Topic 2 – The Marketing Environment.As an independent marketing management consultant, you have been asked by the marketing director of a leading local white goods company to prepare a report discussing the main components of the micro and the macro marketing environments impacting the organisation.
You are also to outline why the organisation should be knowledgeable about environmental developments.Abigail GattG.F Abela Junior CollegeGroup 2ATable Of Contents1.0 SummaryPage 32.
0 IntroductionPage 33.0 Micro-EnvironmentPage 44.0 Proximate Macro-EnvironmentPage 55.0 Wider Macro-EnvironmentPage 66.
0 ConclusionPage 71.0 SummaryThe market environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful relationships with customers. Three levels of the environment are: Micro (internal) environment – small forces within the company that affect its ability to serve its customers and the macro environment which is divided in two terms. The Proximate macro environment and Macro environment (external). The micro environment refers to the forces that are close to the company and affect its ability to serve its customers. The company’s aspect of microenvironment refers to the internal environment of the company. This includes all departments, such as management, finance, research and development, purchasing, operations and accounting. Each of these departments has an impact on marketing decisions.
Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies, and financial intermediaries. These are the people that help the company promote, sell, and distribute its products to final buyers. Resellers are those that hold and sell the company’s product.
The macro environment refers to all forces that are part of the larger society and affect the microenvironment. It includes concepts such as demography, economy, technology, and politics.2.0 IntroductionIn order to correctly identify opportunities and monitor threats, the company must begin with a full understanding of the marketing environment in which the firm operates. The marketing environment consists of all the actors and factors outside marketing that affect the marketing management’s ability to develop and maintain successful relationships with its target customers.
Though these factors and forces may vary depending on the specific company and industrial group, they can commonly be divided into micro environmental and macro environmental components. For most companies, the micro environmental components are: the company, suppliers, customer markets, competitors, and publics which combine to make up the company’s value delivery system. The macro environmental components are thought to be: demographic, economic, natural, technological, political, and cultural forces.The marketing environment has an impact on every type of business in the industry which includes white goods. A major appliance or domestic appliance is usually defined as a large machine which accomplishes some routine housekeeping task, which includes purposes such as cooking, washing or cleaning, whether in a household, institutional, commercial or industrial setting. Heavy consumer durables such as air conditioners, refrigerators, stoves which used to be painted only in white coating finish but now despite their availability in varied colours , they are still called white goods.
3.0 The Micro EnvironmentThe objective of marketing philosophy is to make profits through satisfying customers. The micro environment refers to the forces that are close to the company and affect its ability to serve its customers. A company must follow an organizational culture which is the collective behaviour of humans who are part of an organization and the meanings that the people attach to their actions. Culture includes the organization values such as visions, norms, working language, systems, symbols, beliefs and habits. It is also the pattern of such collective behaviours and assumptions that are taught to new organizational members as a way of observing, and even thinking and feeling. Organizational culture affects the way people and groups interact with each other, with customers, and with stakeholders. It refers to the internal environment of the company and uses the integrated activity where all the departments which include the management, finance, research and development, purchasing, operations and accounting work together to achieve and create and make marketing decisions.
Whirlpool as a company is said to have a great working environment, since “Whirlpool Corporation believes an employee’s development and growth fosters an engaging work environment where individuals can contribute to their fullest.” Some examples include; this company offers a lot of opportunities for the employees to learn new skills in the area of innovation. Whirlpool provides five levels of training to employees targeting the employees’ working management and leadership skills. This company also recognises the importance to inclusion and diversity, “We are committed to diversity with inclusion because it helps us achieve better results for our customers, shareholders, and employees. It is the right thing to do.” Identifying a company’s corporate culture is of utmost importance. Corporate culture is a way of doing things within a company. If the example of LG which is another leading company of white goods is taken, the company is determined to create a corporate culture based on creativity and autonomy in which they believe they could succeed.
LG’s corporate culture is based on the voice of employees which shows that for this company the employees’ opinions play a very good role. “It illustrates a vision that guides the thoughts and actions of LG employees in attaining the ultimate goal of becoming a “No. 1 LG”.”4.0 The Proximate Macro-EnvironmentThe macro environment signifies all the forces and agencies external to the marketing firm itself. Some of these forces and agencies will be closer to the process of the company than others. For example a company’s customers, suppliers, agents, distributors and other distributive intermediaries and competing companies.
These closer external elements are often collectively referred to as the companies’ proximate macro-environment to distinguish them from the wider external elements. As all businesses need customers, they should be orientated around customers. The firm’s marketing plan should aim to attract and retain customers through products that meets their “wants and needs” and excellent customer service.
Hoover helps the customer by providing a website where the customer can search for and find the ideal product with full specifications before one makes a decision, also helps the customer locate a service centre to make it easy for the customer to receive the product by shipment. The supplier environment consists of other companies or individuals who provide the marketing firm with raw materials, product elements, services and possibly the finished goods themselves. Companies whether they are retailers or manufacturers will often depend on a numerous of suppliers.The suppliers of a company are also so important because even the slightest delay in receiving supplies can result in customer dissatisfaction.
The distributive environment is listed on the marketing intermediaries such as wholesalers, factors, agents and distributors to ensure that their products reach the final consumer. The competitive environment takes care that the management is alert to the potential threat of other companies marketing similar and replacement product whether they are of domestic or foreign origin. In some industries there may be numerous world-wide manufactures posing a potential competitive threat and in others there may only be a few. Armed with knowledge the company will have a greater opportunity to compete effectively.5.0 The Wider Macro-EnvironmentThere are many factors in the macro-environment that will affect the decisions of the managers of any organisation. Tax changes, new laws, demographic change and government policy changes are all examples of macro change.
To help analyse these factors managers can categorise them using thePEST. This sorting distinguishes between the – Political factors which refer to government policy such as the degree of involvement in the economy. Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system. Where the white goods industry is concerned, this could prove a problem although can also be of benefit to them.
White goods companies like Hotpoint need to be careful when it comes to the production and promotion of their products. The products need to be specific to the purpose they are meant fulfil and satisfy consumer needs. When finding out exactly what the consumer wants and promoting the products can expensive and poses a problem as the company has to budget. Due to legislation there are advertising limitations.
Recently Hotpoint have found how it can use this to its advantage and now when promoting its dishwashers has joined with the company Finish who manufacture cleaning goods, in particular dishwasher tablets. This would reduce the costs of any advertising overheads and increase both companies popularity. Economic factors are of concern to marketing companies because they are likely to influence among other things, demand, costs, prices and profits which include interest rates, taxation changes, economic growth, increase in and exchange rates.
If white goods companies are importing or exporting goods or resources trade fees and exchange rates are important. Inside the European Union trade is free and no barriers are present. When the pound is strong businesses are able to get more for their money, this is of benefit to large companies like the white goods because not only does it encourage others abroad to invest in the country therefore increasing the strength of the pound it also encourages people to invest into companies therefore increasing revenues. Social factors are the changes in social trends that can impact on the demand for a company’s products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing. This has increased the costs for companies who are committed to pension payments for their employees because their employees are living longer. Technological factors are the new technologies which create new products and new processes.
Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organisations providing the products. When technology isinvolved, the white goods industry has the purpose of the product in mind rather than the consumer. This internet website offers information to consumers of white goods about how to purchase and use the products.
This could identify that consumers of the new technology are finding it hard to use and because of the wide availability are unsure of which dishwasher or fridge is the best for them. This gives insight into where the products are being distributed and whether or not the right information is being given to consumers about products. Many of the white goods companies do not see this problem but see technology as a form of growth and a way forward for the business.
At the moment the white goods companies are benefiting from good sales and turnover, this is mainly due to the macro-environmental factors working in its favour, and therefore reflects the firms being able to market their goods effectively.6.0 ConclusionOne has to analyse the marketing environment to apply to the best marketing strategy. The marketing strategy is the process that can allow the company to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage.
The marketing strategy includes all basic and long term activities in the field of marketing that deal with the analysis the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.