POM Updates 14/6

Date :- 14/June/2008

Attendees :- 191

Session 1: – Marketing Environment, Environmental Scanning, SWOT, Environmental Analysis,  Factors, Marketing Environment Hierarchy, PEST

Marketing Environment :- All the external factors to the decision maker (Marketer), that directly or indirectly affect the marketing of the product/brand/organization. Even company entities (like production etc) are considered to be external to the marketer.

There are three key perspectives on the marketing environment, namely the ‘macro-environment,’ the ‘micro-environment’ and the ‘internal environment’.

                                              

Macro – Across Industy Segments. PEST Factors, Also incl. Natural Factors like Tsunami etc. Examples include Inflation, Income, Company Policies (Epilator – Phillips example) etc

Micro – Industry Level (Peer), includes Consumers, Suppliers, Customers, and Stake holders. This has considerable degree of influence on the Mktg Environment

Internal – Five Ms. Men, Money, Machinery, Material and Markets. Managing these factors is called Internal Marketing.

A mode of auditing or analysing the Mktg Environment is done via SWOT analysis. Other tools include PEST Analysis and Porter’s Five-Forces analysis.

S-Strength, W – Weakness, O – Opportunity, T-Threat

Any change in the Mktg environment will result in either an Opportunity/Threat in which the company is Strong/Weak.

Opportunity and Threat – External to the Organization. The organization does not have direct control over this.

Strength and Weakness – Internal to the Organization. The organization can either encash the opportunity using its strength or suppress the threat using its strength. The Strengths and Weaknesses are purely based on the capability of the company.

Based on the above four variables we can come up with the following matrix

T ‹—› S (Key focus area as it provides the value edge Advantage)

0 ‹—› S

T ‹—› W

0 ‹—› W

Listed in the order of priority.  0 ‹—› W is typically avoided from a Mktg Perspective as there is little control on the same.

In SWOT, strengths and weaknesses are internal factors. For example:A strength could be:

• Your specialist marketing expertise.
• A new, innovative product or service.
• Location of your business.
• Quality processes and procedures.
• Any other aspect of your business that adds value to your product or service.

A weakness could be:

• Lack of marketing expertise.
• Undifferentiated products or services (i.e. in relation to your competitors).
• Location of your business.
• Poor quality goods or services.
• Damaged reputation.

In SWOT, opportunities and threats are external factors. For example: An opportunity could be:

• A developing market such as the Internet.
• Mergers, joint ventures or strategic alliances.
• Moving into new market segments that offer improved profits.
• A new international market.
• A market vacated by an ineffective competitor.

E.g Growing Economy is an Opportunity which could be leveraged provided the company can increase the capacity of Production

A threat could be:

• A new competitor in your home market.
• Price wars with competitors.
• A competitor has a new, innovative product or service.
• Competitors have superior access to channels of distribution.
• Taxation is introduced on your product or service.

E.g. Inflation to Product Companies, Health Issues for COLA products

(Source :- http://www.marketingteacher.com/Lessons/lesson_swot.htm)

SWOT analysis are subjective and should be used as a guide only.

Key Factors impacting Environmental Analysis

→ Identify all factors possible

→ Prioritize the factors

→ Identify the factors as Opportunities/Threats and do a SWOT

Class Exercise on Identifying all the factors for Mobile Phones: – Technology, Bandwidth, Plans, Health, Literacy, Income etc