governing marketing practice e.g. advertising.- national bodies set up to investigate anticompetitive practice.


7/45

Economic Forces

Economic Growth and Unemployment.

Interest and Exchange Rates.

Central and Eastern Europe.

China and India.

Russia and India



8/45

Ecological/Physical Environmental Forces

Global Warming.

Pollution.

Energy and Scarce Resource Conservation.

Environmentally Friendly Ingredients and Components.

Recycling and Non-Wasteful Packaging.



9/45

Hitachi

This Hitachiadvertisement

communicates how thecompany is quietly

helping to preserve theplanet by reducing itsCO2 emissions by 100million tons by 2025


10/45

Toyota

Toyota demonstrates its

concern for pollutioncontrol with the ToyotaPrius automobile.

INSERTTOYOTA

PRIUS

ADVERT


11/45

Social/Cultural Forces

Demographic Forces.

- World Population Growth.

- Age Distribution.- Household Structure.

Cultural Forces.

- Subcultures.

- Attitudes to Health.- Cash Rich - Time Poor Consumers.

- Cultural Differences.

- Consumerism.



12/45

World Population Growth


13/45

The Innocent brand has

been remarkablysuccessful, tapping intothe healthy living

lifestyle. It has extendedits product line from

smoothies to vegetablepots.

Innocent


14/45

Weetabix

Weetabix

communicates its low

sugar, low fat, highfibre attributes.

INSERTWEETABIX

ADVERT


15/45

Management styles in the EuropeanUnion and the USA

Group

Individual

Leadership

Organic Systematic

Organisation

Source: Mole, J. (1990) Mind Your Manners

Italy

Portugal

Greece

Netherlands

Spain France

USA

Ireland

Belgium

Luxembourg

Denmark

UK

Germany


16/45

Technological Forces

Technological Breakthroughs.

Marketing-based Technological Innovation.

Technological Exploitation.



17/45Copyright 2003 Prentice-Hall, Inc.

Technological Forces

Technological Breakthroughs.

Marketing-based Technological Innovation.

Technological Exploitation.



18/45

The Micro environment

Customers

Competition

Distributors

Suppliers


19/45

External marketing audit checklistMicro environment


20/45

Potentialentrants

Suppliers Buyers

Substitutes

Industry

competitors

Rivalry among

existing firms

Bargaining

Power

Bargaining

Power

Threat from

new entrants

Threat ofsubstitut

e

products

The Porter model of competitive Industrystructure


21/45

Competitor analysis

1. Who are our competitors?

2. What are their strengths andweaknesses?

3. What are their strategicobjectives and thrust?

4. What are their strategies?

5. What are their responsepatterns?

Competitoranalysis seeks

to answer five

key questions


22/45

5. What are their response

patterns?





Product form

Product substitutes

Generics

New entries

Identify competitors

Competitor analysis


23/45

2. What are their strengths andweaknesses? Financial

Technical Managerial

Marketing assets

Strengths andweaknesses

Audit competitorcapabilities


patterns?




Competitor analysis


24/45

Build

Hold

Harvest

Growth directions

Infer competitorobjectives andstrategic thrust


patterns?





Competitor analysis


25/45


Target segments

Differential

advantages

Competitive scope

Cost leadership

Deduce competitorstrategies


patterns?




Competitor analysis


26/45

5. What are their responsepatterns?

Retaliatory

Complacent

Hemmed-in

Selective

Unpredictable

Estimate competitorresponse patterns





Competitor analysis


27/45

Competitor identification

Product from competitors

Technically similar products

Product substitutes

Technically dissimilar products

Generic competitors

Products that solve the problemor eliminate it in a dissimilar way

Potential new entrants

With technically similar products

With technically dissimilarproducts

The competitive arena


28/45

Company capability profiles


29/45

The Customer Value Analysis

1.1. Identify the major attributes customers valueIdentify the major attributes customers value

2.2. Assess the quantitative importance of the differentAssess the quantitative importance of the differentattributesattributes

3.3. Assess the companys and competitors performances onAssess the companys and competitors performances onthe different customers values against their ratethe different customers values against their rateimportanceimportance

4.4. ExamineExamine how customers in a specific segment rate thehow customers in a specific segment rate thecompanys performance against a specific majorcompanys performance against a specific major

competitor on an attribute-by-attribute basiscompetitor on an attribute-by-attribute basis

5.5. Monitor customer values over timeMonitor customer values over time


30/45

Customer's ratings of competitors on key

attributes

Note: E = excellent, G = good, F = fair, P = poor.

FFGPFCompetitor C

EGEGGCompetitor B

GPPEECompetitor A

Selling

Staff

Technical

Assistance

Product

Availability

Product

Quality

Customer

Awareness

Competitor B should not be attacked !


31/45

Advertise your performance on key attributes


32/45


33/45

Competitive Strategy Options


34/45

How tough is the competition in this

segment?

A segment is unattractive if:

It already contains numerous, strong, or aggressive competitors;It already contains numerous, strong, or aggressive competitors;

It is stable or declining;It is stable or declining;

Fixed costs are high;Fixed costs are high; Exit barriers are high;Exit barriers are high;

Competitors have high stakes in staying in the segment;Competitors have high stakes in staying in the segment;

lead to frequent price wars, advertising battles, and newproduct introductions, competing is expensive !


35/45


segment?








36/45


segment?








37/45

Who can potentially enter the segment?

A segments attractiveness varies with the height of itsentry and exit barriers.

Entry barriers: high capital requirements; economies of scale;

patents and licensing requirements; scare locations, raw materials, ordistributors; reputation requirements.

Exit barriers: legal or moral obligations to customers, creditors, andemployees; government restrictions; low asset salvage value due to

overspecialisation or obsolescence; lack of alternatives opportunities; highvertical integration; emotional barriers.
http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Barriers%20and%20Profitabilityhttp://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Barriers%20and%20Profitability


38/45

Barriers and Profitability

The most attractive segment is one in which entry

barriers are high and exit barriers are low


39/45

What are the substitutes for my product?

Prices and profits in the segment are likely to fall if the substitutesare:

As performant as my product but cheaper;

More performant than my product for similar price


40/45

How strong is the buyers bargaining power?

Buyers bargaining powerBuyers bargaining power grows when:grows when:

They become more concentrated or organized;They become more concentrated or organized;

The product represents a significant portion of the buyers cost;The product represents a significant portion of the buyers cost;

The product is undifferentiated;The product is undifferentiated;

The buyers switching costs are low;The buyers switching costs are low;

Buyers are price sensitive;Buyers are price sensitive;

Buyers can integrate upstream.Buyers can integrate upstream.


41/45

How strong is the suppliers bargaining

power?

SuppliersSuppliers tend to be powerful when:tend to be powerful when:

They are concentrated or organised;They are concentrated or organised;

There are few substitutes;There are few substitutes;

The supplied product is an important input;The supplied product is an important input;

The costs of switching suppliers are high;The costs of switching suppliers are high;

The suppliers can integrate downstream.The suppliers can integrate downstream.


42/45

Lhexagone sectoriel : le football franais en

2006

0

10

10

1010

10

10

5

5

5 5

5

5

Pouvoir de

ngociation des

clients et

distributeurs

Pouvoir de

ngociation des

fournisseurs

Intensitconcurrentielle

Menace desentrants

potentiels

Pouvoir de

ltat

Menace des

produits de

substitution

Crteil, RedStar

Faible menace

O.L, O.M, LOSC, etc.Trs forte intensit

Groupes desupporters,

leaders dopinion,

cots de transfertlevs

Pouvoir moyen

quipementiers,concurrents,

image de marque

fortePouvoir fort

DNCG, fiscalitFortpouvoir Rugby (Stade

Franais), Basket(PBR)

Menace moyenne

The KFS are in fact the factors that counteract the forces of competition


43/45

Improving value for money

Customer Loyalty (reputation, service quality, etc..)Establishment of transfer costs (technology specific)

Creation of a technological breakthrough

Launch a campaign to destabilize the substitute

Ability to supply the substitute

Threat of substitutes

Multiplication of sources of supply

Using technologies and generic components

Integrate backwards

Suppliers' bargainingpower

Creating a brand valued by the final customerEstablishment of transfer costs

Multiplication of distribution networks

Forward integration

Buyers' bargaining power

Elements to counteractStrength of competition




44/45

Lobbying capacityState power

Innovation Capacity

Customer Loyalty (reputation, service quality, etc..)

Establishment of transfer costsProtection technology (patents, trade secrets)

Control of scarce resources or distinctive skills

Reducing fixed costs

Industry rivalry

Setting a price level not profitable for entrants

Customer Loyalty (reputation, service quality, etc..)

Establishment of transfer costs

Protection technology (patents, trade secrets)

Control of scarce resources or distinctive skills

Threat of potential

entrants

Elements to counteractStrength of

competition



45/45

Key success factors of the football industry

in France

Create a brand valued by the public (supporters, opinion leaders)

Establish exclusive partnerships with a supplier, sponsors,

supplier clubs (Brazil, League 2)

Develop programs for consumer loyalty (pricing, subscription,

related services, sales promotion)

Control of scarce resources and distinctive skills (players,coaches, stadium)

Lobbying capacity towards regulators