(Internal) • Production Costs • Marketing Skills • Employee Capabilities • Financial Resources • Available Technology • Company/Brand Image Opportunities and Threats Amity Business School
(External) • Social • Demographic • Economic • Technological • Political/Legal • Competitive Marketing Environment Amity Business School
• Kotler on marketing : “ Today, you have to
run faster to stay in the same place”.
• Marketing environment is constantly
presenting new opportunities and threats Analyzing Trends Amity Business School
• Many opportunities are found by
identifying trends. • Successful companies recognize and respond profitably to unmet needs and trends. • A trends is a direction or sequence of events that has some momentum and durability (Kotler) or a gradual, long-term up or down movement of demand (Russel). Marketing Environment Amity Business School
• The actors and forces outside marketing
that effect marketing management’s ability to build and maintain successful relationships with target customers. Microenvironment Amity Business School
• The actors close to the company that
affect its ability to serve its customers - The company, suppliers, marketing intermediaries, customer markets, competitors and publics. Macro environment Amity Business School
• The larger societal forces that affect the
microenvironment – demographic, economic, natural, technological, political and cultural forces. Macro Environment Amity Business School
• Macro environment forces and trends shape
opportunities and threats for the company, marketing intermediaries, customers, competitors and publics. • The company must monitor and respond to the forces of macro environment because it represents “ non controllable forces”. Macro Environments Amity Business School
1.Demographic environment 2.Economic environment 3.Natural environment 4.Technological environment 5.Political and Social environment 6.Socio-cultural environment Demographic environment Amity Business School
• Demography: The study of human populations in
terms of size, density, location, age, gender, race, occupation and other statistics. – Increasing population – Growing middle class – Changing family systems – Changing role of women – Better educated, more white collared, more professional population Economic environment Amity Business School
• The factors that affect consumer buying
power and spending patterns. – Global financial crises – Changing income distribution and consumer spending patterns Natural environment Amity Business School
• Natural resources that are needed as
inputs by marketers or that are affected by marketing activities. Technological environment Amity Business School
• Forces that create new technologies,
creating new product and market opportunities. Political and Social environment Amity Business School
• Laws, government agencies, and pressure
groups that influence and limit various organizations and individuals in a given society. – Increasing legislation (laws covering issues, eg. Competition, fair trade practices, environmental protection, product safety, truth in ads, consumer privacy, packaging, labeling, pricing and other important areas. Political and Social environment Amity Business School
– Changing government agency enforcement
– New forms of nontariff barriers in trade – Increased emphasis on ethics and socially responsible actions • Socially Responsible Behaviour • Cause Related Marketing Cultural Environment Amity Business School
• Institutions and other forces that affect a
society’s basic value, perceptions, preferences and behaviours. – Persistence of cultural values – Shifts is secondary cultural values – People’s view of themselves – People’s view of others – People’s view of organization – People’s view of society – People’s view of nature – People’s view of the universe Age Groups: Generation Y Amity Business School
• Born between 1979 and 1994
• Size creates immense marketing impact • Respond to ads differently • Love customized products and services Age Groups: Generation X Amity Business School
• Born between 1965 and 1978
• Savvy and cynical consumers
• Indulge themselves with meals/alcohol,
clothing, and electronics Age Groups: Baby Boomers Amity Business School
• Born between 1946 and 1964
• Cherish youth, convenience, and individuality • In the “nesting stage” of life • Individualism has led to a personalized economy Competitive Advantage Amity Business School
• The set of unique features of
a company and its products that are perceived by the target market as significant and superior to the competition. Competitive Advantage Amity Business School
Cost
Types of Product/Service Competitive Differentiation Advantage
Niche Strategies Cost Competitive Advantage Amity Business School
Being the low-cost competitor in an industry
while maintaining satisfactory profit margins. Cost Competitive Advantage Amity Business School
• Obtain inexpensive raw materials
• Create efficient operations • Design products for manufacture • Control overhead costs • Avoid marginal customers Sources of Cost Reduction Amity Business School
1. Product design: Cutting-edge design and
reverse engineering can offset costs. 2. Reengineering: Reengineering can make firms more efficient by pruning product lines, closing obsolete factories, and renegotiating supplier contracts. 3. Product innovations: New technology and simplified production techniques can reduce production costs. 4. New methods of service delivery Sources of Cost Reduction Amity Business School
5. Experience Curves: Costs decline as
experience with a product increases, and encompasses marketing, manufacturing, and administration costs. 6. Efficient Labor: Labor costs in low-skill, labor- intensive industries can be reduced by going offshore or by outsourcing. 7. No-frills Products: Removing frills and options can reduce costs. 8. Government subsidies: Governments may provide grants and interest-free loans for target industries. Product/Service Differentiation Amity Business School
Advantage achieved when a firm provides
something that is unique and valuable to buyers beyond simply offering a lower price than the competition. Examples of Amity Business School
Product/Service Differentiation • Brand names • Strong dealer network • Product reliability • Image • Service Niche Amity Business School
Competitive Advantage • Advantage achieved when a firm seeks to target and effectively serve a small segment of the market. Niche Competitive Advantage Amity Business School
• Used by small companies with limited
resources
• May be used in a limited geographic
market Sustainable Amity Business School
Competitive Advantage An advantage that cannot be copied by the competition Sources of Sustainable Amity Business School
Competitive Advantage • Patents • Copyrights • Locations • Equipments • Technology • Customer Service • Promotions Amity Business School
MARKET SHARE DOMINANCE
HIGH LOW MARKET GROWTH RATE
High growth High growth Low market share HIGH
Market leaders Need cash
Require cash Poor profit Large profits margins
$ LOW
Low growth Low growth
High market Low market share share High cash flow Minimal cash flow Strategies for Resource Allocation Amity Business School
