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Marketing Environment, Deriving Marketing
Strategies
Session 2
PowerPoint Presentation
Session-1 Revisited
 Marketing.
 Marketing Philosophies: Different Marketing
Concepts.
 Holistic Marketing
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Relationship Marketing
Internal Marketing
Performance Marketing.
Integrated Marketing (4Ps)
4P’s of Marketing
 Marketing Mix
Product
Price
Promotion
Place
• Features, Designs, Quality, Brand, Sizes,
services, Warranty, Product Variety.
• Discounts, Incentives, List price, Credit Terms,
Payment method.
• Sales Promotion, Advertising, Sales force, PR.
• Distribution Channel, Location, Transport
Steps in Marketing Management
1. Analyzing Marketing Opportunity.
2. Selecting Target Markets, Developing Marketing
Strategies.
3. Developing Marketing Mix (4Ps)
4. Managing the Marketing Effort
Marketing Environment Analysis
Customers
Competitors
External
Market
Environment
External
Environment
Internal
Performance,
Resources
Why Environmental Analysis
Opportunities
and Threats
Strengths
and
Weaknesses
Develop
Marketing
Strategies and
Plans
External Environment
Customers
Competitor
• Motivations
• Unmet Needs
• Segments
• Performance.
• Brand
• Cost
Structure
• Strengths and
Weaknesses
• Current and
Past
Strategies
Market
• Profitability
• Size
• Trends
• KSF
External Environment
Industry Environment
• Porters Five Forces
• Threats of New
Entrants.
• Power of Suppliers.
• Power of Buyers.
• Product Substitutes
• Intensity of Rivalry
General Environment
• Demographic
• Economic
• Socio-cultural
• Global
• Technological
• Politico-Legal
Threats of New Entrants
 Barriers
to Entry:
 Economies
of scale
 Product differentiation
 Capital requirements
 Access to distribution channels
 Cost disadvantages independent of scale
 Government policy
 Expected retaliation
Bargaining Power of Suppliers
• Bargaining power of suppliers is high when
 it
is dominated by a few large companies
 satisfactory substitute products are not available to
industry firms
 industry firms are not a significant customer for
the supplier group
 suppliers’ goods are critical to buyers’ marketplace
success
 effectiveness of suppliers’ products has created
high switching costs
 suppliers are a credible threat to integrate forward
into the buyers’ industry
Bargaining Power of Buyers
• Buyers are powerful when
 they
purchase a large portion of an
industry’s total output
 the sales of the product being purchased
account for a significant portion of the
seller’s annual revenues
 they could easily switch to another product
 the industry’s products are
undifferentiated or standardized.
 Buyers pose a credible threat of backward
integration
Product Substitutes
• Product Substitute are a great threat when:
 customers face few switching costs
 substitute product’s price is lower
 substitute product’s quality and
performance capabilities are equal to or
greater than those of the competing
product
Intensity of Rivalry
• Intensity is high when
 are numerous or equally balanced
 experience slow industry growth
 have high fixed costs or high storage costs
 lack differentiation or low switching costs
 experience high strategic stakes
 have high exit barriers
General Environment
 Demographic Environment
– Population Size (China/ India big markets)
– Age Structure (70% of Nepalese population
is below 35 years)
– Geographic Distribution and Population
density.
– Ethnicity mix (India/ US as a market)
– Family Composition (DINK, Nuclear
families, Joint Families)
– Birth Rates.
General Environment
 Economic Environment
– What are the interest rates/ Inflation
rates.
– Unemployment level
– Economic growth
– Currency conditions (Exports/
Imports)
General Environment
• Socio-cultural environment
– Social values-Traditions, religion, values
– Workforce diversity- more women in Nepal have joined
workforce.
– Concerns about environment.
– Cultural Shifts.
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Cocooning
Fantasy adventure (Bungee, Theme parties)
Pleasure revenge (cigars, tatoos etc.)
Small Indulgences (rewarding luxuries)
Down-aging (symbols of youth)
Being alive (healthy eating, organic products, gym)
99 lives
General Environment
 Global Environment
– Important Political Events (US presidential
election, Sept 11)
– Newly Industrialized countries.
– Global Economy (Recession, boom)
General Environment
• Technological Environment
– Product Innovations
– Communication Technologies (Mobile, Internet)
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Landline Vs Mobile Phones.
Cable Television Vs. Satellite.
Banking Software.
Laptop Vs. Desktop.
Digital Cameras
General Environment
 Politico-Legal
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Deregulation.
Taxation
Measures towards Piracy
Security
Labor Laws
Internal Environment
Internal
Analysis
Financial
Sales &
Market Share
Business
Portfolio
Analysis
Non Financial
Profitability
Customer
Satisfaction/
Brand Loyalty
Product
Quality
Brand/ Firm
Associations
New Product
Activity
Human
Resources
Business Portfolio Analysis
SWOT
Strengths
Weaknesses
Opportunities
Threats
• What the Organization is good at
• What are the capabilities
• What the organization lacks
• What does the organization do poorly
• Developments or conditions in the
environment that have favorable
implications to organization.
• Pose dangers to the organizations.
Deriving Marketing Strategies
Business
Vision
Environmental
Analysis
Marketing
Strategies
Marketing
Plans
Deriving Strategies
Internal
Analysis
External
Analysis
Strategic
Alternatives
Product- Market
Investment Strategies
•Growth Directions
•Investment Strategies
Functional Area
Strategies
Bases for SCA
Product Market Investment Strategies- Growth
Existing
products
New
products
Existing
markets
Market
Penetration
Product
Development
New
markets
Market
Development
Diversification
Integration
Product Market Investment Strategies- Growth
Market
Penetration
Market
Development
• Increase
Market Share
• Increase
product usage
• Increase the
frequency
• Increase the
quantity
• Find new
application
for the
current users
• Expand
geographically
• Target new
segments
Product
Development
• Add Product
Features
• Develop new
generation of
products.
Diversification
• Diversity into
new product
and new
market.
• Related or
Unrelated
products
Vertical Integration a. Forward b. Backward
Investment Strategies
Hold
Build Share
Harvest
Divest
Functional Area Strategies
Building Sustainable Competitive Advantage
 Assets
 Competencies
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Sony ( Miniaturization)
Honda (Engines)
NEC (Semi conductors)
Canon (Fine Optics)
Southwest Airline (Operations)
McDonalds (standard products, same quality of services)