Summary Marketing Fundamentals
Chapter 3 Marketing Environment
The marketing environment is divided into Internal environment and External environment.
Internal environment (aka. Microenvironment) are:
-Departments (production/research and development)
-Resources ( financial and technical resources)
that are part of the organisation, but outside of the marketing department. They are easily
controllable.
The rest: External environment (aka. Mesoenvironment or Macroenvironment)
Uncontrollable influences. In an environmental analysis (company’s opportunities and threats) only
consider relevant environmental forces, those that influence the company’s performance and results.
For example, people(customers), organisations(competition), circumstances(expansion EU) and
developments(aging of population).
The Mesoenvironment is seen as influences that stem from the immediate external environment.
Such as customers, suppliers, intermediaries or middlemen, competitors and other stakeholders,
such as creditors.
Collecting information about the elements of a company’s environment (environmental scanning) is
to determine the need for information for strategy development. Questions are selected based two
criteria: Importance and Urgency.
Importance: possible consequences of a set of circumstances or certain trend for the company’s
financial performance.
Urgency: likelihood of the circumstance actually occurring, when and how much time do we have to
respond appropriately?
Mesoenvironment
The microenvironment is the industry or market in which the company operates. It is the immediate
environment in which the marketer and firm interacts with customers, suppliers, intermediaries such
as distributors, competitors and public groups or stakeholders. The mesoenvironmental factors are
external in nature and therefore uncontrollable, but they can be influenced to some degree.
In business, markets are described in terms of the type of customers that make up the market.
Essentially, there are four types of customer markets:
1. The Consumer Market: the market for products and services purchased by individuals,
families or household for their own consumption or use.
2. The Industrial Market: aka the organisational market = market for goods sold to and
purchased by businesses for use in their own production, which they sell at a profit.
3. The Intermediary Market: organisations that buy products and resell them without any
processing, for making a profit. Resellers.
4. The Institutional Market: large scale users (nursing homes, schools or hospital cafeterias),
government agencies and non-profit organisations. Similar buying behaviour as industrial
customers.
, Suppliers
Supplier marketing (procurement marketing)
Buying from several suppliers = multiple sourcing
Intermediaries
Companies that operate as a link between producers and consumers or, as middlemen, specialise in
providing services to facilitate transactions between suppliers and customers.
Examples: distributors (wholesalers and retailers), marketing research agencies and transportation
and storage companies.
The costs that intermediaries add are offset by the utilities they create; utility is a measure of the
extent to which a product or service satisfies the needs and wants of a consumer or organisation.
There is a wide separation between the production and the consumption of a product. The
intermediaries add value by bridging the differences. These include:
- Differences in quantity.
Products are made/shipped in large numbers, but the individual only needs a small amount.
- Differences in time.
Some vegetables are only grown in summer, skis only sold in winter. Time utility by making
the product available to the consumer when needed.
- Differences in place
Production in China, but consumption at home, leading to spatial market separation. Trough
transportation, manufacturers create place utility.
- Differences in product assortment
Consumers like to choose from range of products that is varied. Wholesalers and retailers
offer customer-oriented merchandise mix by combining the products.
Competition
in-sector competition:
Brand competition:
Other brand of the same type of product, more or less substitutes. (Heineken & Grolsch)
Product competition:
Different types of products within a particular product category. (malt beer & white beer)
Cross-sector competition:
Generic competition:
Alternative product lines that are able to satisfy the same need. (beer & wine & whiskey)
Need competition:
Different kinds of needs for which the consumer is willing to pay. (eating out & saving for holiday)
Benchmarking is a comparison of a firm’s own business processes and performance in various
activities with those of other organisations.
A company’s results are not only dependent on its customers, suppliers, intermediaries and
competitors, but also on public groups.
Chapter 3 Marketing Environment
The marketing environment is divided into Internal environment and External environment.
Internal environment (aka. Microenvironment) are:
-Departments (production/research and development)
-Resources ( financial and technical resources)
that are part of the organisation, but outside of the marketing department. They are easily
controllable.
The rest: External environment (aka. Mesoenvironment or Macroenvironment)
Uncontrollable influences. In an environmental analysis (company’s opportunities and threats) only
consider relevant environmental forces, those that influence the company’s performance and results.
For example, people(customers), organisations(competition), circumstances(expansion EU) and
developments(aging of population).
The Mesoenvironment is seen as influences that stem from the immediate external environment.
Such as customers, suppliers, intermediaries or middlemen, competitors and other stakeholders,
such as creditors.
Collecting information about the elements of a company’s environment (environmental scanning) is
to determine the need for information for strategy development. Questions are selected based two
criteria: Importance and Urgency.
Importance: possible consequences of a set of circumstances or certain trend for the company’s
financial performance.
Urgency: likelihood of the circumstance actually occurring, when and how much time do we have to
respond appropriately?
Mesoenvironment
The microenvironment is the industry or market in which the company operates. It is the immediate
environment in which the marketer and firm interacts with customers, suppliers, intermediaries such
as distributors, competitors and public groups or stakeholders. The mesoenvironmental factors are
external in nature and therefore uncontrollable, but they can be influenced to some degree.
In business, markets are described in terms of the type of customers that make up the market.
Essentially, there are four types of customer markets:
1. The Consumer Market: the market for products and services purchased by individuals,
families or household for their own consumption or use.
2. The Industrial Market: aka the organisational market = market for goods sold to and
purchased by businesses for use in their own production, which they sell at a profit.
3. The Intermediary Market: organisations that buy products and resell them without any
processing, for making a profit. Resellers.
4. The Institutional Market: large scale users (nursing homes, schools or hospital cafeterias),
government agencies and non-profit organisations. Similar buying behaviour as industrial
customers.
, Suppliers
Supplier marketing (procurement marketing)
Buying from several suppliers = multiple sourcing
Intermediaries
Companies that operate as a link between producers and consumers or, as middlemen, specialise in
providing services to facilitate transactions between suppliers and customers.
Examples: distributors (wholesalers and retailers), marketing research agencies and transportation
and storage companies.
The costs that intermediaries add are offset by the utilities they create; utility is a measure of the
extent to which a product or service satisfies the needs and wants of a consumer or organisation.
There is a wide separation between the production and the consumption of a product. The
intermediaries add value by bridging the differences. These include:
- Differences in quantity.
Products are made/shipped in large numbers, but the individual only needs a small amount.
- Differences in time.
Some vegetables are only grown in summer, skis only sold in winter. Time utility by making
the product available to the consumer when needed.
- Differences in place
Production in China, but consumption at home, leading to spatial market separation. Trough
transportation, manufacturers create place utility.
- Differences in product assortment
Consumers like to choose from range of products that is varied. Wholesalers and retailers
offer customer-oriented merchandise mix by combining the products.
Competition
in-sector competition:
Brand competition:
Other brand of the same type of product, more or less substitutes. (Heineken & Grolsch)
Product competition:
Different types of products within a particular product category. (malt beer & white beer)
Cross-sector competition:
Generic competition:
Alternative product lines that are able to satisfy the same need. (beer & wine & whiskey)
Need competition:
Different kinds of needs for which the consumer is willing to pay. (eating out & saving for holiday)
Benchmarking is a comparison of a firm’s own business processes and performance in various
activities with those of other organisations.
A company’s results are not only dependent on its customers, suppliers, intermediaries and
competitors, but also on public groups.
