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7/29/2019 cours 2 - THE MARKETING ENVIRONMENT.pdf
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Scanning the MarketingScanning the Marketing
EnvironmentEnvironment
Who are the primary competitors?Who are the primary competitors?
How to ascertain their strategies, objectives,How to ascertain their strategies, objectives,
strengths and weaknesses, and reaction patterns?strengths and weaknesses, and reaction patterns?
What are the key methods for tracking and identifyingWhat are the key methods for tracking and identifying
opportunities in the macro-environment?opportunities in the macro-environment?
What are the key demographic, economic, natural,What are the key demographic, economic, natural,
technological, political, and cultural developments?technological, political, and cultural developments?
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The Marketing plan
Segmentation
Market survey
Identifying needs and wants
Choosing a target market(s)
Developping a market offering
Measuring
outcomes
Product PricePlace Promotion
Targeting
Positioning
http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2033http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2031http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2031http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%2030http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Page%20337/29/2019 cours 2 - THE MARKETING ENVIRONMENT.pdf
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The Marketing environment: key terms
1. The Marketing EnvironmentThe actors and forces that affect a companys capability to operateeffectively in providing products and services to its customers.
2. Macro environment The broad forces that affect not only the company but also the other
actors in the microenvironment. The analysis of the five forces political/legal, economic, ecological/physical, social/cultural andtechnological is known as PEEST analysis.
3. Micro environmentThe actors in the companys immediate environment that affects itscapability to operate effectively in its chosen markets.
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The Marketing Environment
Company
Microenvironment
Macroenvironment
Political/legal
Ecological/Physical
Technological
Social/cultural
Economic
Suppliers Customers
Distributors
Competitors
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External marketing audit checklistMacro environment
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The Macro environment
Political and Legal Forces
European Union-wide laws.
- collusion.
- abuse of market dominance.- acquisition and mergers.
- state aid.
National Laws
- laws governing marketing practice e.g. advertising.- national bodies set up to investigate anticompetitive practice.
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Economic Forces
Economic Growth and Unemployment.
Interest and Exchange Rates.
Central and Eastern Europe.
China and India.
Russia and India
The Macro environment
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Ecological/Physical Environmental Forces
Global Warming.
Pollution.
Energy and Scarce Resource Conservation.
Environmentally Friendly Ingredients and Components.
Recycling and Non-Wasteful Packaging.
The Macro environment
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Hitachi
This Hitachiadvertisement
communicates how thecompany is quietly
helping to preserve theplanet by reducing itsCO2 emissions by 100million tons by 2025
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Toyota
Toyota demonstrates its
concern for pollutioncontrol with the ToyotaPrius automobile.
INSERTTOYOTA
PRIUS
ADVERT
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Social/Cultural Forces
Demographic Forces.
- World Population Growth.
- Age Distribution.- Household Structure.
Cultural Forces.
- Subcultures.
- Attitudes to Health.- Cash Rich - Time Poor Consumers.
- Cultural Differences.
- Consumerism.
The Macro environment
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World Population Growth
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The Innocent brand has
been remarkablysuccessful, tapping intothe healthy living
lifestyle. It has extendedits product line from
smoothies to vegetablepots.
Innocent
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Weetabix
Weetabix
communicates its low
sugar, low fat, highfibre attributes.
INSERTWEETABIX
ADVERT
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Management styles in the EuropeanUnion and the USA
Group
Individual
Leadership
Organic Systematic
Organisation
Source: Mole, J. (1990) Mind Your Manners
Italy
Portugal
Greece
Netherlands
Spain France
USA
Ireland
Belgium
Luxembourg
Denmark
UK
Germany
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Technological Forces
Technological Breakthroughs.
Marketing-based Technological Innovation.
Technological Exploitation.
The Macro environment
7/29/2019 cours 2 - THE MARKETING ENVIRONMENT.pdf
17/45Copyright 2003 Prentice-Hall, Inc.
Technological Forces
Technological Breakthroughs.
Marketing-based Technological Innovation.
Technological Exploitation.
The Macro environment
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The Micro environment
Customers
Competition
Distributors
Suppliers
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External marketing audit checklistMicro environment
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Potentialentrants
Suppliers Buyers
Substitutes
Industry
competitors
Rivalry among
existing firms
Bargaining
Power
Bargaining
Power
Threat from
new entrants
Threat ofsubstitut
e
products
The Porter model of competitive Industrystructure
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Competitor analysis
1. Who are our competitors?
2. What are their strengths andweaknesses?
3. What are their strategicobjectives and thrust?
4. What are their strategies?
5. What are their responsepatterns?
Competitoranalysis seeks
to answer five
key questions
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5. What are their response
patterns?
1. Who are our competitors?
2. What are their strengths andweaknesses?
3. What are their strategicobjectives and thrust?
4. What are their strategies?
Product form
Product substitutes
Generics
New entries
Identify competitors
Competitor analysis
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2. What are their strengths andweaknesses? Financial
Technical Managerial
Marketing assets
Strengths andweaknesses
Audit competitorcapabilities
5. What are their response
patterns?
1. Who are our competitors?
3. What are their strategicobjectives and thrust?
4. What are their strategies?
Competitor analysis
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Build
Hold
Harvest
Growth directions
Infer competitorobjectives andstrategic thrust
5. What are their response
patterns?
1. Who are our competitors?
2. What are their strengths andweaknesses?
3. What are their strategicobjectives and thrust?
4. What are their strategies?
Competitor analysis
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4. What are their strategies?
Target segments
Differential
advantages
Competitive scope
Cost leadership
Deduce competitorstrategies
5. What are their response
patterns?
1. Who are our competitors?
2. What are their strengths andweaknesses?
3. What are their strategicobjectives and thrust?
Competitor analysis
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5. What are their responsepatterns?
Retaliatory
Complacent
Hemmed-in
Selective
Unpredictable
Estimate competitorresponse patterns
1. Who are our competitors?
2. What are their strengths andweaknesses?
3. What are their strategicobjectives and thrust?
4. What are their strategies?
Competitor analysis
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Competitor identification
Product from competitors
Technically similar products
Product substitutes
Technically dissimilar products
Generic competitors
Products that solve the problemor eliminate it in a dissimilar way
Potential new entrants
With technically similar products
With technically dissimilarproducts
The competitive arena
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Company capability profiles
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The Customer Value Analysis
1.1. Identify the major attributes customers valueIdentify the major attributes customers value
2.2. Assess the quantitative importance of the differentAssess the quantitative importance of the differentattributesattributes
3.3. Assess the companys and competitors performances onAssess the companys and competitors performances onthe different customers values against their ratethe different customers values against their rateimportanceimportance
4.4. ExamineExamine how customers in a specific segment rate thehow customers in a specific segment rate thecompanys performance against a specific majorcompanys performance against a specific major
competitor on an attribute-by-attribute basiscompetitor on an attribute-by-attribute basis
5.5. Monitor customer values over timeMonitor customer values over time
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Customer's ratings of competitors on key
attributes
Note: E = excellent, G = good, F = fair, P = poor.
FFGPFCompetitor C
EGEGGCompetitor B
GPPEECompetitor A
Selling
Staff
Technical
Assistance
Product
Availability
Product
Quality
Customer
Awareness
Competitor B should not be attacked !
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Advertise your performance on key attributes
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Competitive Strategy Options
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How tough is the competition in this
segment?
A segment is unattractive if:
It already contains numerous, strong, or aggressive competitors;It already contains numerous, strong, or aggressive competitors;
It is stable or declining;It is stable or declining;
Fixed costs are high;Fixed costs are high; Exit barriers are high;Exit barriers are high;
Competitors have high stakes in staying in the segment;Competitors have high stakes in staying in the segment;
lead to frequent price wars, advertising battles, and newproduct introductions, competing is expensive !
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How tough is the competition in this
segment?
A segment is unattractive if:
It already contains numerous, strong, or aggressive competitors;It already contains numerous, strong, or aggressive competitors;
It is stable or declining;It is stable or declining;
Fixed costs are high;Fixed costs are high; Exit barriers are high;Exit barriers are high;
Competitors have high stakes in staying in the segment;Competitors have high stakes in staying in the segment;
lead to frequent price wars, advertising battles, and newproduct introductions, competing is expensive !
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How tough is the competition in this
segment?
A segment is unattractive if:
It already contains numerous, strong, or aggressive competitors;It already contains numerous, strong, or aggressive competitors;
It is stable or declining;It is stable or declining;
Fixed costs are high;Fixed costs are high; Exit barriers are high;Exit barriers are high;
Competitors have high stakes in staying in the segment;Competitors have high stakes in staying in the segment;
lead to frequent price wars, advertising battles, and newproduct introductions, competing is expensive !
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Who can potentially enter the segment?
A segments attractiveness varies with the height of itsentry and exit barriers.
Entry barriers: high capital requirements; economies of scale;
patents and licensing requirements; scare locations, raw materials, ordistributors; reputation requirements.
Exit barriers: legal or moral obligations to customers, creditors, andemployees; government restrictions; low asset salvage value due to
overspecialisation or obsolescence; lack of alternatives opportunities; highvertical integration; emotional barriers.
http://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Barriers%20and%20Profitabilityhttp://users/borisberthon/Documents/COURS/MARKETING/2010-2011/#Barriers%20and%20Profitability7/29/2019 cours 2 - THE MARKETING ENVIRONMENT.pdf
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Barriers and Profitability
The most attractive segment is one in which entry
barriers are high and exit barriers are low
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What are the substitutes for my product?
Prices and profits in the segment are likely to fall if the substitutesare:
As performant as my product but cheaper;
More performant than my product for similar price
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How strong is the buyers bargaining power?
Buyers bargaining powerBuyers bargaining power grows when:grows when:
They become more concentrated or organized;They become more concentrated or organized;
The product represents a significant portion of the buyers cost;The product represents a significant portion of the buyers cost;
The product is undifferentiated;The product is undifferentiated;
The buyers switching costs are low;The buyers switching costs are low;
Buyers are price sensitive;Buyers are price sensitive;
Buyers can integrate upstream.Buyers can integrate upstream.
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How strong is the suppliers bargaining
power?
SuppliersSuppliers tend to be powerful when:tend to be powerful when:
They are concentrated or organised;They are concentrated or organised;
There are few substitutes;There are few substitutes;
The supplied product is an important input;The supplied product is an important input;
The costs of switching suppliers are high;The costs of switching suppliers are high;
The suppliers can integrate downstream.The suppliers can integrate downstream.
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Lhexagone sectoriel : le football franais en
2006
0
10
10
1010
10
10
5
5
5 5
5
5
Pouvoir de
ngociation des
clients et
distributeurs
Pouvoir de
ngociation des
fournisseurs
Intensitconcurrentielle
Menace desentrants
potentiels
Pouvoir de
ltat
Menace des
produits de
substitution
Crteil, RedStar
Faible menace
O.L, O.M, LOSC, etc.Trs forte intensit
Groupes desupporters,
leaders dopinion,
cots de transfertlevs
Pouvoir moyen
quipementiers,concurrents,
image de marque
fortePouvoir fort
DNCG, fiscalitFortpouvoir Rugby (Stade
Franais), Basket(PBR)
Menace moyenne
The KFS are in fact the factors that counteract the forces of competition
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Improving value for money
Customer Loyalty (reputation, service quality, etc..)Establishment of transfer costs (technology specific)
Creation of a technological breakthrough
Launch a campaign to destabilize the substitute
Ability to supply the substitute
Threat of substitutes
Multiplication of sources of supply
Using technologies and generic components
Integrate backwards
Suppliers' bargainingpower
Creating a brand valued by the final customerEstablishment of transfer costs
Multiplication of distribution networks
Forward integration
Buyers' bargaining power
Elements to counteractStrength of competition
The KFS are in fact the factors that counteract the forces of competition
The KFS are in fact the factors that counteract the forces of competition
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Lobbying capacityState power
Innovation Capacity
Customer Loyalty (reputation, service quality, etc..)
Establishment of transfer costsProtection technology (patents, trade secrets)
Control of scarce resources or distinctive skills
Reducing fixed costs
Industry rivalry
Setting a price level not profitable for entrants
Customer Loyalty (reputation, service quality, etc..)
Establishment of transfer costs
Protection technology (patents, trade secrets)
Control of scarce resources or distinctive skills
Threat of potential
entrants
Elements to counteractStrength of
competition
The KFS are in fact the factors that counteract the forces of competition
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Key success factors of the football industry
in France
Create a brand valued by the public (supporters, opinion leaders)
Establish exclusive partnerships with a supplier, sponsors,
supplier clubs (Brazil, League 2)
Develop programs for consumer loyalty (pricing, subscription,
related services, sales promotion)
Control of scarce resources and distinctive skills (players,coaches, stadium)
Lobbying capacity towards regulators