Marketing Environment. Competitive Strategy. Marketing Plan and Research

Marketing Environment

The functions of a marketing manager have emerged since the late nineteenth century, along with the emergence of the technology for mass production. Mass production requires mass marketing. Most organizations in today's world are global. The communication and transportation revolutions of the last hundred years have created a true global economy. The world's economy is now one huge market, and marketing managers must constantly monitor it for changes that create opportunity or generate threats to their organization.

The marketing concept, often called marketing orientation, is the foundation of marketing planning and is a guiding philosophy of today's successful organizations. The need to conduct marketing research, understand buyer behavior, segment markets, and focus the marketing mix on a target market is the core of a marketing orientation. Thus, the job of today's marketing manager is to transform the concept of marketing from philosophy to action.

Modifications in the external environment of the organization are driving all of these changes. Technological advances completely changed the way the products are promoted to customers. The emergence of robotics greatly reduced the cost of manufacturing. Rising energy prices altered the buying habits of consumers. All the significant changes must be monitored by marketing managers if their organization is going to remain successful.

One of the biggest changes in the external environment of organizations has been the globalization of markets. Since World War II, treaties have lowered the barriers to trade and eliminated tariff restrictions. The treaties, combined with advances in telecommunications and transportation, have created today's global economy. While firms are no longer able to isolate themselves from this global economy, they must compete if they are to survive.

Kotler and Keller (2016) define the marketing environment as consisting of the internal factors and forces, which affect the company's ability to develop and maintain successful transactions and relationships with the company's target customers.

Marketing Environment concerns the influences or variables of the external and internal environment of a firm that controls the marketing management's capability to construct and preserve the flourishing relationships with the consumer. An assortment of environmental forces affects a company's marketing arrangement. A few of them are governable while others are unmanageable. It is the task of the marketing manager to modify the company's policies together with the shifting environment.

The overall marketing environment includes all the aspects that relate to the capability of a firm to bond with the customers. The marketing environment is comprised of the following two key factors: Micro-factors inside the firm Macro-factors linked to economic, social, cultural aspects etc.

Competitive Strategy

Designed by Michael Porter in 1979, Porter's Generic Strategies is a framework used to outline the three major strategic options open to organizations that wish to achieve a sustainable competitive advantage. Each of the three options needs to be considered within the context of two aspects of the competitive environment. Firstly, the sources of competitive advantage which establish whether the products are differentiated in any way, or if they are the lowest cost producer in the industry. Secondly, the competitive scope of the market determines if the company targets a wide market or if it focuses on a very narrow niche market.

The three generic strategies which this creates are cost leadership, differentiation and focus. Within each of the three basic organizational strategies, there are four possible strategies for revenue growth.

Product Development Strategy – The product development strategy is less risky than market development because it focuses on marketing new products to existing markets. Here, the organization is already familiar with marketing and the way it works. To increase the chance of success, the organization bases its product development on market research to determine which new products are most desirable for its existing target markets.

Diversification Strategy - Diversification is the most risky of all the strategies because it requires marketing new products to new markets. This involves extensive market research to determine which market segments are most desirable. The organization then develops new products for these new markets.

Market Development Strategy - Market development is a more risky strategy and involves an organization's expanding into new markets. On the basis of market research, the organization identifies the most desirable market segments and targets them for its expansion. The risk with this strategy is that the product might be rejected in the new market, which is why good market research is critical.

Market Penetration Strategy - Market penetration is the most basic and least risky strategy. It focuses on selling more products to the existing markets. Therefore, there is no risk related to new products in new markets. Market penetration requires a firm to market its products more aggressively in the current target markets.

Making good marketing strategy decisions is never easy, yet knowing what basic decision areas to consider helps you plan a more successful strategy. Managers should make operational decisions within the guidelines set down during strategy planning. They develop product policies, place policies, and so on as part of strategy planning. Then operational decisions within these policies probably will be necessary—while carrying out the basic strategy. Note, however, that as long as these operational decisions stay within the policy guidelines, managers are making no change in the basic strategy. If the controls show that operational decisions are not producing the desired results, however, the managers may have to reevaluate the whole strategy—rather than just working harder at implementing it.

Marketing Plan and Research

The marketing mix – (4P's)is used to focus an organization's strategy on a specific target market. Successful integration of the marketing mix toward this market is the core of a successful marketing plan. The four components of the marketing mix:

• Product: The combination of services and physical goods that best satisfies the needs of the target market.

• Price: Enables the target market to exchange value for the product it wants to purchase. Price must cover the cost of producing the product while also making it affordable for the target market.

• Place: Place refers to the physical distribution of a product, making sure it is in the right place at the right time for the consumer to purchase it.

• Promotion: Promotion is the integration of the different techniques available to an organization to communicate to its target market.

Four steps to the marketing plan –

• Analyze the situation

• Articulate the organizations objectives

• Explore opportunities

• Develop realistic goals.

Four steps in designing a competitive intelligence system for market research -

• Identify intelligence sources.

• Collect intelligence.

• Evaluate the intelligence.

• Report the intelligence to decision makers.

Marketing research is the process of learning more about consumer behavior. Because the factors that impact consumer behavior are similar to other behavior research, many techniques relative to consumer behavior are drawn from psychology. The difference is consumer behavior increases the effectiveness of the firm's marketing efforts. Both qualitative and quantitative research is applied to marketing. In place of focus groups and surveys, marketing managers use secondary information about strategies, finances, and markets to understand its buying behavior. Marketing managers may then contact key purchasers or other personnel with a role in decision making to determine what their needs are. The goal is to better understand the needs of the customers.

Eventually, marketing managers must control the marketing plans that they develop and implement. The control aspect includes feedback so managers can change marketing strategies to better meet customer needs. To maintain control, a marketing manager uses a number of analytical tools to learn more about customers and their buying habits. That might involve measuring customers' shopping behaviors and purchase decisions. Once the manager has selected the target market, decided on the (integrated) marketing mix to meet that target market's needs, and developed estimates of the costs and revenues for that strategy, it's time to put it all together in the marketing plan.

A marketing plan includes the time-related details—including costs and revenues—for a marketing strategy. Thus, the plan basically serves as a blueprint for what the firm will do. Marketing managers must constantly evaluate their strategies to be sure they're not being left in the dust by competitors who see new and better ways of doing things. This is where market research comes in. Decision-making in many industries, both for-profit and not-for-profit, depends on input from research. The process enables a company to identify its customers and design products that maximize the value they receive from a purchase. In return, the company receives value as the customers spend their hard- earned money. The result: customers win and businesses win! All are better off.