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Marketing and Entreprise Strategy

Susan Simei-Cunningham

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THE MICRO ENVIRONMENT

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Learning Outcomes

At the end of the sessions, you should be able to:

– Explain the importance of understanding the organisation’s marketing environment

– Define internal and the micro

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Last Week Recap

• The macro environment and show the relationship between the subject and the syllabus.

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Flashcard Exercise

• Online exercise for recap.

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The Organisations Marketing Environment

5 M’s –Internal stakeholders

MarketsMen

MaterialsMachines

Money

MICRO –Connected

stakeholders

Intermediaries

Suppliers

Customers

CompetitorsOther Stakeholders

What is this?

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The Macro Environment

The business environment consists of all the actors and forces outside marketing that affect the marketing management’s ability to develop and maintain successful relationships with its target customers.

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The Micro Environment

The micro environmental components are: • The company• Suppliers• Marketing channel firms (intermediaries) • Customer markets• Competitors• Publics

Combined they make up the company’s value delivery system.

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Task- Discussion

Will these factors vary according to sectors, or industry?

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THE MICRO ENVIRONMENT

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The Micro Environment

• The micro environment is said to generate some level of influence over the company but this is indirect.

• We shall now look at the factors/elements within the micro environment.

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Suppliers

• Suppliers are organisations and individuals that provide the resources needed by the company and its competitors to produce goods and services. They are an important link in the company’s overall customer “value delivery system.”

• What must we consider with suppliers?

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Business Intermediaries

These companies promote, sell, and distribute goods to final buyers. 1). Resellers are distribution channel organisations. 2). These include wholesalers and retailers who buy and resell merchandise. 3). Resellers often perform important functions more cheaply than the company can perform itself. (outsourcing)

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Business Intermediaries

• Physical distribution firms stock and move goods from their points of origin to their destinations. E.g warehouses.

• Marketing service agencies target and promote a companies products.

• Financial intermediaries help finance transactions and insure against risks.

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Customers

• The company must study its customer markets closely since each market has its own special characteristics. These markets normally include:

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Customers Types

1) Consumer markets (individuals and households that buy goods and services for personal consumption).

2). Business markets (buy goods and services for further processing or for use in their production process).

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Customers

3). Reseller markets (buy goods and services in order to resell them at a profit).

4). Government markets (agencies that buy goods and services in order to produce public services or transfer them to those that need them).

5). International markets (buyers of all types in foreign countries).

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Competitors

Every company faces a wide range of competitors.

A company must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace.

No single competitive strategy is best for all companies.

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Publics

• A public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. A company should prepare a marketing plan for all of their major publics as well as their customer markets.

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Case Study

• Times100 Case study on the internal environment. http://www.thetimes100.co.uk/case-study--

using-pestel-to-design-effective-strategies—104-262-1.php

• Supplier relations http://www.nokia.com/corporate-responsibility/environment/case-studies -hips

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THE INTERNAL ENVIRONMENT

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The Internal Environment

• All factors that are internal to the organization are known as the ‘internal environment’. They are generally audited by applying the ‘Five Ms’ which are

• Men, • Money, • Machinery, • Materials and Markets.

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Internal Environment

• The internal environment is as important for managing change as the external.

• As marketers we call the process of managing internal change.

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Case Study

• Case Study in: Johnson, G. et al., 2005. Exploring Corporate Strategy. 7th ed. Essex: Pearson Education Ltd.

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Summary

It is clear that for a strategy to be successful, the orgainsation must understand the and player in all of the environment and measure their impact.

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Syllabus Reference

• Review the syllabus

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Homework 1 MCQ

• http://www.oup.com/uk/orc/bin/9780199288304/01student/mcqs/ch02/

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Homework 2

• Examine the importance of Value Creating Activities in relation to Porter’s value chain model and the internal environment.

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Homework 3 MCQ

• http://www.oup.com/uk/orc/bin/9780199288304/01student/mcqs/ch04/