Marketing Strategy and environment.

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James Heavey Marketing Strategy Assignment 1

Nov 2002

"As the market environment changes, managers have to adapt their strategies and organisation. Unless these changes are made, the business will no longer fit the needs of the moment - it will be made obsolete by changes in customer wants, new technologies and new competitors that have adapted more effectively" (Doyle, 2002, pp. 405-406)

Introduction:

The marketing environment is a complex constellation of demands and constraints

that a firm faces as it attempts to compete and grow. These can be both external and internal. The firm has the power to directly affect some but, by no means, all of the areas in the environment. Those areas beyond the firm's control are constantly changing in various ways, it is the responsibility of the firm to take notice of and bring on board any successful changes or advances made in the industry. In the same way they need to identify problems affecting the industry as a whole and react accordingly to minimise negative effect.

Consumer satisfaction is the ultimate goal of the marketing environment.

Method:

The marketing environment surrounds the consumer and the marketing mix.

Consumers and businesses are affected by the forces of the marketing environment. Businesses must determine a marketing strategy, implemented through the aspects of the marketing mix, which aims to satisfy themselves and customers.

According to Dibb, the marketing environment is 'the external forces that directly or indirectly influence an organisation's acquisition of inputs and generation of outputs, comprising six categories of forces: Political/legal, Economic, Societal/green (environmental) and Technological.'

This is also known as the PEST Analysis.

Inputs that are affected include personnel, financial resources, raw materials and information etc.

The outputs identified by Dibb are information (e.g. advertisements), packages, goods, services and ideas.

There are three key sections to the marketing environment, these are the micro environment, the macro environment and the internal environment.

The micro marketing environment contains external forces that influence a firm directly. Micro forces include suppliers, competitors, marketing intermediaries, situation and company specific, buyers, the business internal environment and the company's publics.

The main micro forces are:

The business internal environment:

The internal environment consists of top management, finance, research and development, purchasing, sales and marketing, manufacturing and logistics. All these departments must be taken into account when designing market strategies and marketing mix programmes. Marketers must be aware of organisational factors, monitor them and modify their actions accordingly to ensure internal commencement of their marketing ideas.

Suppliers:

Businesses should recognise the importance of suppliers as without them there would be no end product to sell to consumer. Marketers need to be aware of aspects of supply which might, directly or indirectly, affect the ability of the firm to deliver a quality product to the consumer. Aspects such as; supplier innovations, existing deals with competitors, supply shortages, delays, strikes, recruitment difficulties, legal actions, warranty disputes, supply costs and price trends, new entrants into supply chain, or any other aspect that may affect the natural transfer of goods from supplier to manufacturer.

Marketing Intermediaries:

These are made up of resellers - retailers, wholesalers, agents, brokers dealers - and physical distributors for logistical needs, providers of marketing services, and financial facilitators of credit lines and export guarantees. Without these intermediaries, a business is unlikely to be able to deliver its products as expected by consumers.
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Buyers:

People tend to be more willing to buy when they have 'buying power'. 'Buying power' can be influenced by the product's absolute price, its price relative to alternative products, brand image and quality, reliability. Other reasons why consumers' willingness to spend may be affected are personal expectations about future employment, income levels, prices, family size and general economic conditions. If the responses to these factors are positive then buying will increase as people will obtain more 'disposable income'. Alternatively, if the responses are negative then 'buying power' will decrease.

The macro environment consists of all ...

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