Overview of marketing

1. Welcome to:
Principles of Marketing
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2. Chapter contents
oMarketing and
its core concepts
oMarketing
Process
oScope of
marketing
oCompanies’
orientation to
wards the
market place
Objectives of the
chapter
• Define what is
marketing
• Identify and discuss
core customer
and market place
concepts
• Explain the
marketing
Orientations/philo
sophies towards
the marketplace
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3. Chapter One: Marketing Defined
– Today’s successful companies are strongly customer
focused and heavily committed to marketing.
– Marketing, more than any other business function, deals with
customers.
– Many people immediately think the term marketing as selling
and advertising. But these are part of a larger “marketing
mix”—a set of marketing tools that work together to
satisfy customer needs and build customer relationships
– Marketing must be understood not in the old sense of
making a sale—“telling and selling”—but in the new sense
of satisfying customer needs. But marketing is more than
telling and selling
– If the marketer understands consumer needs; develops
products that provide superior customer value; and prices,
distributes, and promotes them effectively, these products will
sell easily
– Marketing focuses on satisfying the need of customers
– Marketing is the process by which companies create
value for customers and build strong customer
relationships in order to capture value from customers
in return.
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4.  Marketing Defined…
– Marketing is a social and managerial process by which
individuals and groups obtain what they need and want
through creating, offering and exchanging value
freely with others (Kotler).
– It deals with identifying and meeting human and
social needs. Or
– Simply marketing is meeting needs profitably.
– Marketing includes anticipating demand, which
requires a firm to do customer research on a regular
bases so that it develops and introduces products that
are desired by consumers.
– marketing is the process of planning & executing the
conception, pricing, promotion & distribution of ideas,
goods & services to create exchange that satisfy individual
& organizational goals (American Marketing
Association)
– The two-fold goal of marketing is to attract new
customers by promising superior value and to keep
and grow current customers by delivering
satisfaction
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5. From the definitions given above, we can derive
the following important points:
– Marketing is about creating strong relationship (In
strong relationship customers will be okay to pay
more, they will come again and again, tell and
bring their friends, provide good feed back and
patient for the mistake made by the company)
– Creating superior Values for customers
– Marketing generates and facilitates exchange
– Marketing is greater than selling.
– Marketing is an integrated activity.
– Marketing is concerned with customer satisfaction.
– The concept of marketing lies on needs, wants,
and demands of customers.
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6.  Marketing Process
– Marketing is the process of communicating the value of a
product to customers, for the purpose of selling that product
(goods or services).
– It consists of Five stages for creating and capturing customer
value as shown below.
1. Understand the market place and Customer needs/
wants
2. Design a customer driven marketing Strategy
3. Construct an integrated marketing programs
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and
customer quality
 The first four steps create value for customers.
 First, marketers need to understand the marketplace and customer needs
and wants.
 Next, marketers design a customer-driven marketing strategy with the goal
of getting, keeping, and growing target customers.
 In the third step, marketers construct a marketing program that actually
delivers superior value. All of these steps form the basis for the fourth step,
i.e. building profitable customer relationships and creating customer
delight.
 In the final step, the company acquires the rewards of strong customer
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7. Marketing Process….
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8. Understanding the Marketplace and Customer
Needs
• Marketing is all about creating value for customers.
– So, as the first step in the marketing process, the company must
fully understand consumers and the marketplace in which it
operates.
– There are five core customer and market place concepts:
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9. 1. Customer Needs, Wants, and Demands
The starting point for the discipline of marketing lies in human
needs and wants and the marketplace in which they operate.
a. Needs:
is a state of felt deprivation of the basic human requirements.
Marketers did not create these needs; they are a primary part
of the human makeup.
Exist in the very nature of human biology, thus not created
by society or by marketers. Examples:-
o Basic physical needs for food, cloth, air and shelter;
o Social needs for belonging and affection
b. Wants:
are desires for specific satisfiers of deepest needs. Beyond
the basic needs, people have a strong desire for particular
versions of basic goods and services.
Wants are shaped by culture and individual personality such as
families, schools…
One person may like a burger or fish; another might like Enjerra,
kitfo, shiro, pizza. Individuals’ cultural and social features shape
the wants
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10. c. Demands
– are wants for specific products that are backed up by an
ability and willingness to buy product.
– Wants become demand when supported by purchasing
power
– People have unlimited wants but limited resources. They,
therefore must measure not only how many people want
their product, but also how many would actually be willing
and able to buy it.
– Example: many people want a Mercedes; but only a few are
able and willing to buy.
– Demand= Willingness to pay + Ability to pay
– Best marketing companies conduct consumer research to
learn about and understand their customers’ needs,
wants, and demands.
– They analyze customer complaints, inquiries, warranty,
and service data.
– A clear and detailed understanding of the needs, wants, and
demands provide useful information for designing marketing
strategies.
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11. 2. Marketing Offerings (Products)
– Consumers’ needs and wants are fulfilled through a market
offerings—some combination of products, services, information, or
experiences offered to a market to satisfy a need or a want.
– Market offerings are not limited to physical products. They also
include services—activities or benefits offered for sale that are
essentially intangible and do not result in the ownership of anything.
Examples include banking, airline, hotel…
– Product is any thing offered to the market to satisfy a need
3. Customer Value and Satisfaction
 Customer Value
– Customer value is the difference between the values the customer
gains from owning and using a product and the costs of obtaining
the product.
– Cost is the amount of money that is going to be expended or
already incurred to acquire a product.
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12.  Customer satisfaction
– The extent to which a product’s perceived performance
matches a buyer’s expectations
– If the product’s performance falls short of expectations, the
buyer is dissatisfied.
– If performance matches or exceeds expectations, the buyer
is satisfied or delighted respectively.
– Satisfied customers buy again and tell others about their
good experiences.
– Dissatisfied customers often switch to competitors and
disparage the product to others.
– Therefore; Outstanding businesses should keep their
customers satisfied to make repeat purchases & tell
others about their good experiences with the product,
b/c Customer value and customer satisfaction are key
building blocks for developing and managing customer
relationships.
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13. 4. Exchange, Transaction and Relationship
Marketing occurs when people decide to satisfy needs and wants
through exchange relationship.
• Exchange is the act of obtaining a desired product from
someone by offering something in return.
– Marketing consists of actions taken to create, maintain, and
grow desirable exchange relationships with target audiences
involving a product, service, idea, or other object.
– Companies want to build strong relationships by consistently
delivering superior customer value.
o In business marketing concept, for an exchange to occur, the
following conditions must be satisfied.
– At least 2 parties must participate
– Must have something of value to exchange(product or
money
– Each of them must be able to communicate and deliver
– Each party must be free to reject or accept the others offer
– Each party believes it is appropriate or desirable to deal with the
other party
 Unless these conditions are fulfilled, the exchange cannot take
place
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14. Transaction
A transaction takes place if an agreement is reached between two parties
involved in the exchange
In a transaction, one party gives A to another party and gets B in return
Is a trade between two parties that involves at least two things of value,
agreed-upon conditions, a time of agreement and a place of
agreement.
– For example, a buyer pays birr 20,000 for a Samsung Mobile. This
is a typical momentary transaction.
– But all transactions do not involve money.
– For example, in a barter transaction, one might trade an old
Washing machine in return for secondhand furniture.
Exchange is an agreement, while transaction is an instance
of give and take
Transactions lead marketers gradually to relationship
marketing.
 Relationship marketing is the process of creating, maintaining,
and enhancing strong, value-laden relationships with
customers and other stakeholders.
Beyond simply attracting new customers and creating
transactions, companies want to retain customers and grow their
businesses. Marketers want to build strong relationships by
consistently delivering superior customer value.
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15. 5. Market
– The concepts of exchange and relationships lead to the concept of a
market.
– A market is the set of actual and potential buyers of a product or
service. Marketing means managing markets to bring about profitable
customer relationships.
Fig1.1: Simple Marketing System
– The above fig. indicates sellers and the buyers are connected by four
flows. The sellers send products, services and communications to the
market; in return, they receive money and information. The inner loop
shows an exchange of money for goods; the outer loop shows an
exchange of information.
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16. Marketing Process…
2nd Step: Designing a Customer Value-Driven Marketing
Strategy
o Once it fully understands consumers and the marketplace, marketing
management can design a customer value-driven marketing strategy.
o The marketing manager’s aim is to find, engage, keep, and grow
target customers by creating, delivering, and communicating
superior customer value.
o To design a winning marketing strategy, the marketing manager must
answer two important questions:
i. What customers will we serve (what’s our target market)? –
– Good marketing companies know that they cannot serve all
customers in every way. Instead, they need to focus their resources
on the customers they can serve best and most profitably (market
segmentation ).
ii. which segments it will cultivate (target marketing)
iii, how it will serve the target customers—how it will differentiate
and position itself in the marketplace.
Here, the marketer outlines a value proposition that spells out what
values the company will deliver to win target customers
NB: In detail, we will discuss this stage in chapter four
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17. Marketing Process…
3rd step: Construct an Integrated Marketing
Program
– Once marketing strategy is chosen, the company
now constructs an integrated marketing
program—consisting of a blend of the four
marketing mix elements—the four Ps—that
transforms the marketing strategy into real value for
customers.
– The company develops product offers and creates
strong brand identities for them.
– It prices these offers to create real customer
value and
– distributes the offers to make them available to target
consumers. Finally,
– the company designs promotion programs that
communicate the value proposition to target
customers and persuade them to act on the
market offering
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18. Marketing Process…
4th step: Build Profitable Relationships and Create Customer Delight
This practiced to create customer satisfaction and delight through:
– Customer relationship management: build strong relationships with
chosen customers and
– Partner relationship management: build strong relationships with
marketing partners
5th step: Capturing Value from Customers
– The first four steps in the marketing process involve building
customer relationships by creating and delivering superior customer
value.
– While the final step involves capturing value in return in the form of
current and future sales, market share, and profits.
– By creating superior customer value, the firm creates highly satisfied
customers who stay loyal and buy more. This, in turn, means greater
long-run returns for the firm.
– Creating customer value results to customer loyalty and
retention, share of market and share of customer, and customer
equity
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19.  What is Marketed (Scope)?
– people market 10 types of entities:
A. Goods
– Anything that can be offered to someone to satisfy a need or
want
– Tangible good people can buy, sell, and own. Purchasing a
classic iPod, refrigerators, television sets, food products,
machines
B. Services
– Intangible product or market offering
– Inseparable, and they can not be saved and stored
– A haircut is a service, Banks, Airline, Hotel, professionals etc.
C. Idea
– Intangible value proposition
– Ex- Every market offering includes a basic idea. “In the factory,
we make cosmetics; in the store we sell hope.”
D. Information
– Can be produced and marketed as a product, for instance
encyclopedia, news-papers, Google, Facebook, magazines,
Notification box etc..
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20. What is Marketed? (Scope)….
E. Place
– Like cities, state, region, compute activities to attract tourists,
factories, company headquarters…
F. Events
– Marketers promote time based vents
– Such as trade-shows, exhibitions, Sport-events etc.
G. Persons
– celebrity marketing - famous persons promote themselves
H. Experiences: travels, climbing Mount Everest
I. Properties: -
– Intangible rights of ownership of either real property or real
estate or financial property (stocks and bonds)
J. Organization: -
– Actively work to build a strong favorable image in the mind of
their publics. For example, Phillips advertises with the
tagline, “let us make things Better.”
– Universities, museums boost their public images to compete
more successfully for advances and funds.
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21.  Company Philosophies/ Orientations Towards the
Marketplace
There are five competing concepts under which
organizations conduct their marketing activity.
A. Production Concept:
– This concept holds that consumers will favor those
products that are widely available and low in cost.
– Consumers are more interested in obtaining the
product than its features and when a company wants
to expand the market.
– The famous remark: "Supply creates its own
demand.“
– Companies stressed mass production and efficiency-
producing as much as possible at as low a cost as
possible
– Marketing efforts were based on securing the wide
distribution coverage
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22. Philosophies….
B. Product Concept:
– Consumers will prefer those products that have the most
quality, performance, with innovative good features.
– Managers in this product oriented organizations focus their
energy on making quality products and improving them over
time.
– The product concept leads to “marketing myopia”- a focus
on the product greater than on the customer’s need
– Marketing myopia- a short-sighted and inward looking
approach to marketing that focuses on the needs of the
company (e.g., product) instead of defining the company
and its products in terms of the customers' needs and
wants.
– It results in failure to see and adjust to the rapid changes in the
market
– The concepts of the product era remain important in
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23. C. Selling Concept:
– Under this concept, marketing managers assume that
consumers purchase products if the organization undertakes
an aggressive selling and promotion effort.
– Most firms practice the selling concept when they introduce new
products and when they have over capacity.
– It also practiced with unsought goods -those that buyers do not
normally think of buying such as encyclopedias or insurance.
– Focuses primarily on the selling/promotion of a particular
product, and not determining new consumer desires as
such.
– Consequently, this entails simply selling an already existing
product, and using promotion techniques to attain the highest
sales possible.
– It is product oriented- it takes an inside-out perspective. It
starts with the factory, focuses on existing products, and
calls for heavy selling and promoting to produce
profitable sales.
– The aim is to sell what they make rather than make what
the market wants.
– Therefore, firms emphasize and direct their effort on promotion
and selling of their products.
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24. D. The Marketing Concept
– Managers who follow this concept assume that the key to
achieving organizational goals lies in determining the
needs and wants of consumers and delivering or
providing the desired satisfaction, more efficiently and
effectively, than competitors.
– The selling concept focuses on the needs of the seller;
whereas the marketing concept focuses on the needs
of the buyer
– The marketing concept takes an outside-inside
perspective-
– It starts with a well-defined market, focuses on
customer needs, coordinates all the marketing
activities affecting customers and makes profits
by creating long-term customer relationships
based on customer value and satisfaction.
– It is a separated and segmented consumer
centered philosophy
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25. E. Societal Marketing Concept:
– Social Marketing-is the contemporary approaches.
– It Pays attention to the best long- run interest of the
customers and society
– It has similar characteristics as marketing orientation but
with the added proviso that there will be a restriction of
any harmful activities to society, in either product,
production, or selling methods.
• Example-Tobacco, Chat, and drinking alcohol
business is not a concept of Social Marketing
– It holds that the organization should determine the
needs, wants, and interests of the target markets and
deliver the desired satisfaction more effectively and
efficiently than competitors in a way that maintains or
improves the customer’s and the society’s well-
being.
– The societal marketing concept calls for balancing all
three considerations-company profits, consumer
wants, and society’s interests.
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26.  What is Marketing Management?
o Marketing Management is the art and science of
choosing target markets and getting, keeping, and
growing customers through creating, delivering,
and communicating superior customer value.
o By analysis of the customer and the environment,
marketers plan and develop products, prices,
promotion, and distribution and go for execution
by assuming a certain desired level of demand.
o Marketing management is concerned not only with
finding and increasing demand, but also with
changing or reducing it.
o Simply put, marketing management is demand
management
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27.  Marketing and Demand Management
– Since marketing management involves influencing the level,
timing and composition of demand for the company’s product,
sometimes it is also known as demand management.
– Market demand is the total amount of goods and services
that all consumers are willing and able to purchase at a
specific price in a marketplace
– There are 8 different types of demand
1. Negative Demand:
– Negative demand is a type of demand which is created if
the product is disliked in general.
• Examples- seat belts, vaccination etc.
– The corresponding marketing task is to analyze why the
market dislikes the product and whether product redesign,
lower price, or more positive promotion can change the
consumer beliefs and attitudes.
– These marketing task or activity is known as conversional
marketing which tries to change people’s want rather than
serve their wants.
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28. Demand Management….
2. No demand:
– This is occurred when consumers neither like nor
dislike the product or being indifferent towards the
company’s offer.
– Target customers may be unaware of or
uninterested in or indifferent to a particular product.
• example, farmers may not have interest about a
new farming method.
– Marketing managers are concerned with finding
ways to connect the product’s benefits with the
user’s needs and interests.
– This marketing task is known as STIMULATIONAL
marketing- it tries to stimulate a want for an
object in people who initially have no knowledge or
interest in the product
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29. Demand Management….
3. Latent Demand:
– occurs when consumers are not satisfied with
existing products and is looking for new products.
– Examples; need for harmless cigarettes, safer
neighborhoods, more fuel-efficient cars, etc.
– Effective product planning and development, and
the marketing task is called developmental marketing
4. Falling (Declining) demand:
– A situation that occurs when potential buyers of a product
start to purchase it less often or stop purchasing it
– The marketer must find the causes of market decline and
re-stimulate demand by finding new markets, changing
product features, lowering price, creating more effective
communication or building favorable product image.
– the marketing task is remarketing/reverse demand.
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30. 5. Irregular Demand:
– It is a state in which the timing pattern of demand is marked by seasonal
and volatile fluctuations causing problems of idle capacity and overworked.
i.e.
– Either becomes idle in times of low demand or overwhelmed in times of
high demand.
– For example museums are under-visited during weekdays and
overworked during weekends.
– The corresponding marketing task is Synchro Marketing, i.e., find
ways to alter the time pattern of demand through flexible pricing,
promotion and other incentives to match the time pattern of supply.
6. Full Demand:
– It is a state where the current level and timing of demand is equal
to the desired level and timing of demand.
– that the demand is meeting with the supply potential of the
company. (Demand=Supply).
– The marketing task is Maintenance marketing and is designed to
maintain the current level of demand
– The organization maintains it, and continually measures
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31. 7. Overfull Demand: This demand happens when company's
manufacturing capacity is limited but the demand is more than
supply. (Demand > the Supply capacity)
– The marketing task is called DEMARKETING and its task is
finding ways to reduce the demand temporarily, or
permanently.
– De-marketing involves such actions as raising prices and
reducing promotion and service.
8. Unwholesome Demand:
– Is demand for things that most people perceive as bad.
– Products that have undesirable social consequences such as
cigarette, alcohol, hard drugs, are normally considered as
harmful.
– The corresponding marketing task is known as counter
marketing.
– Aims to destroy Demand, using fear messages, reduce
availability, Set high price and cautionary labels such as
“tobacco damages health” and communicate the negative impact
of the product.
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32. Chapter Two
Analyzing Marketing Environment
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33. Chapter Objectives
Upon the completion of the unit, students should be able
to:
– Define marketing environment
– Describe the environmental forces that affect the
company‘s ability to serve its customers.
– Explain how changes in the demographic and
economic environments affect marketing decisions
– Identify the major trends in the firm‘s natural and
technological environments.
– Explain the key changes in the political and
cultural environments.
– Discuss how companies can react to the
marketing environment
– Explain how changes in macro factors (such as
demographic, economic, and political) affect
marketing activities.
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34.  What is Marketing Environment?
– Marketing environment consists of the actors and
forces outside marketing that affect marketing
management‘s ability to build and maintain
successful relationships with target customers.
– It refers to “the aggregate of all conditions,
events and influences that surround and affect
business”. - Davis Keith
– Environment scanning is a process of
monitoring, forecasting, assessing &
collecting information about various internal &
external factors influencing a marketing firm.
– Excellent companies take an outside-inside view
of the business and monitor the changing
environment continuously
– Successful companies recognize and respond
effectively to trends in marketing environment.
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35. What is Marketing Env’t…
– More than any other group in the company, marketers
must be environmental trend trackers and opportunity
seekers.
– Although every manager in an organization should watch
the outside environment, marketers have two special
aptitudes.
– They have disciplined methods marketing research and
marketing intelligence for collecting information about
the marketing environment.
– They also spend more time in collecting data about
customer and competitor environments.
– Environment offers both opportunities and threats.
– By carefully studying the environment, marketers can
adapt their strategies to meet new marketplace
challenges and opportunities.
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36.  Why Analyse the Marketing Environment?
– For identification of SWOT
– To adapt with a change,
– To prepare long-range strategy,
– To meet the needs of today’s and tomorrow’s
customers,
– To compete with intense competition in the present
market place
– To build brand reputation
– Proactive approach & strategy building Etc.
o The marketing environment is made up of:
1. Internal environment
2. Micro-environment.
3. Macro-environment.
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37. 1. Internal Environmental Analysis
– Internal analysis is the methodical evaluation of the key internal features of
an organization.
– Areas inside a company.
– All departments must “think consumer” and work together to provide superior
customer value and satisfaction.
– Identify the Internal Strengths and Weaknesses
 Strength is something a company is good at doing or a characteristic that gives
it an important capability.
 A Weakness is something a company lacks or does poorly (in comparison to
others) or a condition that puts it at a disadvantage
 These are some commonly considered in analyszng internal
factors:
 Financial resources (funding, sources of income and investment
opportunities)
 Physical resources (location, facilities and equipment)
 Human resources (employees, volunteers and target audiences)
 Access to natural resources, trademarks, patents and copyrights
 Current processes (employee programs, department hierarchies and
software systems)
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38. 2. Micro-Environment:
– The company’s micro-environment includes all actors
close to the company that affect positively or
negatively its ability to create value for and
relationships with customers’ directly.
– Marketing management’s job is to build relationships
with customers by creating customer value and
satisfaction. However, marketing managers cannot do
this alone.
Marketing success requires building relationships
with:
– other company departments,
– suppliers,
– marketing intermediaries,
– competitors,
– various publics, and customers, which combine to make up the
company’s value delivery network.
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39. Actors in the Micro
environment
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40. i. The Company’s Department
– Marketers must work in harmony with other
company departments to create customer value and
relationships.
– For example, Wal-Mart's marketers can’t promise us low
prices unless its operations department delivers low
costs
• Marketing decisions like new products & expansion
depend on the support of:
–top management, finance, managerial skills,
–organization’s strengths and weaknesses,
–research and development (R&D) etc.
– All of these functions must 'think customer' and they
should work together to provide superior customer
value and satisfaction.
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41. ii. Suppliers
Suppliers are an important link in the company's
overall customer 'value delivery system".
They provide the resources needed by the company to
produce goods and services.
Supplier problems can seriously affect marketing.
Marketing managers must watch supply availability
supply shortages or delays, labor strikes, and other
events which can cost sales in the short run and
damage customer satisfaction in the long run.
Marketing managers must also monitor the price
trends of their key inputs.
Rising supply costs may force price increases that can
harm the company’s sales volume.
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42. iii. Marketing Intermediaries
– Marketing intermediaries help the company
promote, sell, and distribute its products to final
buyers.
– In creating value for customers, marketers must
partner with other firms in the company’s value
delivery network.
– For example, Lexus can’t create a high-quality
ownership experience for its customers unless its
suppliers provide quality parts and its dealers provide
high sales and service quality
• Marketing intermediaries include:
– Resellers,
– Physical distribution firms
– Marketing service agencies
– Financial intermediaries
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43. iv. Competitors
– These are those who serve a target market with products and
services that are viewed by consumers as being reasonable
substitutes
– The marketing concept states that, to be successful, a company must
provide greater customer value and satisfaction than its competitors do.
– Thus, marketers must do more than simply adapt to the needs
of target consumers.
– They also must gain strategic advantage by positioning their
offerings strongly against competitors’ offerings in the minds of
consumers
– No single competitive marketing strategy is best for all companies.
– In business it is very important to understand who the competitors are?
– gather all necessary information about all aspects of competitors’
marketing activities that is their products, pricing, distribution
systems, and promotional programs.
v. Publics
– A public is any group that has an actual or potential interest in or
impact on an organization's ability to achieve its objectives. Such as
financial publics & Media publics.
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44. vi. Customer:
– Customers are the most important actors in the company’s
microenvironment.
– They are the resource upon which the success of the business
depends
– The aim of the entire value delivery system is to serve target
customers and create strong relationships with them
• Five types of customer markets
1. Consumer markets consist of individuals and households that buy
goods and services for personal consumption.
2. Business markets or industrial markets buy goods and services
for further processing or for use in their production process.
3. Reseller markets buy goods and services to resell at a profit.
4. Government markets are made up of government agencies that buy
goods and services for carrying out the main functions of government.
5. International markets consist of these buyers in other countries,
including consumers, producers, resellers, and governments. Each
market type has special characteristics that call for careful study by the
seller.
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45. 2. The Company’s Macro Environment
– The macro environment consists of broader forces that
affect the actors in the microenvironment.
– Macro environment refers to those factors which are
external forces in the company’s activities
– These are uncontrollable factors which indirectly affect
the firms' ability to operate in the market effectively.
– There are powerful influencers such as war and natural
disasters which inevitably would influence the business
and would be out of its control.
– The company and all of the other actors operate in a
larger macro-environment of forces that shape
opportunities and pose threats to the company.
– It can be divided into six major components as shown
below
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46. Macro Environment…
– Identifying External Opportunities and Threats
– It can be divided into six major forces in the
company’s Macro Environment as shown below
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47. a. Demographic Environment
– Demography is the study of human populations in terms of size,
density, location, age, gender, race, occupation, and other statistics.
– The demographic environment is of major interest to marketers
because it involves people, and people make up markets.
– Changing demographics mean changes in markets, which in turn
require changes in marketing strategies. Demographic trends are
constantly changing.
b. Economic Environment
– it refers to the sum of all economic factors that affect consumer
purchasing power and consumption pattern or spending
patterns.
– Marketers must pay close attention to major trends and consumer
spending patterns both across and within their world markets
• The major factors that affect purchasing power include:
Disposable personal income, Levels of inflation,
GDP, policies and nature of an economy, interest rates
Credit availability
Income distribution- Upper class, Middle class, Underclass
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48. c. Natural/Physical environment
– These are concerned with the availability of
natural resources needed as inputs by
marketers and affects their marketing activities
– This includes use of raw material from nature for
producing products
– Marketers should be aware of the threats and
opportunities associated with four trends in the
physical environment.
availability of raw materials
Increased energy costs
Concern of government in environmental protection.
Increased pollution levels
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49. d. Political,-Legal Environment Analysis
– This refers to the way a country is being run in terms of
politics.
– The direction and stability of political factors is a major
consideration for managers in formulating company
strategy
• Some key Political (Governmental & legal) variables
includes:
– Political stability, Taxation at local, state, federal levels
– Environmental protection laws
– Level of government subsidies, Terrorist activities
– Import/Export regulations, Fiscal & monetary policies
– Size of Government budget, Local, state & national
elections
– laws, regulations and restrictions of the government
related to competition, consumers, and business
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50. e. Technological Environment
– The technological environment includes forces that
create new technologies, creating new product and
market opportunities.
– Example Degree of Automation & Use of IT &
communication
f. Socio-cultural factors
– Socio-cultural factors intensely influence the way
people live and help determine what, where, how,
and when customers buy a firm’s products. Such as
–Changes in lifestyles
–Family structures
–Attitudes and values
–Household Patterns
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51. 3/16/2023 By G/medhn A. (MA) 51
The result of Internal and External Analysis
SWOT Analysis
Strengths: “Strength” is a
positive characteristic that
gives a company an
important capability.
 Competent HR
 Better company finance
 Good Technology usage
 Manufacturing efficiency
 Superior image and
reputation
 Superior technological
skills
 Distinctive competence
in key areas etc..
Weaknesses: A “Weakness” is
a condition or a characteristic,
which puts the company at
disadvantage. It includes lack of:
o facilities, financial resources,
o management capabilities,
o marketing skills, and brand
image
o Lack of management vision,
depth and skills
o can be source of weaknesses
 No clear strategic direction
 Poor research and
developmental programs
 Inability to raise capital
 Poor market image
 Low employee moral etc…..
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