Download Relationship-Insensitive External Environmental Forces

Copyright © 2007 McGraw-Hill Ryerson Limited
Objectives
To understand:
• The concept of environmental scanning and
how forces outside a company play a role in
strategic marketing planning.
• The role of the internal environment in guiding
and supporting marketing strategies and their
implementation.
• The nature and scope of planning and how it
fits within the management process.
• Similarities and differences among mission,
objectives, strategies, and tactics.
Copyright © 2007 McGraw-Hill Ryerson Limited
Objectives
To understand:
• The essential difference between strategic
company planning and strategic marketing
planning.
• The steps involved in strategic marketing
planning.
• The purpose and contents of an annual
marketing plan.
• How a planning model can be a useful aid in
developing a marketing program.
Copyright © 2007 McGraw-Hill Ryerson Limited
The Environment for Strategy and
Planning
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Involves three sets of factors or forces:
1. External macro-environmental forces
2. External micro-environmental forces
3. Internal non-marketing forces
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Insensitive External
Environmental Forces
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Insensitive External
Environmental Forces
1. Demographic Change
• Refers to the statistical study of human
populations.
• The key is to look for changes.
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Aging boomers
Greater number of seniors
More single-person households
Tweens and their economic influence
One must consider the implications of
these trends.
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Insensitive External
Environmental Forces
2. Economic Conditions
• Consumer spending is affected by:
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Stage of the business cycle
Inflation
Interest rates
Unemployment rates
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Insensitive External
Environmental Forces
3. Social and Cultural Forces
• The way consumers lead their lives
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Lifestyles, values and beliefs.
Include:
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Emphasis on quality of life
Immigration brings changing values
Erosion of gender roles and stereotypes
Attitudes toward physical fitness and food
Emphasis on service and relationship quality
Concern for environment
Desire for convenience
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Insensitive External
Environmental Forces
4. Competition
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Competitors’ activities shape a company’s
marketing system.
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Direct brand and store competition from
marketers of similar and directly competing
brands and services
Indirect competition
Competition for the consumer’s limited buying
power
Competition is coming from unexpected
sources, including more foreign.
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Insensitive External
Environmental Forces
5. Technology
• Failure to remain innovative threatens a
firm’s ability to remain competitive.
• Major technological breakthroughs have
three primary impacts on marketing:
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Start entirely new industries
Alter radically or virtually destroy existing
industries
Stimulate other markets and industries
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Insensitive External
Environmental Forces
6. Political and Legal Forces
• Legislation exercises more influence on
the marketing activity of a business than
any other part of its operations.
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General monetary and fiscal policies
Legislative framework and government agency codes and
policies
Social legislation
Government relationships with individual industries
Legislation specifically related to marketing
Provision of information and the purchase of products
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Sensitive External
Environmental Forces
• Controllable environmental forces.
• External to the firm, but part of its
marketing system due to its close
relationship.
• Micro-environment can be influenced.
• Are relationship-sensitive, as it is of
considerable importance for the firm to
establish solid relationships with these
partners in its success.
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Sensitive External
Environmental Forces
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Sensitive External
Environmental Forces
1. The Market Environment
• Made up of customers and prospective
customers.
• Three factors to consider:
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People or organizations with needs or wants
Their purchasing power
Their expectations and buying behaviour
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Sensitive External
Environmental Forces
2. Suppliers
• Critical to marketing success.
• Growing importance of supplier
relationships.
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Sensitive External
Environmental Forces
3. Marketing Intermediaries
• Aid directly in the flow of goods and
services.
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Wholesalers
Various facilitating organizations
Copyright © 2007 McGraw-Hill Ryerson Limited
Internal Non-Marketing Forces
• Internal forces influence the firm’s
marketing strategies, programs and
activities.
• Have the potential to affect customer
satisfaction.
• Controllable.
• Relationship-sensitive.
• Require careful relationship building.
Copyright © 2007 McGraw-Hill Ryerson Limited
Relationship-Sensitive Internal
Environmental Forces
Copyright © 2007 McGraw-Hill Ryerson Limited
Marketing Planning
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Consists of:
1. Planning a marketing program
2. Implementing the program
3. Evaluating its performance
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A Company’s Complete Marketing
Environment
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Nature of Marketing Planning
• Mission
• Objectives and goals
• Strategies and tactics
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Marketing Planning
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Occurs at two different levels:
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Company level
Marketing unit or departmental level
Results in two plans:
1. Strategic marketing plan
2. Annual plan
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Three Levels of Organizational Planning
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1. Strategic Company Planning
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Company level.
Four steps:
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Defining the organization’s mission
Analyzing the situation the company is facing
Setting organizational objectives
Selecting strategies to achieve these objectives
Copyright © 2007 McGraw-Hill Ryerson Limited
2. Strategic Marketing Planning
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Marketing unit or department level.
Five step process, completed for each
major functional area:
1. Conducting a situation analysis
2. Determining marketing objectives
3. Identifying target markets and measuring market
demand
4. Deciding on positioning and differential
advantage
5. Designing a marketing mix
Copyright © 2007 McGraw-Hill Ryerson Limited
3. Annual Marketing Plan
• Plan prepared for each major product or SBU.
• Summarizes strategies that will be used to achieve
specific objectives over the year.
• Points out other activities that must be performed
in implementation and evaluation.
• Outlines who is responsible and what resources
must be made available.
• Represents a “road map” to guide marketing
activity over the coming year.
Copyright © 2007 McGraw-Hill Ryerson Limited
Contents of the Annual Plan
• Exact content is determined by an
organization’s circumstances.
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Executive summary
Situational analysis – including resources
Objectives tailored to organizational goals
Strategies relating to segments and marketing mix
Tactics: Activities to carry out strategies
Financial schedules and projections
Timetable to guide implementation
Evaluation of performance against goals
Copyright © 2007 McGraw-Hill Ryerson Limited
Planning Models
• SBU – Strategic Business Unit
• To be identified as an SBU, an entity must:
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Be a separately identifiable business
Have a distinct mission
Have its own competitors
Have its own executive group with profit
responsibility
Copyright © 2007 McGraw-Hill Ryerson Limited
Planning Model
Boston Consulting Group Matrix
• Classifies each SBU or major product according
to market share and industry growth potential.
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Stars: High market share, high growth
Cash Cows: High share, low growth prospects
Question Marks: Low share in high growth sectors
Dogs: Low market share and low growth
• Position in matrix suggests marketing strategy to
be used.
Copyright © 2007 McGraw-Hill Ryerson Limited
The Boston Consulting Group
Copyright © 2007 McGraw-Hill Ryerson Limited