MARKETING
ENVIRONMENT
UNIT 2
COMPONENTS OF
BUSINESS ENVIRONMENT
IMMEDIATE/MICRO ENVIRONMENT
• In order to attain the goal of profitably satisfying specific needs of chosen target market,
companies link themselves with many players in the market. All these actors that directly affect
the functioning of the company an are controllable to the company constitute internal or micro
environment
– Suppliers: timely + price + quality = right product
– Competitors: competitors’ analysis
– Intermediaries: middlemen, distributor, marketing agency, financial intermediary
– Customers: consumers, resellers, business, government, international
– Public: interest groups
• The quality of these factors determine the strengths and weaknesses of the company
MACRO ENVIRONMENT
• The actors of micro environment operate in a larger macro environment of forces and
megatrends that shape opportunities and pose threats to the company.
• These forces represent uncontrollable which the company must monitor and respond to. The
major forces are:
– Political: local and foreign government activities, stability, policy
– Economic: changes in interest rates, economic condition of the market
– Socio-cultural: changing attitudes and values of customers
– Technological: impact of change in business processes and consumer behavior
– Legal: legislative issues concerning business
– Ecological: conducts that do not harm the environment
SWOT ANALYSIS
DELL COMPUTER
• In the mid-1990s, Dell Computer used a SWOT analysis to create a strong business strategy
that has helped it become a very strong competitor in its industry value chain.
• Dell identified its strengths in selling directly to customers and in designing its computers and
other products to reduce manufacturing costs.
• It acknowledged the weakness of having no relationships with local computer dealers.
• Dell faced threats from competitors such as Compaq and IBM, both of which had much
stronger brand names and reputations for quality at that time.
• Dell identified an opportunity by noting that its customers were becoming more
knowledgeable about computers and could specify exactly what they wanted without having
Dell salespersons answer questions or develop configurations for them. It also saw the internet
as potential marketing tool.
STRATEGY IMPLEMENTED
• The strategy that Dell followed after doing the analysis took all for of the SWOT elements into
consideration. Dell decided to offer customized computers built to order and sold over the
phone, and eventually, over the internet. Dell.Äôs strategy capitalized on its strengths and
avoiding relying on a dealer network. The brand and quality threats posed by Compaq and IBM
were lessoned by dell’s ability to deliver higher perceived quality because each computer
was custom made for each buyer
COMPETITOR’S ANALYSIS
1. Identify current and future Direct
competitors in market competition
2. Finding market share
3. Performing SWOT analysis Indirect
4. Build competition portfolio competition
5. Plan strategies
Phantom
6. Follow up
competition
SEGMENTATION TARGETING AND
POSITIONING
• SEGMENTATION: a process of dividing the whole market into segments based on the
differences in characteristics of the buyers.
• TARGETING: a process of selecting the most appropriate segment for the product and
directing the efforts and resources towards it.
• POSITIONING: a strategy for a brand in order to occupy a distinct position in the market
and the mind of a customer with respect to its competitors;
(e.g. move/iodex; krack/burnol; set-wet/brylcream; fog/deodrants; layers shot – wottagal)
PERCEPTUAL MAPPING
BASES OF MARKET SEGMENTATION
SEGMENTATION PROCESS
• Identify market segments
– Bases: geographic, demographic, psychographic, behavioral
• Develop profiles for each segment: characteristics, similarity
• Evaluate market segments: feasibility, size, cost, profitability, competition
• Select best market segment: single, multiple
• Develop a positioning strategy: differentiation
• Focus on marketing program: marketing mix components
TARGETING STRATEGIES
• Single segment concentration
• Selective specialization (multi segment)
• Product specialization
• Market specialization
• Full Market Coverage (undifferentiated market)
POSITIONING STRATEGIES
“Positioning refers to the place a brand occupies in the mind of the prospects”
• Attribute positioning (bikes)
• Pricing as a positioning strategy (clothes)
• Positioning based on user (STC; Cigarettes)
• Positioning based on occasion (Dairy Milk)
• Positioning based on product class (Fair n Lovely)
• Positioning based on cultural symbols (Air India; Wai Wai)
• Positioning based on competitors (Colgate -Pepsodent)
