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Unit 4 Macro And Micro Environmental Factor Assignment
Diploma in Business (Marketing)
Unit Number and Title
Unit 4 Macro And Micro Environmental Factor
1.1 Explain the various elements of the marketing process
There are various definitions of marketing some of which has been described below. According to the chartered institute of marketing, marketing is a management discipline that enables a company to determine the needs and aspiration of a customer and fulfil the same with a proper product or service. It is the whole process of anticipating and identifying the needs and requirements of a customer and to supply something that fills the gap thereby making a handsome profit in the process. According to the American marketing association, marketing is the process of creating and delivering something of value to the customers so as to fulfil their needs and demands and in this process of exchange bring about a whole transformation in the way customers are offered goods and services (Henderson, 2005). According to Philip Kotler marketing is the process by which something of value is exchanged between the firm and the customers and all the activities that are connected to some sort of value creation (Kotler, 2008).
The marketing process are the steps that the organisation undertakes to collectively identify the unmet needs and requirements of a customer or groups of customer and then offering a product to satisfy that particular need. The marketing process consists of conducting a situational analysis of the internal and external, macro and micro factors that affect the firms production and selling decisions, developing marketing strategy, developing the marketing tactics and finally the implementing the plan with suitable marketing tools like advertising and promotion. Situational analysis is the first step in the marketing process and it consists of studying the environment with reference to the past, present and the future with the help of analytical tools like porter’s five forces, PESTEL and Swot analysis. Before developing the marketing strategy the first thing to do is to make a market research study and then decide on the target market and match them with the salient features of the product (Dalgic, 2006). The key decision at this stage would involve segmentation and positioning strategy in which sections of the target audience that would be using the product would be identified and the product would be suitably placed before them to check out if it meets their criteria and objectives of consumption (Doyle, 2009). Then next step of the plan is to design the marketing tactics or in other words indentifying the controllable aspects of the marketing mix like promotion, product, pricing and decisions related to the distributing of the product or the service.
1.2 discuss the benefits of cost and marketing orientation for a selected organisation
In marketing parlance marketing orientation is the collection of beliefs and paradigms that guide organisations in their activities and day to day operation of the business. The marketing orientation of a organisation like the Ford Motor company could be classified into certain broad based concepts like production concept, product concept, selling concept and societal marketing concepts. According to the production concept customers would prefer products that are easily available and affordable to purchase. Thus for Ford Motor Company the organisation has to streamline its production in such a manner that the customers can have the cost benefit of large scale production operations. By paying attention to the production process costs saving could be passed on to customers in terms of affordable prices of cars that are available in the market (Dalgic, 2006). The customers want cars that are available and inexpensive. Hence the company must pay its attention to the production process so as to cut wastage and keep the costs down. The main focus of the organisation would be to improve the production efficiency so as to have a direct control over the costs. According to the product concept consumers are most willing to buy products that have high quality and innovative features and are affordable at the same time. Thus the organisation like the Ford Motor Company must continuously strive to make product improvements and to manufacture cars that suit the changing driving needs of the customers. The selling concept advocates that the organisation should aggressively pursue the customers with their product offerings because if left alone they would not buy enough of the firm’s products or services to justify the huge investment in terms of capital and labour (Goulding, 2005). Thus it is necessary to give the customers some sort of incentives to buy the products in terms of discounts during the festive season and so on and so forth. The firm should convince and persuade the customers to make the purchase of its products and services through widespread promotional and advertising campaigns.
A strong marketing orientation comes with significant costs as much time and money is spent in studying the buying patterns and behaviour of customers in relation to the product being sold through extensive market research and knowledge inputs from various groups of customers. Often the companies like Ford have to modify their business operational processes to suit the changing nature of customer demand and requirements. The companies have to invest heavily in building the technological infrastructure so as to develop state of the art products that will catch the attention of the customers and offer product features which the competitors are unable to offer (Doyle, 2009). Companies need to match the product and services offering with that of the competitors and give the best of what is required to the customers. All these require a lot of investment from the part of the company and if it does not sell enough of products then it would not be able to recover the costs.
2.1 Show the micro and macro environmental factors that influence marketing decisions.
Among the micro factors include the company’s own strength and weaknesses in their own area of expertise and also vis-a-vis their competitors. The strength could be in the area of its technical dominance of its products or services or in the superiority of their marketing strategies. Then there are some opportunities in the target market like a nascent market which is growing by leaps and bound and offers a huge customer base for the company’s product and services. Then there can be threats like political instability and change of government rules and regulation of the host country (Kotler, 2008). The macro factors include the political and the legal factors that have a bearing upon the business. For example in India there was a decade of rule of a coalition government that were opposed to reforms in the business sector like approval of foreign direct investment in certain sectors like retail, energy and railways that was making the ground uncertain for business environment (Henderson, 2005). Also in the UK the happening of Brexit has thrown the business prospects of many firms into uncertainty as far as the trade and commerce rules and regulations are concerned. Similarly the state of the economy of the country plays a significant role in the marketing decisions of the company (Doyle, 2009). For example in a booming and growing market the businesses have a lot of opportunity for business expansion and entry into new markets which is not possible if the country is going through a slowdown or a recession. Also the social factors play a role in the marketing decision of a firm. For example if the country has a relatively young population then the product mix would have to be different than if the country has a ageing population (Dalgic, 2006). Hence all these macro and micro factors affect the marketing decisions for a company from time to time since these conditions are usually volatile and keep on changing frequently.
2.2 propose segmentation criteria to be used for marketing of different products
For planning an effective marketing strategy for Ford it has to segment the consumer market according to the tastes and preferences and consumption pattern of the public. For example the fast sports cars should be targeted at the young and rich population who have the habit of buying such type of cars. The cars that are meant for the young people should have a high pickup and a swanky look as opposed to the cars that are meant for family persons who need a lot of space and must have additional safety features to prevent accidents. Thus the cars should be built according to the needs and requirement of that segment of the customers for whom it is meant to be bought and used (Goulding, 2005). Also the fast and fancy cars of Ford should have all the features that go with the mentality of the younger generation of customers like speed and sexy looks. For cars that are meant for older people with families large space and adequate safety features are the segmenting criteria and hence those cars should be built according to the needs and demands of that category of customers. This in short is the segmentation criteria that the company must keep in mind before investing millions of pounds in designing the right type of car for the right people (Doyle, 2009).
2.3 choose a targeting strategy for the right type of products and services.
After the Ford motor company has identified the segments of the market then it must target a group of customers in that segment and try to match the products with the needs and aspirations of that category of buyers and customers. The different type of targeting strategy available at the disposal of the ford motor company are differentiated marketing , undifferentiated marketing and focused marketing strategies. In differentiated marketing strategy there is a single marketing mix for different segments of the markets (Kotler, 2008). This kind of marketing strategy is suitable for Ford in the emerging markets where there are a lot of competitors and there are considerable risks associated with having a huge marketing budget for an undifferentiated marketing strategy that has a separate marketing mix for different segments of the consumer market. There are two broad categories of consumers in the emerging market, the rich and the lower class with huge differences in their respective spending capacity (Doyle, 2009). Thus cars which are meant for the rich can be of certain type with a lot of customised features while the cars meant for lower classes can be of a generic type with few demarcations in the marketing mix.
2.4 show how buyer behaviour affects the different marketing activities according to the various buying behaviour.
The marketing plans need to be developed according to the buying and consumption patterns of the customer groups. For example the rich people in the UK like fast cars with a lot of advanced features like automatic gears and central heating and cooling and other safety features. The common masses on the other hand just want some vehicle that they can use to move about like getting to the place of their work. Hence their needs and wants are different and so the companies need to be aware of this fact before they match the marketing campaigns of different products with the salient features of the product itself. Also the pricing decisions have a direct impact on the buying behaviour of the general consumer (Dalgic, 2006). Thus marketing activities should be conducted so as to fulfil the gaps in the needs and demand of the consumer with a suitable product.
2.5 Propose new positioning for the selected product or service
A positioning strategy aims to build a distinctive image of a product in the minds of the target group of consumers. For example when we talk of social networking the image that immediately comes to our mind is that of Face Book. Similarly when we talk of fast cars the image of Ford Mustang comes to the minds of the customers. Thus to build this kind of image in the minds of the consumer the marketers have to pay special attention to special attributes of a product that hangs on the minds of the consumer when they see it. An effective positioning strategy involves identifying and capitalising on the unique selling proposition of the product like the classic and monstrous looks of a ford mustang or a formidable and sturdy looks of a Ford Mazda (Henderson, 2005).
3.1 explain how products are developed to sustain competitive advantage
In the competitive world of banking industry it is essential to design the products like fixed deposits, savings deposit and also loan products keeping in mind the needs and requirements of the target group of customers. In an industry where one bank is competing against a large number of banks the products should be attractively designed to beat competition and make it possible for the bank to capture larger share of the market. For example the bank designs the retail loans like car loans and home loans keeping in mind the payoff ability of each customer. It designs tailor made and customised products to suit the needs of its esteemed retail customers (Kotler, 2008). For example during the festive season during the end of the year a lot of people buy gifts for their loved one, or buy cars or households start building new homes. Thus during this time the banks come up with a lot of innovative and hassle free loan products with attractive rates of interests and longer payback periods. This makes the equated monthly instalments of the loans cheaper and thus more and more households are encouraged to take loans.
3.2 explain how distribution is arranged to meet customer convenience
The retail loans of the banks like the car loans and the housing loans are available in all branches of the bank for the sake of availability so that the customers can easily avail the services of the bank. The customers just have to place a call in the helpline number and the bank executives would go to the customers house to sign the necessary documents to open a savings bank account or a fixed deposit accounts. Also the bank has tie ups with many corporate through which it disburses housing and car loans to the employees of that company. All this has been done keeping in mind the convenience of the customers (Goulding, 2005). The customers enjoy ATM and net banking facilities so that they can deposit or withdraw or transfer money without even having to visit their respective home branch. Also for corporate loans the bank executives visit the various companies who wish to avail of these loans and all the terms and conditions of such loans are clearly explained to the customer before the loans are given. Thus in this way the banks distributes its services and products to the customers.
3.3 Explain how prices are set to meet organisational goals and objectives
The prices of the banking products and services depend on the guidelines set by the central bank of England. For example if the central banks increases or decreases the interest rates then the bank makes proper adjustments in its fixed deposits, savings bank, and loan rates accordingly to reflect the changes made by the central bank (Doyle, 2009). Also the prices of various products and services as also other terms and conditions are set according to the prices set by popular competitors who are operating in the same banking industry. The prices depend on the macro economic factors like overall demand and supply, inflation and also the level of liquidity existing in the market. During economic boom when the prices are low the quantity demanded becomes large and level of consumption and household spending goes on increasing (Henderson, 2005). On the other hand when the economy is slowing down the prices go up and the level of consumption and spending goes down. Thus the state of economic condition of the country also has a say in determining the prices of the financial product of the bank.
3.4 Explain how promotional activities are integrated to achieve marketing objectives
Promotional activity is aimed at reminding the customers of the unique selling proposition of the banking products and persuading them to buy the products after giving them so sort of attractive incentives like discounts and gifts etc (Goulding, 2005). Without promotion the brands will lose their visibility and the products will not sell enough to cover the costs and to make a profit. The promotional mix of the banking products and services consists of personal selling by the relationship executives of the bank, cross selling of the banking products and also advertising campaigns. These activities are aimed at sending and communicating the right message about the bank’s products and services to the customers and persuading them to come and check for themselves (Kotler, 2008). For example offering home and car loans at attractive interest rates during the year ending festive season is also an example of promotional activity whereby the customers are made aware of the various offerings given by the bank on each of its products and services. Incentives are offered for a limited period of time enabling the customer to avail of the services of the bank in terms of its products.
3.5 analysing the elements of the extended marketing mix
The elements of extended marketing mix are people, process and physical evidence. Companies interact with their customers through their employees and hence the attitude of the employees determines the success or failure of the marketing campaign of the product or service of the bank. Quite often the customers get a first impression of the bank through the courteous behaviour of its customer service representatives (Dalgic, 2006). Thus having trained staff on the rolls of the bank offers it a high degree of competitive advantage. The frontline staff and the employees are often the first contact points of the bank with its loyal customers. The process is a series of steps that are followed by the bank to provide a service to the customer like teller services, ATM services and passbook printing services. The process should be streamlined to minimise waiting time and maximise customer involvement.
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