Concept Of Marketing Environment Commerce Essay

Concept Of Marketing Environment Commerce EssayThis module gives an en humble to Business environs in which the firm operates. It implys sagacity different surroundingss bid the heavy(a) surroundings, micro surround and internal environs. Thorough chthonianstandings of these concepts argon peachy for understanding the opportunities, threats, finding weaknesses of the organization as well as its strengths. This experience patrons the firms to fore plan and makes effective decisions. approach to Marketing StrategyIntroductionThis lesson introduces the role and importance of Marketing Strategy to an organization. When you gravel finished this lesson you should be able toExplain the concept of food market placeing environmentIdentify the large instruction environmental factors that view the organizational policies.Identify the micro environmental factors that affect the organizational policies.Identify the internal environmental factors.Explain hit the books summ aryConcept of Marketing EnvironmentThe market environment refers to the environment that the business enterprise operates in, which includes factors and forces that affect the firms policies and strategies.There argon two levels of market environment. innate and orthogonal environment, the external environment backside be further divided into big and Micro environment.(For annex only)External Environment The external environment consists of macro and micro environments. macro instruction environment The macro environment consists of much larger and broader solves (which impact the micro environment), such as Demographic environment frugal environment natural environment technological environmentCulture semipolitical environmentMicro Environment The micro environment is made of individuals and organizations associated with the family and would directly impact the decisions of the company. It consists of federation itselfSuppliersMarketing IntermediariescustomersCompetitionPu blic inwrought Environment immanent environment consists of elements within the organization such asEmployeesMan get onment smart set policiesOrganizational cultureOrganizational structure play along fig stick and expertiseOperational efficiencyOperational subject matter injury aw benessMarket share monetary capacityPatents and flip-flop secrets max contractsFor an organization to analyse the overall environment in which it operates, environmental see becomes necessary.Environmental s gougening is a process of monitoring, evaluating, and transmitting of development from the external and internal environment to concerned raft within the organization. (Kazmi, 2008).Environmental s set upning would help gather, analyse, and transmit information for strategical purposes.Environmental s back toothning is carried protrude by organizations to find out its competencies, weaknesses as well as the opportunities and threats backup in the environment, which is termed as the trick ou t AnalysisSWOT Analysis The summary of the environment in which business operates is referred to as a SWOT analytic thinking. The SWOT abridgment support to find information helpful in twinned the firms competencies to the competitive environments. It has a major role in strategy formulation.Internal environmental grazening of the firm helps the firm find itsStrengths (S)Weaknesses (W)External environment scanning can help firms findOpportunities (O)Threats (T)Environmental scanning is valuable for all organization due to the following savvysThe environment in which a firm operates is dynamic in nature, scanning becomes necessary to keep move finished of the changes happening in it. An environmental scan reveals the elements that constitute threats and opportunities available to the firms. It overly helps keep the firm informed about competitors activities so that appropriate strategies can be developed on that basis. It is an authorised tool which gives necessary pre ference for formulation of marketing strategies.(for reference only)As already discussed the external environment can be categorised into Macro and Micro environment.Example SWOT Analysis of WalmartStrengths Walmart has become the largest retailer in the US, and perhaps the world. Its huge get volumes and negotiating style keeps its cost low, which allows them to keep their prices low. People ordain travel a pretty long distance to shop there. It has invested heavily in package applied science to keep tight controls on its operations.Weaknesses Small topical anesthetic businesses very much cant compete with Walmart, and go out of business, which often alienates the small local business community. Walmart has been sued for unfair labor practices as well. These and opposite issues tarnish Walmarts image, particularly for those who are directly impacted.Opportunities Growing markets outside the US offers a great opportunity to continue its reaping.Threats Being number one in its market, many of Walmarts proven strategies are being imitated, to various degrees, by other large retailers. This go away likely make the market for the big box retailers to a greater extent competitive over time.(Source http//www.businesstune-ups.com/swot-analysis-examples.html)Resource Case study for SWOT analysis for TESCO Plc, UK- for Student reference -http//www.oxbridgewriters.com/essays/management/tesco-swot-analysis.phpMacro environmental AnalysisMacro environmental analysis scans the macro factors that influence the organization. The macro environmental analysis is also termed as Pest analysis gentLE Analysis PEST stands for political, Economic, Social-cultural, expert, Legal Environmental analysis. It is composes of the macro-environmental factors used in the environmental scanning for develop strategic management. It is a critical strategic technique used for understanding market growth or decline, business position, potence and direction for the organizations operations. art object of the macro environment is as follows(for reference only)There is certain excess factor other than PESTLE, which are included in the macro environment such as demographic environment.Demographic Environment Demographic environment consists of the following elements which has a huge impact on the organizations operations cosmos growth worldwide The huge universe growth that is seen over the a some(prenominal) decades has been an area of concern the population growth has led to exhaustion of uncommon world resources such as fuel, feed and natural resources. The other reason for concern is that the population growth is seen generally in those countries which are the lesser developed countries or as called the low income countries who cannot afford to support this mental of population growth.High population growth can stand fundamental implications on the business. Population growth is beneficial for businesses only where this kind of growth is backed wit h the get forcefulness.For example India and China Both these countries possess advanced population growth and are the countries having the highest population in the world. Whereas Chinese political relation has a strict one kidskin policy, which has led to a pass in their population, in India no such policy follows. The one child policy in china has led to one child in a family, which has led to excessive pampering of these children by their family members. Here we can see that even with a high population the purchasing power is high. As the children in china are pampered with toys and other childrens products, the toy stores and other kids related products manufactures find a lot of potential in introduction the Chinese market to capitalise on the existing opportunity.Whereas in India the enlarge in population has not seen an increment in the overall purchasing power of the economy, hence the potential for such face of goods is less.Population mount up themes Diffe rent countries have different composition of age groups. Population age groups can be sub-divided intoPre-schoolSchool going childrenTeenagersYoung adults 25 to 40Middle aged 40 to 65Elderly 65 and in a higher placeThe composition of age group of the society determines the kind of products that would dominate the exertion and market. For example a country has an aging population would have pick up for products that would be required for middle aged and elderly population, where as a country with a young population will have potential for children products and products for youngsters.Multi-culture marketThe business policies and strategies would be different for different cultural and ethnical groups existing in the society.Education based groupsThe different kinds of education groups that exist will again determine what kind of products would be demanded in the market. use of goods and service patternsHousehold and inspiration patterns differ in different societies.Migration and mobility of populationMigration of population from one region to another has led to a multi-cultural environment. Where in both(prenominal) countries you can see a mix of different nationals and in others you will find only natives. The business policies and strategies will vary accordingly.All these factors have led to a fragmentation of the market. Businesses have now started to concentrate on smaller markets than mass markets on the basis of these differentiations in population.Economic environmentEconomic factors would be economic growth, interest rates, exchange rates, distribution of wealthiness and income and inflation rate. These factors have major impacts on how businesses operate and make decisions. dispersion of wealth and income The distribution of wealth in the society also determines the intake pattern of that society. Countries where there is equal distribution of income the consumption level and meter of sustentation of people will be higher. Countries where distribution of income is unequal, the standard of living will be low. The type of products demanded in these societies would also differ. Where the standard of living is high, more of luxury and comfort goods will be demanded. monetary policies Financial policies also have a huge impact on the consumption pattern of the consumers. Availability of good credit facilities and a well arrange up credit system kick the buckets to a higher consumption level.Natural environmentThe natural resources which are scarce in nature, takes to be conserved, industries have to be careful how these resources are used. New substitutes for these scarce resources need to be found so that they are sustained.There has been an increase in fuel costs and energy which is used for intersection. The firm has to keep a bordering watch on how the energy prices would have effect on its profits. other cause of concern is the pollution that industrial activities have brought about. The global warming that ha s become a major global concern. Companies who take this as an opportunity by opting in for pollution control programs such as recycling would be ones who benefit.There are also several political regulations on environmental control which call for to be adhered to by every organization. Organizations need to support the governanceal effort rather than opposing it.Technological environmentTechnological factors include technological aspects such as RD activity, automation, technology incentives and the rate of technological change. They can determine entry barriers, minimum businesslike production level and influence outsourcing decisions.Furthermore, technological shifts can affect costs, persona, and lead to innovation.Technological advancement has brought about products into the market which was never dreamt of a few decades back.Increased budgets for RD have led to increased scope for innovations in the market. Another major issues faced by organizations today are Health and sentry go issues there are several regulations in regards to health and safety which organizations needs to adhere to. These entire factors have substantial influence in the strategies and policies of organizations.Political environmentPolitical environment would consist of the government of the economy, that is how and to the extent of government intervention exists in the economy. It includes factors such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability.Bargaining power of special interest group These are groups of people who have interest in the activities of the firm, such as consumer rights, womens rights, senior citizens rights, minority rights etc.Example of NestleNestles business policies in the less developed countries have been criticised widely throughout the world, especially in the United Kingdom and other countries in Europe, there is an ongoing ostracize on Nestle Products.Though Nestle products are available in the market for sale, its sales volume and market share is well at a lower place expectations. Specifically its Baby products like Baby milk range, Baby food supplements and other products for babies are least demanded. The boycott of Nestle products has led to an increase in the market share of its competitors, namely Cow Gate,Socio-cultural environmentSocial-cultural factors include the cultural aspects, career attitudes and emphasis on safety etc. Changes in the social set up and culture have probatory influence on the demand for products and services and how an organization operates.Cultural values hero sandwich culturesShifts in culturesMicro Environmental AnalysisThe micro environment consists of factors that are close to the organization and has a direct effect on its operations.Company itself This would include the internal environment of the organization. (We will cover this part in the next topic)Supplier The suppliers of the organization are the agencies and organization wh o tack resources for production purposes. The supply of raw materials, labour, electricity, equipment, fuel etc. would be done by these organizations. Developing a good supply environment is very important for an organization. Having the availability of resources as required keeps the production going. For this purpose, there have been significant efforts in the recent years to develop a sophisticated supply chain by organizations. The policies of organizations and their suppliers are getting integrated more and more. Organizations now, try to develop a backward integration with their suppliers. This ensures that the supply of materials and function of the organizations go smoothly.Marketing Intermediaries They are the organizations that support the firm in selling, distributing and promoting the products and services to customers. Intermediaries help create place utility for the products. All the intermediaries associated with the firm would be collectively called conduct of dis tribution. Channels of distribution can be of various levels and can include a number of intermediaries like distributors, agents, dealers, retailers. Designing and managing marketing channels is not an easy task, it requires a lot of effort from the organizations path. The organization has to hold out how to manage and keep all the intermediaries satisfied for the smooth functioning of the channels.Customers Customers are the most integral aspect of the external environment. Most of the organizations activities and functions are direct towards satisfying the customers needs and requirements.There can be following type of consumers in the marketConsumer markets -would be individuals and householdsIndustrial markets industries who purchase products for production purposesResellers market organizations that buy goods and services in order to resell them at a certain profitGovernment and non-profit markets buy goods and services for producing public servicesInternational markets i ncludes foreign buyers, producers, resellers etc.Competitors Competitors are those organizations that produce similar products as yours and compete with you for the market share. The competitors have to be identified, monitored and competed with to maintain your market share.The competitors strategies and policies have significant impact on the organizations own strategies and policies, hence a close monitoring of the competitors policies and activities are eminent.Public Would be a group of people who have an interest in the operations of the organization and also would have an impact on the organizations decisions and policies.Every organization has to face certain publicsFinancial institutionsMediaGovernmentAction groupsGeneral publicInternal public(for reference only)Internal EnvironmentInternal environmental scanning is the process of assessing the organizations strengths and weaknesses. It is through this process that organizations competencies and competitive advantages can b e identified.Every organization will have some areas where it will be strong and other where it would be weak. It is the first step towards locating and developing its core competencies so as to survive in the business.The elements under internal environment areEmployees perplexityCompany policiesOrganizational cultureOrganizational structureCompany imageExperience and expertiseOperational efficiencyOperational capacityBrand sensationMarket shareFinancial capacityPatents and trade secretsExclusive contracts(Source http//www.netmba.com/strategy/swot/)Through internal scanning, organizations try to size up its competitive strengths.Strengths of the firm can be as followsPatentsBrands names genuine reputationCost advantagesAccess to resourcesEstablished distribution networksThe Weaknesses of the firm can be as followsWeak brand namesLower quality of productHigh cost structureAn internal environmental scan involves looking at the present capabilities of the organization (infrastructure , hardware, personnel, abilities, structure, etc) and that information can be compared to what the organization will need in the future to achieve its strategic goals.SummaryFont Verdana Size 18 Style Bold)The market environment refers to the environment that the business operates in, which includes factors and forces that affect the firms policies and strategies.There are two levels of market environmentInternal and external environment, the external environment can be further divided into Macro and Micro environment.The analysis of the environment in which business operates is referredto as a SWOT analysis. The SWOT analysis aids to find information helpful in matching the firms competencies to the competitive environments.Macro environmental analysis scans the macro factors that influence the organization. The macro environmental analysis is also termed as Pest analysis. The factors under macro environment areDemographic environmentEconomic environmentNatural environmentTechnol ogical environmentCulturepolitical environmentThe micro environment consists of factors that are close to the organization and has a direct effect on its operations.The factors under micro environment areCompany itselfSuppliersMarketing IntermediariescustomersCompetitionInternal scanning is the process of assessing the organizations strengths and weaknesses. It is through this process that organizations competencies and competitive advantages can be identified.The elements under internal environment can beEmployeesManagementCompany policiesOrganizational cultureOrganizational structureCompany imageExperience and expertiseOperational efficiencyOperational capacityBrand awarenessMarket shareFinancial capacityPatents and trade secretsExclusive contracts