Marketing Chapter 2 & 3

External Marketing Environment

• external factors that can impact the target audience

• key external force is evolution of target mix

• handles decisions, not controllable, positive trends are opportunities

PESTEL System

Political → government policies, trade regulators, political risks, labour issues

Economic → consumer’s income, purchasing power, inflation, recession

Social → market-oriented values, lifestyles, demographics, needs

Technological → research, tech & future of business

Environmental → climate change, natural resources, sustainability/conservation, regulations

Legal → federal legislation, provincial/territorial laws

Demographic → Gen Z, Y, X, Baby boomers (age, income, location)

Competitive Forces in External Environment

1. direct competitors

2. substitutes

3. new entrants

4. suppliers

5. buyers

Strategic Planning is important because..

• limited time, money

• making choices, establish objectives and how to achieve

• internal resources and the environment

Levels

1. Corporate (direction/scope, resource allocation, opportunities)

2. Business (strategic business unit (SBU), competitive advantage)

   1. Marketing (target market, marketing mix)

Mission Statement

statement of business’s value based on

• analysis of benefits by present/potential customers

• analysis of existing/anticipated environmental conditions

focus on

a) market rather than goods/services

b) be short = define by goods/services than benefits

c) be broad

d) be clear what it provides, what it promises

Corporate, SBU, Marketing Diagran

SWOT Analysis (Strengths, Weaknesses, External Opportunities, Threats)

Strengths & Weaknesses (Internal)

External Opportunities & Threats (External)

Strategic Alternatives

Competitive Advantage

unique features of company and its products, perceived by target market as superior to competition

Cost Competitive Advantage: low-cost competitor in industry, maintain good profit margins

Product/Service Differentiation: unique benefit + value of customer

e.g. Aritizia, invests in training, good customer service, building

Niche: company seeks target, effectively services single segment of market

Sustainable: cannot be copied by competition (e.g. Rolex)

Marketing Objectives

statement of what is to be accomplished through activities

SMART(er)

e → exact (dates/times for start/end dates, avoid interpretation)

r → relative (objective includes growth, compared to when/what?)

Market Opportunity Analysis (MOA)

• analyzes market segments sales potential

• estimates size of market segments (of interest to business)

• assessment of key competitors in market segments 

Marketing Audit

strong one is → comprehensive, systematic, independent , periodic

Implementation → Evaluation → Control

Implement - marketing plan into action assignments

• do what you say you were going to do

• detailed job assignments, timelines/budgets, lots of communication

Evaluate - extent to which marketing objectives achieved in specific period

• common reasons for failing: poor implementations, unrealistic objectives, changes in environment

Control - provide mechanisms for results, correct actions within budget guidelines

Strategic vs Tactical Decisions

Strategic

• made at all three levels, wider in scope

• longer in orientation

• affects long run course of business, alloc. of resources, financial success

Tactical

• made at operational/marketing level, narrow in scope

• short term

Ansoff’s Strategic Opportunity Matrix

Product, Price, Place, Promotion

Product: heart of marketing mix

• physical (package, brand, image, value, warranty, etc)

Price: what a buyer must give up in the exchange

• “value” in mind of consumer, quickest element to change

Place: making products avail. when and where customers wants em

• physical distribution (storing/transporting)

Promotion: introduce, facilitate, sustain between company and customer

• advertising, direct marketing, public relations, personal selling

• digital marketing, sales promotions