Marketing Environment

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Principles of Marketing The Marketing Environment Kotler, P., Bowen, J.T. & Makens, J.C. (2006). Marketing for hospitality and tourism . (4 th  ed). New Jersey: Pearson Education International.

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marketing environment

Transcript of Marketing Environment

  • Principles of MarketingThe Marketing EnvironmentKotler, P., Bowen, J.T. & Makens, J.C. (2006). Marketing for hospitality and tourism. (4th ed). New Jersey: Pearson Education International.

  • BrandsCore marketing conceptsServices MarketingSummary To date Next Dunkin Donuts videocase But first a case to reflect on and reflect for Marketing EnvironmentFredFritalianFred 2

  • Determine why an environmental analysis is of importanceList the aspects that must be addressed in an environmental analysis Explain the elements found within a microenvironment and discuss how they may affect marketingExplain macro-environment forces and discuss how they may affect marketingDefine the term environmental scanning and describe the techniques / tools used Lesson Objectives

  • It is useless to tell a river to stop running; the best thing is to learn how to swim in the direction it is flowing. (Anonymous)

    We only have limited control over variables that influence our NPD (new product development), marketing approach, plans and strategies etcChange is constant e.g technology, new values and lifestyles etc and we need to determine the subsequent potential impact on buyer behaviour patternsUnderstanding of changes helps forecast future needs and wants and respond accordingly Why is the marketing environment of any concern?

  • Why market? To create and maintain profitable customers

    A companys marketing environment consists of the actors and forces outside marketing (the marketing department) that affect a companys ability to build and maintain successful relationships with its target customers. (KBM, 2006:114)

    Appraise ones position in the marketAwareness of trends within the market Decide if changes need to be made Why do Environmental Analysis? (audit)

  • Question: So, what do we hope to learn from environmental analysis?

    Answer:Anything that would impact upon our ability to profitably market products to our customersWhy do Environmental Analysis?

  • What is it?Macro-Environmentconsists of the larger societal forces that affect the entire microenvironment (KBM, 2006:114)Microenvironmentconsists of actors close to the company that affect its ability to serve its customers (KBM, 2006: 114)

    The Marketing Environment

  • Indirect external forces that have a general impact on our organisation and on marketing decisions

    Uncontrollable elements in the external environment create opportunities and threats for a firms marketing mixThe macro-environment

  • External EnvironmentProductPlacePromotionPrice

  • Competitive EnvironmentDemographic EnvironmentNatural (Ecological) EnvironmentEconomic EnvironmentTechnological EnvironmentPolitical (Regulatory impact) Environment Cultural EnvironmentThe macro-environment(Adapted from Analysis for Market Planning, Donald R. Lehmann and Russell S. Winer, p. 22, 1994 by Richard D. Irwin.)

  • Competitive Environment BIG PICTURE LOOKIncreased product lines (eg hotels extended stay / economy / budget more and more diversification etc eg restaurants fast food, ethnic, fine dining)New entrants (eg Aloft, Edition, Hotel Indigo, possibly in future Virgin Galactic)Increased use of alternatives (eg caravans and tents, cruises, theme parks, etc) Increasing variety of holiday package alternatives (volunteer, adventure etc)

    The macro-environment

  • Competitive EnvironmentIn marketing looking at this environment can help companies keep abreast of the competition. New products; new features; new pricing scheduled, new promotional campaigns (remember companies are looking to gain market share) Competitive intelligence - downside espionage

    The macro-environment

  • Demographic EnvironmentSize, location, density, gender, race, occupation etcBaby boomers (1946-1964), Generation X (1965-1976) Generation Y (1977-1994), Generation Z (1995-)

    Natural (Ecological) EnvironmentResources that are needed for or affected by marketing activitiesIncreased awareness (climate change, deforestation, recycling, environmentally friendly amenities etc)

    The macro-environment

  • Example

  • Economic Environment Local, national and international variations in disposable wealthvariations in the local populationincreased leisure time

    In marketing we are looking for indicators of economic health and the level of economic development (prospects) consider where most hotel groups are looking at developing into...

    The macro-environment

  • Technological Environment new materials (eg meat substitutes, hybrid cars - alternatives etc)computers / internet (eg online reservation systems, automated check-in, room keys/cards etc)equipment and methods (eg microwave ovens, cook chill methods, self cleaning rooms in the future? etc) improved transportation (eg motorways, aircraft eg Airbus A380, Boeing 787 dreamliner etc)Improved communication (eg television, colour magazines, podcasting, blogs, mobile phone, e-mail, online newspapers, mobile devices, Wimax etc)

    The macro-environment

  • Examples:Technology

  • Impact of TechnologyInteractivity and m-marketingExample online Smirnoff including games and advertsSmirnoff triple distilled interactive TV advertSmirnoff.mobi / text your way to prizes (tea party site)Viral marketing tea partay (Tea Party site)

  • Viral Marketing

    Encourages people to pass along a marketing message

    ExamplesCareer Builder - http://www.careerbuilder.com/monk-e-mail/ Dove Evolution part of the Campaign for Real Beauty Berlitz German CoastguardBurger King Subservient Chicken, Angry Gram Whopper

    AXE Turning Nice Girls Naughty

    Commercials Website Viral VideoSpanish

  • Impact of TechnologyAs discussed previously - Importance of virtual worlds and games in marketing moves Segment of the market that is gaining in importanceAlternative exposureExample(s)H&M launched in SIMS 2 Avatars able to dress up in latest collections http://thesims2.ea.com/about/sp5_index.phpRemember Starwood Hotels and Resorts Launching a new hotel brand (aloft) - to be opened in 2008 but used SL (Second life) to launch virtual replica in Sept 2006 to solicit feedback regarding design and features. Using blogs to register feedback as well as to keep people updated. Allegedly the first hotel of its kind to do this in SL

  • Political (Regulatory impact) Environment Laws and regulations (ban on smoking in public areas, consumer protection acts etc)Tax increases Cultural EnvironmentGrowth of education Increased rights e.g for women Gender equality / gay rightsIncrease use of credit facilitiesCustoms, beliefs, valuesGrowing concerns e.g. green movement The macro-environment

  • Elements (variables) which may directly affect marketing decisions and / or which it is able to use to gain information that will enhance its marketing operations A set of forces close to the company ..

    The microenvironment

  • The microenvironment

  • Suppliers and service agencies Supply availability (supplies and costs) / Supplier power Outsourcing / leasing operationsPR agencies / advertising agencies Company itself including employeesMarket orientated / customer focusedAll departmentsInternal issues Marketing intermediariesHelp company promote, sell and distributeTravel agents, tour operators etcCustomersBuyer behaviour, purchasing power etc

    The microenvironment

  • Examples

  • Examples: Coca Cola and GlacauJune 2007Coke aquires Glacau - makes of vitaminwater - extension of product range into a growing vitamin water marketThis acquisition fits perfectly within our focus on our North American business and our belief that, alongside our sparkling beverage leadership, an expanded active lifestyle business will greatly enhance our still beverage line-up, said Muhtar Kent, president and chief operating officer, The Coca-Cola Company. Were pleased to have closed the transaction, and now we are moving full speed ahead to fully leverage glacaus growth potential, first in the United States and then around the world.http://www.thecoca-colacompany.com/presscenter/nr_20070607_glaceau_acquisition_closed.html

  • Examples: Westin (Starwood)Our smoke free policy is based on feedback from our guests, industry research and customer data.Westins own customer data and industry research confirms a clear consumer demand for a healthy, smoke-free hotel environment. (series of %age findings)Westin is the first smoke-free upper upscale major hotel brand because its what our guests want.From our Heavenly Bed to our smoke free policy our goal is to find new and exciting ways to meet and exceed our customers expectations.http://www.starwoodhotels.com/promotions/promo_landing.html?category=WI_BREATHE_FAQ

  • REMEMBER HTM

  • STEEP / PEST / PESTLE Checklist for scanning environment to see what it is like now or will be like

    SSocialConsumers habits and preferences TTechnologicalRelevant technology that will be available to customers and competitors EEconomicGeneral state of the economy: salaries, disposable income etc EEnvironmental Likely thinking on environmental issuesPPoliticalLikely political regimes, laws

  • STEEP / PEST / PESTLE Alternative to STEEP - useful for forecasting demand by studying current and past patterns and how these may be affected by possible changes in the organisations environment

    Environmental factors included under the main headings

    PPoliticalEEconomicSSocialTTechnological

  • STEEP / PEST / PESTLE Does not matter as to which model more important to remember to include all the factors

    PPoliticalEEconomicSSocialTTechnological LLegalEEnvironmental

  • Taking a proactive rather than a reactive approach

    Determine environmental areas that require monitoring Determine how the information will be collectedImplement data collection planAnalyze data and use in market planning process

    Simple data collection is not sufficientInformation must be:ReliableTimelyUsed in decision making

    Where could this information come from? Page 144 - KBM

    Environmental Scanning

  • KBMP108Discussion Questions Discussion

  • Why do an Environmental Analysis?What is it?Micro-EnvironmentMacro-Environment

    Summary Familiarity with Sharing. Participation Exercises

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