Chapter VIII: Concluding remarks and Future work
8.3 Further spectroscopic study
Table of Content 1.0
2.0
Introduction
Objectives .
3.1 3.2
3.3 3.4Analysis of the Marketing Environment
Environmental Scanning and Environmental Analysis Approaches to the Marketing Environment
The Marketing Forces
3.4.1
External Forces: The Marketing Environment 14.1.1 Micro-Environment-
3.4.1.2 Macro-Environment 3.5
4.0 5.0
6.0 7.0
Internal Forces: Control able Marketing Variables or the Marketing
Mix
Conclusion Summary
Tutor-Marked Assignment Further Reading
1.0 INTRODUCTION
From previous discussions in unit 1, we have defined marketing as a total
system
of business activities designed to plan, price, promote and distribute want - satisfying goods and services to present and potential customers. A system itself can be viewed as a "regularly interacting or interdependent groupof
items forming a unified whole". This unit focuses on the forces operating inthe marketing system.
2.0 OBJECTIVES
After studying this unit, you should be able to:
(i) Differentiate between the internal and external forces operating in the
marketing system.
(ii) Discuss the importance of environmental scanning and environmental
analysis
(iii)Describe a company's micro and macro environments.
(iv)Explain the meaning of "marketing mix".
3.1 ANALYSIS OF THE MARKETING ENVIRONMENT Every move a
marketer makes is affected by, and has some effect on his marketing environment. Thiscould happen on a smal scale, such as between a manufacturer and a retailer. It could also
happen on a larger scale involving entire industries and governments. Very often, changes in the elements within the environment create new opportunities and eliminate old ones.
These changes can be exciting, frustrating, confusing, irritating and invigorating. They can establish entire industries as wel as drive some other companies into bankruptcy.
In order to better understand the marketing environment, 8 companies that want to be
successful must continually evaluate al environmental factors, by first gathering and thenanalyzing market information. The essence is to understand how the various factors affect
products, pricing, promotion and distribution, both currently and into the future.Monitoring environmental changes helps discover emerging opportunities such as growth markets and unfilled market needs. Armed with such information, marketers can develop
strategies suited to the changing environment.
On the other hand, firms who fail to keep up with environmental changes risk missing interactive opportunities. In actual fact, they may lose their place in the market as
competitors identify the same opportunities and introduce products that take advantage of
them. In the extreme situation, the unaware firm is forced out of business completely.
3.2 ENVIRONMENTAL SCANNING AND ENVIRONMENTAL ANALYSIS
The process of gathering information on various aspects of the marketing environment is called environmental scanning. This information can be collected from salespeople,
dealers, distributors, suppliers, government agencies, magazines, publications,newspapers, books etc.
Environmental analysis is the interpretation of al this information. Marketers evaluate the data collected in environmental scanning with an eye to their own business, considering how the various trends could affect them both now and in the future. By so doing, they can create marketing strategies adapted to the dynamic marketing environment.
3.3 APPROACHES TO THE MARKETING ENVIRONMENT
One can respond to his marketing environment in two ways. The first way isthrough reactive marketing, in which the environmental forces are viewed as being
uncontrollable, and one simply try to adjust to them. The second method is via proactive marketing, whereby steps are adequately taken to change the marketing environment and this make it more conducive to one's activities.
Let us see how the two approaches are different. For instance, when confronted with new legislation banning some of their products, reactive marketers might abandon.
Those offerings and concentrate on developing new products in unregulated areas.
A proactive marketer facing the same external threat would probably join an industry coalition to lobby legislators and raise public support for the industry's point of view.
However, you should note that neither the reactive nor the proactive approach is inherently better. Whatever approach is chosen depends on organisational goals, ethical and legal constraints, and other circumstances. Note also, that this does mean that a marketer always has a choice. For instance, one might be affected by a sudden change in the marketing environment and just left with no alternative but to react.
However hard one might study the environment, the behaviour of nature,
governments, competitors, or customers may not be accurately predicted. But every lit le bit helps. Therefore, by understanding the environment and playing active role in one's industry, there is a reduced chance of being at the mercy of outside forces.
3.4 THE MARKETING FORCES
A company's marketing system often operates within the framework of forces, which constitutes the system's environment. Such forces are either external or internal to
the firm.
3.4.1 EXTERNAL FORCES: THE MARKETING ENVIRONMENT The
external variables (also known as the marketing environment) general y are not control able by the organisation. Formally stated, a company's marketing environment consists of the actors and forces external to the marketing
management function of the firm that impinge on the marketing manager is ability to develop and maintain successful transactions with its target customers.
These "non-controllable" factors are constantly spinning out new marketing opportunities. They also set the limits within which firms may apply the
"controllable" factors in their efforts to capitalise on marketing opportunities. In turn, the impact of differing applications of controllable factors makes for further changes in the non-controllable factors. The result is that every aspect of marketing is
characterised by endless changes.
Although the individual marketing manager can exert little influence over the non-controllable factors, he must know a good deal about them: Apart from
being familiar with their general nature, he must also be consistently alert for changes in them which might affect the application of marketing factors he can control. It should be
observed that changes in the non-controllable factors, and in the way they interact mean not only changes in markets but changes in his marketing problems. Changes of this kind may even result in significant alterations in the operations of wholesale and retail marketing institutions. The marketing environment (or the non-controllable factors) may be divided into two groups: MICRO-ENVIRONMENT (so cal ed because they affect a particular firm) and MACRO-ENVIRONMENT (so called because they affect al firms).
3.4.1.1 MICRO-ENVIRONMENT.
The micro-environment consists of the actors in the company's immediate environment
that affect its ability to serve its market. This includes the company, suppliers, marketing
intermediaries, customers, competitors, and publics. While general y classified as non-control able forces, these elements in the micro-environments are probably susceptible to
a greater degree of influence than the macro group is. For example, a marketing
organisation may be able to exert some pressure on its suppliers or middlemen. It should also be expected that a firm's advertising efforts wil have some influence on its presentand potential competitors.
Company: The important actors here include top management (e.g. Chairmen/ Managing Directors, Executive Directors, Board of Directors, etc), which sets the company's mission objectives, broad strategies, and policies. As a rule, marketing managers must make their decision within the limited context set by these higher levels of management.
We should also note that their marketing proposals must be approved by top management before they can be implemented.
In addition, marketing managers need to work closely with other functional departments within the organisation. These include finance, R&D, purchasing, manufacturing and
accounting. The success or failure of the marketing manager depends on how wel he interacts with these various internal actors.
Suppliers: These are business firms and individuals who provide resources needed by the company and its competitors to produce the particular goods and services. Since
development in this environment can have effects on the company's marketing operations, it is essential for the marketing manager to monitor
( i ) p r i c e t r e n d s
(i )supply availability - supply shortages, strike actions by labour unions, etc.