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Applying appropriate models, tools and techniques for an effective marketing plan

Submitted Assignment 2016 10 Pages

Business economics - Business Management, Corporate Governance

Excerpt

1. Micro and Macro environments analysis

The Marketing environment is segregated into three components, the internal environment (micro- environment), the external environment (macro-environment) and the market environment (Strydom, 2004). To realise the company’s position, all three components need to be assessed and evaluated.

In ternal environment analysis

The internal environment consists of the forces and events that occur within or close to the organisation that affect the customer service ability, i.e. management changes, financial issues, culture changes, etc. (Sundaram and Black, 1992). These factors are easier to control and manage.

There are many effective models to measure the internal environment such as the benchmarking analysis, the balanced scorecard, the SWOT analysis and others (Pahl and Richter, 2009).

SWOT analysis

The origin of SWOT analysis goes back in the 1960’s. It was transformed from SOFT analysis (Satisfactory, Opportunity, Fault and Threat) that was used to find out the reasons of a plan failure (Griffin, 2010).

The SWOT analysis investigates:

- S trengths,
- W eaknesses,
- O pportunities and
- T hreats

It measures the company’s internal and external environments and gives information about the current situation of the company in the market. Strengths and weakness are dealing with the internal factors while opportunities and threats with the external factors (Bohm, 2009). Strengths suggest the capabilities of a company to operate having the best possible outcome. Weaknesses are the areas where the company is not performing as expected and immediate actions are required. Opportunities involve the events, the ideas and the circumstances that the company can exploit (Menon et al., 1999). Threats are all the events that the company may be able to foresee but cannot control and needs to moderate (Westhues, Lafrance and Schmidt, 2001).

External environment analysis

The external environment refers to the factors and variables that the company has no control over but can influence the operations, i.e. economy changes, political factors, government regulations, competition, technology etc. These factors need to be identified and monitored (Khan and Khalique, 2014).

There is a range of tools to analyse the external environment such as Porter’s five forces analysis, PESTEL or PEST analysis etc., tools that will be used to analyse the external environment.

Porter’s five forces analysis

Porter’s five forces analysis helps the company understand the strength of its current competitive position as well as where the power lies. This model focuses on five forces that are close to the company and can affect its customer service ability and its profit (Hill and Jones, 2010).

Porter’s five forces are:

- Threat of new entrants
- Threat of substitute
- Bargaining power of the suppliers
- Bargaining power of the customers
- Intensity of competitive rivalry

The threat of new entrants force identifies the threats coming from the possibility of a new company entering the market and acting as a competitor, which might result in minimising the company’s market share and the profit (Wernerfelt, 1984).

The threat of substitute force explores the availability of a product or a service that the consumer can get in the industry. This has a direct effect on the competition and in the overall company’s profitability.

The bargain power of suppliers force specifies the intensity of the industry competition. When suppliers threat to increase their prices or reduce the quality of their supplying products or services, it results in the reduction of the company’s profitability or price increase that might result in a market share loss.

The bargain power of customers force analyses the ability of the customers to set the product or service prices. Powerful buyers may reduce the industry profitability, by increasing competition and forcing prices reduction.

Finally, the intensity of competitive rivalry force refers to the extent to which competitors pressure each other within the industry to limit their profit

PEST analysis

The PEST analysis examines the external environment, including the Political/legal issues, Economic factors, Social/cultural issues and Technological developments. Before introducing a new product or service to the industry, the external environment should be assessed and examined, identifying essential aspects that could critically affect the company’s decision (Drummond et al, 2008).

PEST analysis stands for:

- P olitical and legal issues
- E conomic factors
- S ocial and cultural issues
- T echnological developments

Political and legal issues are related to government laws and other legal matters that could affect the company’s decision, i.e. VAT rate, income tax rate or any other laws related to the product or service.

Economic factors can also affect the decision and should be taken into consideration. Many events and conditions may influence the economy, such as interest rates, unemployment, inflation, money supply etc.

Social and cultural issues are dealing with values and beliefs. For example, family structures, work behaviour, age profiles, social mobility etc.

Technological developments have a direct impact on any decision as technology is developing very fast and it is critical to understand and realise what consumers need and thus apply new technology (Drummond et al, 2008).

2. Marketing objectives

It is very crucial to understand how the market works and what the customers want. Defining objectives and positioning the company within the whole industry, helps the company maintain a competitive advantage (Kotler and Keller, 2012).

Every company that wants to build organisational awareness and increase its customer loyalty should set marketing goals and objectives. It is very crucial, though, to ensure that these objectives are SMART. This approach is a set of questions that helps the company evaluate and measure the possibility to achieve its objectives (Lancaster and Withey, 2007).

SMART approach stands for:

- S pecific
- M easurable
- A chievable
- R ealistic - Relevant
- T ime-specific

Abbildung in dieser Leseprobe nicht enthalten

"Specific" ensures that the objectives are set in a precise and clear way. "Measurable" defines whether the company can check, measure or quantify its objectives. "Achievable" identifies whether the objectives are reasonable and can be achieved or the standards are too high. "Realistic" specifies whether the company has sufficient staff and resources to achieve the objectives and "time-specific" defines the time limit within which it has to reach the objectives (Kotler and Armstrong, 2006).

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Details

Pages
10
Year
2016
ISBN (eBook)
9783346070807
Language
English
Catalog Number
v506350
Institution / College
University of Wolverhampton
Grade
76
Tags
applying

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Title: Applying appropriate models, tools and techniques for an effective marketing plan