Chapter 3
Market Environment – consists of actors and factors that affect a company’s capability to operate effectively in providing products and services to its customers. It is normally classified into Macro- and microenvironment:
1. Macroenvironment. To analyze Macroenvironment PEEST is used:
- Political/ legal (EU-wide laws and national laws)
- Economic Forces (economic growth & unemployment, interest & exchange rate)
- Ecological/ Physical Environment forces (global warming, pollution, energy and scarce resource conservation, environmentally friendly ingredients and components, recycling and non-wasteful packaging)
- Social/ Cultural forces
1. Demographic forces (world population growth, age distribution, household structure)
2. Cultural forces
3. Consumerism – organized action against business practices, that are not in interest of consumers.
- technological forces
2. Microenvironment.
- Customers
- Competition
- Distributors
- Suppliers
Environmental scanning - the process of monitoring and analyzing the marketing environment of a company. There are approaches to organization of environment scanning:
1. Line management – linear managers are required to conduct scanning in addition to their existing duties.
2. Strategic planner – part of strategic planner’s job
3. Separate organizational unit
4. Joint line/ general management teams
Reducing costs, but no
radical actions
Retrenchment
Environmental change
Gradual strategic
reposition
Delay
Ignorance
Barriers to change
Radical strategic
repositioning
Chapter 4
Consumers – are individuals who buy products for personal consumption. An understanding of customer is gained through answering the following Questions:
Who buys? (5)
There are 5 roles, that can be played by the consumer, while taking a decision about purchase of product:
1. Initiator – begins the process of considering a purchase
2. Influencer
3. Decider
4. Buyer
5. User
How they Buy? (4) Very important scheme, pay attention
Before consumers buy something, there is a number of steps, before they make a decision:
Need recognition/problem awareness
The customer is going to purchase a product if considering different in benefits of new product and already existing one will exceed the incurred loss of purchase. The second factor is importance of problem for the customer. Marketing managers should be aware of:
1. Needs of consumers and problems that they face
2. Need inhibitors – can potentially stop a purchase
3. Need stimulation – the way to encourage a purchase
Information search
When the decision to buy is strong, than starts a process of information search. There are the following types of information search:
1. Internal – check memories
2. External – family, fiends
3. Third-party reports – internet, product reviews, blogs
Evaluation of alternatives and purchase
Depending on the level of involvement, there are two evaluation and purchase models
Personal believes
Attitudes
Purchase
Purchase intention
Normative beliefs
Subjective norms
Repeat purchase
Awareness
Trial
Depending on the level of involvement, there are different advertising tools for each level of involvement.
Post-purchase evaluation of the decision
Positive/negative disconfirmation, cognitive dissonance
What are the choice criteria? (4)
There are the following choice criteria for consumers:
Technical (reliability, performance)
Economic (price, running cost)
Social (status, fashion)
Personal (ethics, emotional reasons)
When/where do they buy (or influences on consumer behavior)
The buying situation (3)
Level of Involvement
Self-image
Perceived risk
Extent of problem solving
Number of alternatives
Social Factors
Time pressure
Hedonism
On this basis there are following levels of involvement into choice of products:
-Extended problem solving. High degree of information and many evaluation criteria before taking a decision about the purchase.
- Limited problem solving
- Habitual problem solving
Personal influences (7)
-Information processing – process by which stimulus is received interpreted and later retrieved.
- Motivations – what drives consumer in his purchases?
- Beliefs and attitudes
- Personality
- Economic circumstances
- Lifestyle
- Life-cycle and age
Social influences (4)
- Culture – traditions, taboos, values, basic attitudes of the whole society within which, and individual lives.
- Social class
- Geodemographic – households are put into groups basing on such information like car ownership, age, occupation etc. (ACORN and MOSAIC – ch. 8)
- Reference group – indicates the group of people who influence individual’s attitude and behavior (there are Membership groups and Aspirant groups – celebrities act like opinion leaders)