l04 Micro Env

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doc
Course
Principles of Marketing (ema_uk_he_princpmark_1p)
Unit
u02: Marketing Environments
Filename
/
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oc
Filetype
CO
Author firstname
Charles
Author surname
Beard
Name of
organisation
Pearson Education
The Micro-Environment
Higher Education Online Course Materials Phrase authoring template

Charles Beard 2003
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Learning Outcomes
The actors and forces within the micro-environment are more immediate that those
in the macro-environment. For this reason, marketers spend a lot of time keeping
track of what is happening to their competitors, intermediaries, publics and suppliers.
When you have completed this topic, you will be able to:
Analyse the micro-environment a company operates within.
Analyse the competitive environment for a product.
In the next section we will review the essential knowledge you need for this topic,
and then you can take self tests at the end of each sub-topic. Once you have
completed this, you will be able to take the topic further (i.e., beyond the scope
introduced in your textbook) by reviewing video interviews with marketing managers
from European and International companies and undertaking activities and case
studies designed to apply your knowledge to real-world situations.

Charles Beard 2003
Essential Knowledge
For this topic, you should already have the essential knowledge to know how to:
Define micro-environment.
Explain why marketers need to analyse the micro-environment.
Identify and explain the components of the micro-environment.
Describe what is involved in analysing competitors.
You will find the essential knowledge you need in your textbook. Here are the page
references:
Type
BQB
To access cross-references to Pearson Education textbooks click here.
Source

Charles Beard 2003
This section reviews your ability to:
Define micro-environment.
Explain why marketers need to analyse the micro-environment.

Charles Beard 2003
Definitions
Micro-environment: The forces close to the company that affect its ability to serve
its customers the company, market channel firms, customer markets, competitors
and publics, which combine to make up the firm's value delivery system.
Marketing management's job is to attract and build relationships with customers by
creating customer value and satisfaction. However, marketing managers cannot
accomplish this task alone. Their success will depend on other actors in the company's
microenvironment other company departments, suppliers, marketing intermediaries,
customers, competitors and various publics, which combine to make up the company's
value delivery system
Source: Kotler p. 118

Charles Beard 2003
Quick Test
Type
Source
Question
MC
Pearson Education
Marketers analyse the microenvironment because:
Status
Answer
Feedback
Incorrect
The micro-environment contains

actors and forces beyond the control
of the company.
No, to some extent, the company

can control the actors and forces in
the micro-environment.
Corrrect
A marketer's ability to attract and

build customer relationships depends
upon actors in the microenvironment.
Yes, this is the reason for the

undertaking an analysis of the
micro-environment.
Incorrect
A marketer's ability to attract and

build customer relationships depends
upon good analysis.
No, analysis by itself is useless

without a purpose for it.

Charles Beard 2003
Components of the Micro-Environment

Identify and explain the components of the micro-environment.

Charles Beard 2003
Make-up of the Micro-Environment

While the internal working of the company environment will strongly affect the
marketing decisions it can make, the actions of others in society and its own industry
will in turn affect what the company is able to do. For marketing decisions, there are
four types of organisation that make up the micro-environment.
Suppliers affect what the company can produce. For example, they can go out of
business, become more or less cost effective, and develop new technologies.
While the company has full control over its own environment, it has relatively little
control over its micro-environment. Despite this, the company can influence and
change the organisations within its micro-environment through strategic action,
representation on official bodies and lobbying.
Marketing channels determine how the company can get its products and services
to its market. Examples of channels are conventional shops, mail order and ecommerce. Changes in these channels will affect what the company can do. For
example, the adoption of broadband will make the e-commerce channel an
increasingly attractive channel for some.
Competitors have a direct impact on what a company can and cannot do in its
target market.
Publics are groups within society that may have a direct interest in what the
company does. For example, the environmental lobby is a public that can directly
affect oil companies and automotive manufactures.

Charles Beard 2003
Quick Test
Type
Source
Question
MC
Pearson Education
To MacDonalds, Burger King is a:
Status
Answer
Feedback
Incorrect
Supplier
No, Burger King is a competitor to

MacDonalds.
Correct
Competitor
Yes, Burger King is a competitor to

MacDonalds.
Incorrect
Marketing channel

MacDonalds.
Incorrect
Public

MacDonalds.
Incorrect
None of the above

MacDonalds.
Type
Source
Question
MC
Pearson Education
To a skin care products producers, a

perfume producer is a:
Status
Answer
Feedback
Incorrect
Supplier
Yes, perfume producer are suppliers

to the producers of skin care
products.
Correct
Competitor
No, perfume producer are suppliers

products.
Incorrect
Marketing channel

products.
Incorrect
Public

products.
Incorrect
None of the above

products.
Type
Source
Question
MC
Pearson Education
To a producer of farm fertilisers, the

European Community is:
Status
Answer
Feedback
Incorrect
Supplier
No, the EC is part of the macro-

Charles Beard 2003
environment.
Correct
Competitor
No, the EC is part of the macroenvironment.
Incorrect
Marketing channel
Incorrect
Public
Correct
None of the above
Yes, the EC is part of the macroenvironment.

Charles Beard 2003
Analysing Competitors
Describe what is involved in analysing competitors.

Charles Beard 2003
Analysis
As in life, it is not always obvious who your competitors are. Sometimes companies
that look like competitors are in fact potential collaborators or allies, and vice versa.
Finding out who competitors are is a process of working out the strategic intent of
other companies. The six-stage process described here is one way of doing this. Click
on the labels for more information.
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Charles Beard 2003
Quick Test
Type
Source
Question
MC
Pearson Education
You discover that a competitor

intends to increase market share at
the expense of your own market
share. This is an example of:
Status
Answer
Feedback
Incorrect
Identifying competitors
No, this is an example of

determining a competitor's
objectives.
Correct
Determining objectives
Yes, correct!
Incorrect
Identifying strategies

objectives.
Incorrect
Assessing strengths and weaknesses

objectives.
Incorrect
Estimating reaction patterns

objectives.
Incorrect
Selecting competitors to attack and

avoid

objectives.
Type
Source
Question
MC
Pearson Education
You decide to analyse only the

market leader and competitors
closest to you in sales volumes This
is an example of:
Status
Answer
Feedback
Correct
Identifying competitors
Yes, correct!
Incorrect
Determining objectives
No, this is part of the process of

identifying competitors.
Incorrect
Identifying strategies

Incorrect
Assessing strengths and weaknesses

Incorrect
Estimating reaction patterns

Incorrect
Selecting competitors to attack and

avoid


Charles Beard 2003

Charles Beard 2003
Taking it Further
In this next section you will look at the micro-environment in more detail using video
interviews and activities.

Charles Beard 2003
Analysing the Micro-Environment

When you have completed this section, you will be able to:
Analyse the micro-environment a company operates within.

Charles Beard 2003
Video Lounge
How do marketers analyse their suppliers in practice?
Opera Telecom
How are competitors taken into consideration in your marketing plan?

(Windows Media Video - for modem)
(Windows Media Video - for broadband)
Click here for a transcript of this video clip.

Charles Beard 2003
Activity: Analysing Sales

Look at this activity, then answer the questions below.

Charles Beard 2003
Quick Test
Type
OQ
Source
Pearson Education
Question
Create Z charts for each brand in year 2, and compare them. To ensure
fair comparison, make sure the scale of the y-axes for both charts is the
same.
What conclusions can you draw from this analysis?
Feedback
Although the sales figures for both flavours show a decline in year 2,
the Z charts show that the strawberry flavour is in fact strengthening in
the long run, where forest fruits flavour is declining. If you look at the
moving average curve for strawberry flavour, you will see it is
increasing, where it is declining for forest fruits.
WhatHo! Strawberry Supermarket Scanner Data

WhatHo! Strawberry Spermarket Scanner Data

Charles Beard 2003
WhatHo! Forest Fruits Supermarket Scanner Data

WhatHo! Forest Fruits Supermarket Scanner Data
You can also see this in the cumulative periodic sales, where sales of
strawberry flavour show an improvement from April onwards.
Click here for notes about the Z chart.

Charles Beard 2003

l04 Micro Env

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/var/www/apps/conversion/tmp/scratch_4/253286631.

Principles of Marketing (ema_uk_he_princpmark_1p)

u02: Marketing Environments

Higher Education Online Course Materials Phrase authoring template

Analyse the micro-environment a company operates within.

Analyse the competitive environment for a product.

Higher Education Online Course Materials Phrase authoring template

Explain why marketers need to analyse the micro-environment.

Identify and explain the components of the micro-environment.

Describe what is involved in analysing competitors.

To access cross-references to Pearson Education textbooks click here.

Higher Education Online Course Materials Phrase authoring template

Explain why marketers need to analyse the micro-environment.

Higher Education Online Course Materials Phrase authoring template

Higher Education Online Course Materials Phrase authoring template

Marketers analyse the microenvironment because:

The micro-environment contains

No, to some extent, the company

A marketer's ability to attract and

Yes, this is the reason for the

A marketer's ability to attract and

No, analysis by itself is useless

Higher Education Online Course Materials Phrase authoring template

Components of the Micro-Environment

Identify and explain the components of the micro-environment.

Higher Education Online Course Materials Phrase authoring template

Make-up of the Micro-Environment

Higher Education Online Course Materials Phrase authoring template

To MacDonalds, Burger King is a:

No, Burger King is a competitor to

Yes, Burger King is a competitor to

No, Burger King is a competitor to

No, Burger King is a competitor to

None of the above

No, Burger King is a competitor to

To a skin care products producers, a

Yes, perfume producer are suppliers

No, perfume producer are suppliers

No, perfume producer are suppliers

No, perfume producer are suppliers

None of the above

No, perfume producer are suppliers

To a producer of farm fertilisers, the

No, the EC is part of the macro-

Higher Education Online Course Materials Phrase authoring template

No, the EC is part of the macroenvironment.

No, the EC is part of the macroenvironment.

No, the EC is part of the macroenvironment.

None of the above

Yes, the EC is part of the macroenvironment.

Higher Education Online Course Materials Phrase authoring template

Describe what is involved in analysing competitors.

Higher Education Online Course Materials Phrase authoring template

Higher Education Online Course Materials Phrase authoring template

You discover that a competitor

No, this is an example of

No, this is an example of

Assessing strengths and weaknesses

No, this is an example of

Estimating reaction patterns

No, this is an example of

Selecting competitors to attack and

No, this is an example of