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Chapter 3 The Changing Marketing Environment (new terms)Marketing environment: all the object factors and surrounding conditions a company faces when taking out marketing activities.Micro-environment: company, suppliers, marketing intermediaries, customers, competitors, the public.Macro-environment:SLEPTWhy should marketers analyze environment?NoncontrollablesThey shape opportunities and limit some possibilities.Purpose - to find out opportunities and avoid threats.SWOT Analysis Internal ExternalStrong Negative Weaknesses ThreatsStrong Positive Strengths OpportunitiesStrengths are those things that make your business stronger.a product or service that sells well; an established customer base;a good reputation in the marketplace;a good track history; a high traffic location; strong management; qualified employees; ownership of patents and trademarks;Weaknesses are those areas in which your company does not perform well or could stand improvementpoor management; employee problems; lack of marketing and sales expertise;lack of capital;bad location; poor products or services; damaged reputation; Opportunities are those things that have the potential to make your business stronger, more enduring, and more profitablenew markets becoming available or old markets that are expanding; possible mergers, acquisitions, or strategic alliances; a competitor going out of business or leaving the marketplace, making their customers open to you; the potential availability of a desired employee. Threats are those things that have the potential to adversely affect your business. (1)changing marketplace conditions; (2)rising company debt; (3)cash flow problems; (4)a strong competitor entering your market; competitors with lower prices;(5)possible laws or taxes that may negatively impact your profits; (6)strategic partners going out of business. Five important environmental variables:1. the objectives and resources of the company;2. the competitive environment;3. the economic and technological environment;4. the political and legal environment;5. the cultural and social environment.Setting Company Objectives:Provide Guidelines ;Be Explicit ;Coordinate Effort;Lead to Marketing ObjectivesObjectives, wherever possible, should be SMART i.e: Specific - clear and easy to understand.Measurable - i.e. able to be quantified.Achievable - possible to be attained.Realistic - not pie in the sky.Time bound - associated with a specific time period.ObjectivesWhy - Objectives shape the direction and operation of the whole business.Howto relate present objectives and resources to external environment and decide future objectives.Complicated.3 basic objectives provide guidelines(1)Be socially useful. (2)Organize to innovate. (3)Earn some profit .Mission statement: a statement that sets out the organizations basic purpose for being.A good mission statement should:a. focus on a few key goals rather than embracing everything;b. provide guidelines for difficult decisions.c.The whole firm must work toward the same objectives.d.Marketing manager should be involved in setting company objectives.e.Company objectives should lead to marketing objectives.Company Objectives:Production/ Finance /Marketing (Product/Place/Promotion(Personal selling/Mass Selling/Sales Promotion Objectives)/Price Objectives)/HR /R&D Objectives(图35)Company resources may limit search for opportunitiesCompany resources:1、Financial strength( R&D, production facilities, marketing research, advertising etc.)- a basis to enter into an attractive market2、Producing capability and flexibility ( larger firms vs. smaller firms )3、Marketing strengths :4Psproduct: famous brand, patentplace: good relations with established intermediariespromotion: a skilled sales forceprice: low-cost facilities may undercut the competitors pricesthorough understanding of a target marketKey Concepts in the Competitive Environment:Kinds of Markets,Competitor Analysis.Competitive Rivals.Competitive Barriers.Information on CompetitorsThe competitive environment affects the number and types of competitors the marketing manager must face, and how they behave.Avoid head-on competition and pure competition and plan for inevitable competition.Market competitive situationsPure monopoly is rare: only one firm provides a certain product or service in a certain country or area (local electricity or gas company)Oligopoly avoid head-on competition for very similar products: a small number of (usually) large firms produce products that range from highly differentiated to standardized.Monopolistic competition needs to differentiate very similar products by other elements of the marketing mix : many competitors are able to differentiate their offers in whole or part (restaurants, beauty shops).Pure competition should be avoided: many competitors offer the same product and service (stock market).Competitor analysis :Understand your competitors.Competitor analysis: an organized approach for evaluating the strengths and weaknesses of current or potential competitors marketing strategies.The initial step is to identify potential competitor (from the point of view of target customers).Focus on the competitive rivals( your closest competitors)-rivals offering similar products or serving similar needs with a different product (e.g. disposable diapers, cloth diapers and diaper rental services).Watch for competitive barriersCompetitive barriers: the conditions that may make it difficult, or even impossible, for a firm to compete in a market.The economic and technological environment affect the way firms-and the whole economy-use resources.The economic environment affects national income, economic growth, interest rates and inflation.The Impact of Technology1、Technology is the application of science to convert an economys resources to output2、Technology creates opportunities and poses challenges as well3、Technology impacts marketing both through opportunities for new products and new ways (processes) for handling marketing functions4、Its easy for a firm to slip into a production orientation following a new discovery in an R&D lab.Characteristics of the Political Environment:Nationalism ,Consumerism ,Regional Groupingsthe Political Environment:The attitudes and reactions of people, social critics, and governments all affect the political environment.Nationalism - the emphasis on a countrys interests before everything else - affect how marketing systems work and whether a firm can enter a market. Regional groupings ( the EU, European Union, reduces taxes and other barriers, increase efficiency, reduce costs and the prices, the “Euro” )Consumerism: a social movement that seeks to increase the rights and powers of consumers and buyers in relation to sellers and the government.Environmentalism concerns uneasiness over what we buy, how we use products, and how we dispose of waste. (reduce, reuse and to recycle, sustainable marketing and green marketing)The Legal Environment(manager must carefully monitor the legal environment.)1、The legal envir

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