CHAPTER 2

Marketing environment
Why should a company study marketing environment?
 Group assignment
Work in group of 8 in 20 minutes:
- Internal Public
➢ What’s your standpoint
- Suppliers
on the Thanh Ha Water
- Investors
Park business?
- Government
➢ What actions will you
- Media
take to defend your
- Customers
views?
- Local people
- Citizen-action Publics
(environmental organizations)
Why should a company study marketing environment?
 MARKETING CONCEPTUAL DEFINITION
Marketing as the process by which companies:
(Philips Kotler, 2017)
➢ Engage customers
➢ Build strong customer relationships
Marketing? ➢ And create customer value

In order to

→ capture value from customers in return.

 THE MARKETING PROCESS
Understand Design a Construct an Building
the Customer - Integrated profitable Capture
marketplace driven marketing relationships value from
and marketing program that and customers
Customer strategy delivers create to create
needs & wants superior value customer profits and
delight customer
equity
Marketing Environment

The actors and forces outside marketing that affect

marketing management’s ability to build and maintain
successful relationship with target customers

➢ Microenvironment
➢ Macroenvironment
Marketing Environment Macro-
Environment
▪ Demographic ▪ Technological ▪ Economic

▪ Political-Regulatory ▪ Socio-cultural ▪ Natural

Company Customers

Marketing mix- 4Ps

▪ Suppliers ▪ Resources of company Micro-

▪ Intermediaries ▪ Customers Environment
▪ Publics ▪ Competitors
Microenvironment
 Microenvironment
The actors close to the company that affect its ability to
serve its customers

➢ The company
➢ Suppliers
➢ Marketing intermediaries
➢ Customer
➢ Competitors
➢ and publics
 The company
Marketers must work in harmony with other company
departments to create customer value and relationships

➢ Top management
➢ Manufacturing
➢ Finance
➢ Legal
➢ Human resources
➢ R&D
 Suppliers

In creating value for customers, marketers must

partner with other firms in the company’s value
delivery network.

➢ Supplier problems can seriously affect marketing

 Intermediaries
Firms that help the company to promote, sell, and
distribute its goods to final buyers.

➢ Resellers Marketers recognize the

➢ Physical Distribution importance of working with
Firms their intermediaries as partners
➢ Marketing Services rather than simply as channels
Agencies through which they sell their
➢ Financial intermediaries products
 Competitors

Who are the competitors of the Honda SH mode brand?

 Competitors
A company must provide greater customer value and
satisfaction than its competitors do
 Publics
Any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives

➢ General public
➢ Financial Public
➢ Media Public
➢ Government Publics
➢ Citizen-action Public
➢ Internal Public
➢ Local Public
 Customers

➢ Customers are the most important actors in the

company’s microenvironment.
➢ The aim of the entire value delivery system is to
serve target customers and create strong
relationships with them
Macroenvironment
 Macroenvironment
The larger societal forces that affect the microenvironment

➢ Demographic
➢ Economic
➢ Natural
➢ Technological
➢ Political
➢ and cultural forces
Demographic
environment
– The study of human
populations in terms of size,
density, location, age, gender,
race, occupation, and other
statistics.

– Changing demographics mean

changes in markets and
marketing strategies
They tend to
appreciate marketers
who appeal to their
youthful thinking
rather than their
advancing age
 Demographic environment

➢ Baby boomers: The people born during the years following World
War II and lasting until 1964
➢ Generation X: The people born between 1965 and 1976 in the “birth
dearth” following the baby boom
➢ Millennials (or generation Y): The children of the baby boomers
born between 1977 and 2000
➢ Generation Z: People born after 2000 who make up the kids,
tweens, and teens markets.

Do brands need to create separate products and marketing programs

for each generation??
 Demographic environment

➢ Changing of the traditional household

➢ Geographic Shifts in Population
➢ Increasing Diversity
➢ …..
 Economic environment

Economic factors that affect consumer

purchasing power and spending patterns.
 Natural environment

The physical environment and the natural resources

that are needed as inputs by marketers or that are
affected by marketing activities.
+ From weather to natural disasters
+ Environmental sustainability concerns …
 Technological environment

Forces that create new technologies, creating new

product and market opportunities.
 Political environment

Laws, government agencies, and pressure groups

that influence and limit various organizations and
individuals in a given society.
 Political environment

Business legislation:
+ Protect companies from each other
 Political environment

Business legislation:
+ Protect companies from each other
+ Protect consumers from unfair business practices
+ Protect the interests of society against unrestrained
business behavior
 Cultural environment

Institutions and other forces that effect society’s basic

values, perceptions, preferences and behaviors
SWOT Analysis
 Why you need
SWOT analysis?

• Help decision maker and strategic planner understand clearly

about corporate’s internal/external situation
• Analyze the issues/problems which may lead to success/failure.
• Prevent costly mistakes
 Strengths Weaknesses
Include internal Include internal limitations
capabilities, resources and and negative situational
positive situational factors factors that may interfere
with the company’s
performance

Opportunities Threats
Are favorable factors or
Unfavorable external
trends in the external
factors or trends that may
environment that the
present challenges to
company may be able to
performance
exploit to its advantage
Strengths

• Things you/your business is good at

• Provide a clear competitive advantage over rivals
(competitors)
• Distinctive/core competencies and resources
• Should be protected and built upon.
• Some possible strengths: Market share, Technology, Economies
of scale, Leadership, Brand reputation and loyalty, High quality,
Financial resources, R&D..
To identify the strengths, ask…
• What advantages does your company have?
• What do you do better than anyone else?
• What unique or lowest-cost resources do you
have access to?
• What do people in your market see as your
strengths?
• What factors mean that you "get the sale"?
Weaknesses
• Things you/your business lacks or does poorly

• A source of competitive disadvantage → Places the business at

a disadvantage

• May hinder or constrain the business in achieving proposed

objectives

• Should seek ways to reduce or eliminate weaknesses before

exploiting further competition

• Some possible weaknesses: Low market share, undifferentiated,

outdated technology, poor quality, lack of innovation, a weak
brand name, High costs…
To identify the weaknesses, ask…

• What could you improve?

• What should you avoid?
• What are people in your market likely to
see as weaknesses?
• What factors lose you sales?
 • Things that create the chance to make greater
Opportunities profits or get better business results.
• Arises when an organization may take benefits from
the external environment.
• Should be recognize the opportunities to improve
the business situation.
• Opportunities always coming along with the risks
• Possible opportunities: Technology, higher economic
innovation growth, new demand, new market, trade
liberalization, market growth/diversification, social
or lifestyle change, government spending programs.
To identify the opportunities, ask…

• Where are the good opportunities

facing you?
• What are the interesting trends you
are aware of?
 • Things may harms or trouble you/your business
Threats
• Any external factors that may hinder or prevent
you/ your business from achieving proposed
objectives or place the business at risks.
• Threats are not controllable
• Some possible threats: New market entrants ,
economic downturn, change in consuming
behaviors, the rise of low cost tastes or needs
production abroad, higher or unstable input
sources/prices, new regulations, competitive
pressure
To identify the threats, ask…
• What obstacles do you face?
• What are your competitors doing?
• Are quality standards or specifications for your job,
products or services changing?
• Is changing technology threatening your position?
• Do you have bad debt or cash-flow problems?
• Could any of your weaknesses seriously threaten
your business?
How to conduct a SWOT analysis for your business

What do you do Where do you need

well? to improve?

What are your What obstacles do

goals? you face?
SWOT Analysis layouts

Strengths Weaknesses
• … • …
• … • …

Opportunities Threats
• … • …
• … • …
 Mistakes of SWOT

• An unclear goal
• Developing long lists.
• Labeling items "strengths” even if you aren’t any better than the competition.
• Conducting biased assessments.
• Confusing strategies and opportunities. A strategy is an action. An opportunity is an
event or condition that exists independent of your actions.
• Ignoring the internal and external environment factors identified when evaluating
strategies
Tips

• Be realistic
• Be specific and fair in evaluation.
• Keep your SWOT analysis short and simple. Avoid the
complexity
• Distinguish between where your organization is today and
where it could be in the future
 Formulate strategies from SWOT

• SO strategy: Strengths and Opportunities –

Use Strengths to take advantages of
opportunities
• WO strategy: Weaknesses and opportunities –
Over come weaknesses by taking advantages
of opportunities
• WT strategy: Weaknesses and Threats:
Minimize the Weaknesses and avoid Threats
• ST strategy : Strengths and Threats – Use
strengths to avoid
Activities
• Choose a product/service
• Discuss the factors (marketing
environment) affecting to your
marketing activities
• Give SWOT analysis & Strategy
form SWOT for your
product/service and your
proposed business