Summary Notes 4
1. The 5 C’s of analysis of marketing Decision making are as follows:
- Customer needs – What needs do we seek to satisfy?
- Company skills – What special competencies do we possess to meet those needs?
- Competition – Who competes with us in meeting these needs?
- Collaborators – Who should we enlist to help us and how do we motivate them?
- Context – What environmental (say, cultural, technological or legal) factors limit what is possible?
2. The external Environment of Marketing comprises:
- Competitive environment
- Political-legal environment
- Economic environment
- Technological environment
- Social-cultural environment
3. Competitive Environment:
In involves direct competition and indirect competition , Monopoly, Monopolistic Competition Oligopoly etc.
4. Political-legal Environment:
Rules of the game must be understood before a new marketer starts marketing. The politico-legal environment involves:
- Laws and their interpretations : Ignorance of laws, ordinances and regulations or failure to comply with them can result in fines, embarrassing negative publicity and possibly expensive civil damage suits.
- Designing, labeling, packaging, distributing, advertising and promoting goods and services.
- The national foreign policy can dominate the international business decisions of the local firms
- The political ideology of the Government can affect the international brands wanting to enter a market
- The competitors who work closely with the government can help erect trade barriers for a firm
- Global trade organizations can enforce trade barriers when their regulations and guidelines are not observed
- A host nation may levy anti-dumping duties on a foreign firm and such a decision may be dominated by the local businesses lobbying with the government
- Copyright infringements, trademark and intellectual property rights violations
- Direct comparative advertisements may not be allowed in few countries
- Use of children is advertising and advertising to children are banned in certain countries
- Price regulations preempt any pricing strategy of a firm
- A detailed displaying of the ingredients in product labels is mandatory in most countries
- The channel members are given the additional responsibility of verifying the eligibility of the prospective buyers for certain products
- Use of certain raw materials or methods of manufacturing are prohibited in certain countries
- Industry watch dogs and consumer groups are always on the prowl for any unethical trade practices
- Each one of the above issues has serious implications for the marketer in his marketing decision making. Ignorance of the law is no excuse and breaking of the law is an offence.
5. The Economic Environment
The overall health of the economy influences how much consumers spend and what they buy.This relationship affects marketing. All marketing activity is directed toward satisfying consumer wants and needs, marketers must understand how economic conditions influence consumer buying decisions.
Economic environment consists of forces that influence consumer buying power and marketing strategies. They include
- The stage of the business cycle,
- Resource availability
6. Technological Environment
It represents the application to marketing of discoveries in science, inventions and innovations. New technology results in new goods and services for consumers; it also improves existing products, strengthens customer service and often reduces prices through new, cost-efficient production and distribution methods. Technology can quickly make products obsolete, but it can just as quickly open up new marketing opportunities.
7. The Social-Cultural Environment
It involves the relationship between marketing and society and its culture. Marketers must cultivate sensitivity to society’s changing values and to demographic shifts such as population growth and age distribution changes.
It involves demography, cultural aspects, Psychographic aspects and Consumer behavior.
Changing social values have led to the consumerism movement which is a social force within the environment designed to aid and protect buyers by exerting legal, moral and economic pressures on business. Consumerism also advocates the rights of the consumers such as:
1. The right to choose freely – consumers should be able to choose among a range of goods and services
2. The right to be informed – consumers should have access to enough education and product information to make responsible buying decisions
3. The right to be heard – consumers should be able to express legitimate complaints to appropriate parties – be it manufacturers, sellers, consumer assistance groups and consumer courts.
4. The right to be safe – consumers should feel assured that the goods and services they purchase will not cause injuries in normal use. Product designs should allow average consumers to use them safely.
9. Stimuli of buying Behavior
The 4 ps and 4 types of Marketing environment given as above function as stimuli of Consumer Behavior which ultimately lead to buyer’s response.
10. Importance of Marketing
- To obtain physical distribution function
- Maximise the profit of the Firm & Minimise the cost (per unit)
- Maximise sales
- Reach the Target Consumer
- Goodwill creation
- Market Information and Research
- Social Values
- Corporate Social Resposiblity (CSR) :
- Optimum Use of Resources
- Increase in Income of nation
Current Affairs Articles Compilation [PDF] - May, 2023
Current Affairs MCQs PDF - May, 2023
Current Affairs [PDF] - May 16-31, 2023
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good site …….should also include extensive questions on marketing
Very useful for banking exams…..grt if previous yr contents published.