The Global Marketing Environment

1
The Global Marketing Environment

• Aim To review and/or develop suitable procedures
  and frameworks for the analysis of the global
  marketing environment.

2
The Global Marketing Environment (cont.)

• Why is a knowledge of the environment important?
• What is the macroenvironment?
• What is the microenvironment

3
The Global Marketing Environment (cont.)

• Analysis of the environment critical for company
  strategy and future direction
• Macroenvironment forces which impact on
  industries and markets in which a company
  operates
• Microenvironment the competitive environment,
  industries and markets
• Both at global and local/national level

4
The Global Marketing Environment (cont.)

• What is/are the other factors which determine
  company strategy?

5
The Global Marketing Environment (cont.)

• Internal Company Analysis
• Resource Analysis
• Competence Analysis
• Value Chain Analysis

6
The Global Marketing Environment (cont.)

• What are the frameworks and processes for
  analysis commonly used in this context?

7
The Process

• Scanning
• Monitoring
• Forecasting
• Assessment
• (Ginter Duncan, 1990)

• Information gathering
• Information processing
• Knowledge generation
• ( Stonehouse et al)

8
The Process (cont.)

• Scanning identifying indicators of potential or
  ongoing change
• Monitoring tracking change over time, confirming
  weak signals or hunches
• Forecasting developing credible and accurate
  future scenarios
• Assessment evaluation of effects in the
  environment on the strategic management of the
  organisation

9
The Macroenvironment

• Changes and trends in
• political
• legal
• economic and financial
• social and cultural
• technological
• factors.
• ? The STEP/PEST model

10
? Porter, The Diamond of National Advantage
Firm Strategy, Structure and Rivalry Factor
Demand Conditions
Conditions Related and Supporting Industries
Chance
Government
11
The Microenvironment

• Shaped by macroenvironmental factors
• Consists of
• - industries
• - markets

12
The Microenvironment (cont.)

• The industry consists of a group of businesses
  with
• similar output (the supply side), sharing
• skills and competencies
• technology
• processes and value-adding activities
• materials
• supplier channels
• distribution channels
• products

13
The Microenvironment (cont.)

• The market constitutes the demand side of an
• economic system and is defined in terms of
  shared
• products or services
• customers
• distribution channels
• competitors

14
Industry analysis

• ? Porters five forces framework
• Threat of new entrants to the industry
• Threat of substitute products
• Bargaining power of customers
• Bargaining power of suppliers
• Rivalry among current competitors in the industry

15
Market analysis

• Customer analysis
• - market segmentation analysis
• - customer motivations
• sensitivity to price
• sensitivity to quality
• brand loyalty
• - unmet needs

16
Market analysis (cont.)

• Competitor analysis
• markets and segments served
• market share
• profitability
• price structure
• product quality
• customer loyalty
• suppliers and distribution channels
• research, development, innovation
• (based on Stonehouse et al)

17
Company Analysis

• SWOT analysis
• Internal (Strengths, Weaknesses)
• External (Opportunities, Threats)
• eg. STEP analysis

18
Company Analysis (cont.)

• Nature of firm will determine (international)
  strategy
• Consumer products
• Industrial products
• Services

19
The consumer products firm

• Tastes and preferences may vary in different
  markets.
• Brand management is a significant issue.
• Standardisation vs. modification of marketing
  programme is an important issue.

20
The industrial products firm

• Firms often exhibit technology/production
  orientation rather than marketing orientation.
• Industrial products normally more complex.
• Purchase often represents a significant financial
  commitment.
• Relationships and networks are more important in
  the marketing process.

21
The services firm

• Significant growth in services globally.
• Nature of services
• Intangibility
• Inseparability
• Heterogeneity
• Perishability
• Product-service continuum

22
The Global Marketing Environment (cont.)

• Level of importance of any of the environmental
• factors will vary, depending on the nature of
  the
• firm, stage of development, time etc.
• Example Application of frameworks for cultural
  analysis.

23
Summary

• Analysing the global environment
• the process scanning, monitoring, forecasting
• assessing
• macroenvironment STEP/PEST
• Porters Diamond
• microenvironment
• industry Porters five forces
• markets
• company SWOT
• nature of firm consumer/industrial goods,
  services