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Micro Environmental Factors Which Influence Marketing Decisions

   

Added on  2020-01-07

21 Pages5038 Words991 Views
MARKETING PRINCIPLES

Table of ContentsIntroduction................................................................................................................................11.1 Basic components of the marketing process....................................................................11.2 Cost-benefits analysis of Ford Motors’ marketing orientation:.......................................2Task 2.........................................................................................................................................22.1 Micro and macro environmental factors which are responsible to influence marketingdecisions.................................................................................................................................22.2 Segmentation criteria for products in different markets..................................................42.4 Demonstration of the buyer behaviour and its effects on the marketing activities underdifferent circumstances..........................................................................................................42.5 New positioning strategy for the selected product...........................................................5TASK 3......................................................................................................................................53.1 Product development strategy to sustain competitive advantage.....................................53.2 Devising distribution strategy in order to provide customer convenience.......................63.3 Designing pricing strategy which should reflect the objectives of organization inaccordance with market conditions........................................................................................63.4 Developing promotional strategy to achieve marketing objective...................................73.5 Understanding additional components of the extended marketing mix...........................8Task 4.........................................................................................................................................9Conclusion................................................................................................................................13REFERENCES.........................................................................................................................14

IntroductionMarketing principles are also known as marketing strategies which include a set ofprocedures and ideas which can be employed to optimize the market performance oforganizations in different industries. This can be either for already prevailing products orexpected new business practices for a new market place. The tactics and strategy formarketing can be different for a company if compared with another company’s strategy,however it consist of common tools and areas for the effectiveness of a firm’s business suchas advertising, promotion, distribution and pricing strategy. The following report analyses theconcept of micro and macro environmental factors which are responsible for marketingdecisions. The report also includes the segmentation, targeting and positioning criteria thatshould be used in launching a new product into the market place. The buyer’s behaviourconcept will also be reviewed which is important to consider in different marketing activities.The report concludes with suggesting marketing mix decisions for two different marketsegments and comparing between business and consumer marketing strategies as well asinternational and domestic marketing.1.1 Basic components of the marketing processOne of the most important purposes of business is to create customers, this makesmarketing the basic function of a business. Generally speaking, marketing is the act ofcreating and exchanging values with customers. Marketing requires the in-depth knowledgeof customers need, and directing the business’s resources to meet those needs. Marketingcomprises of various activities which are to be carried out in the process of marketing(Armstrong and et.al., 2014). These activities include product designing and pricing, makingstrategies, advertising etc. Beside this, there are some other elements of marketing which arevery crucial for the success of marketing.Research: Primarily, the business has to carry out research in order to determine the varioussteps it has to take in order to launch its product in the targeted market, for the targetedcustomers.Strategy: Research provides data for the business to formulate its strategy assessing itsstrengths and weaknesses. Strategies determined the vision, mission and goal of the business.Planning: Now when the business knows what it has to do and where it has to go, the nextjob in hand is to plan the way it has to market its product (Bearden, 2006).1

Tactics: Planning has its broader sense and is done by the top level management, whereasthere are some short term plans which are made an executed by lower level managers. Thesetactics are designed to attract more customers and increase sales. These tactics may includeshort term discounts and promotions such as “buy one, get one free” or festival discounts.Thus, in addition to the basic marketing activities, above are the elements of marketingprocess which helps the business in achieving its goal. 1.2 Cost-benefits analysis of Ford Motors’ marketing orientation:Marketing orientation refers to that business model where customer needs and desiresare given the utmost importance and products are designed accordingly. Benefits ofmarketing orientation for Ford Motors discussed below:In marketing orientation the business has to design its product according to the need ofthe customer. One of the most significant benefits for Ford Motors is that marketingorientation provides a base to design the company’s products. Ford Motors innovate andimprove its products according to the need of customer which brings confidence and loyaltyamongst the customers for the company. The continuous Innovation and satisfaction ofcustomers gives Ford Motors a competitive edge over its competitors (Donovan and Henley,2003).To keep up with marketing orientation, business model has to incur additional cost aswell. Ford Motors has to invest a lot in marketing research to find out customer’srequirements. It also has to constantly design new models or improve the old models, whichsatisfies the customers need. These constant modifications require a lot of investment (Ferrelland Hartline, 2012).Task 2 2.1 Micro and macro environmental factors which are responsible to influence marketingdecisionsThe macro environmental factors talks about those factors, which externally affect themarketing decisions of Ford Motor Company. The PESTEL framework can be used toanalyse the company’s macro environment.Political factors: Ford is a multinational automobile company which needs to deal withpolitical environment of different countries. The current globalization trend provides2

favourable environment to the company. It provides good opportunities for the company topenetrate growing economies of the world. However, the company has to abide by the rulesand regulations formulated such as European Union regarding issues of CO2 emission for itsvehicle approval (Gallahar, 2013).Economic factors: The current global financial slowdown has affected the automobileindustry in particular the major automobile makers like Ford Motor. However, the companycan adopt strategies to survive the testing period and come back in the future good times.Social factors: The changes in social environment influence the marketing decisions of FordMotor. For example, lifestyle changes in the emerging economies and developing countriesprovide growing demand for automobile products, which could be a great opportunity to bangfor the company to expand its presences in these markets (Gillikin, 2015). Technological factors: The technological advancement has influenced the motor industry toadopt new changes like including safety features and fuel efficiency. Ford Motor Companyshould carry out technological research to satisfy these new demands in its vehicles.Environmental factors: There has been growing need to reduce carbon emission to reduceenvironmental pollution. The organization need to ensure its vehicle should meet the requiredstandard as part of its corporate social responsibility (Hooley, Saunders and Piercy, 2004).Legal factors: The legal factors that influence marketing decisions are environmentalregulations and labour-laws and the main issues are frequent changes in the rules acrossdifferent countries. The company need to be capable to quickly accommodate with thesechanges in order to avoid any interruptions to their business operations.Apart from above factors, there are internal micro environmental factors which have directimpact. The five forces analysis is used to analyse these micro environmental factors whichare responsible to influence marketing decisions of Ford Motor (Yoo, Donthu and Lee, 2000).Buyer power: Buyers in automobile industry have high financial strength and make purchasesin large amounts, thus can put pressure to negotiate prices. However, a strong brand like Fordcan reduce the buyer power by strategically locating exclusive distributors (Kokemuller,2016). 3

Supplier power: Supplier of raw material like assembled parts, steel, aluminium havemoderate power. The increased prices of raw materials have forced the company to employcost cutting strategies which put extra pressure on quality products suppliers (Vorhies andMorgan, 2005).Competitors: There is a fierce competition in the industry and within the top players likeGeneral Motors, Toyota and Ford. These company produce diverse range of cars and providestrong rivalry (Kotler and Armstrong, 2010).New Entrants: New firms find it very difficult to enter the already crowded market led byautomobile global giants. It needs intellectual property, extensively strong distributionnetwork, satisfactorily meeting government regulatory requirements and huge investments onresearch and development. Substitute: Used cars and public transport are the major substitutes in automobile industry(Lovelock and Wright, 2001). 2.2 Segmentation criteria for products in different marketsFord Motor has broken down its diverse business by the two manageable segmentationcriteria, product types and geographical segments. The geographical criteria divides theglobal business of Ford Motors into different market segments like Ford Europe, Ford AsiaPacific, Ford North America, Ford South America and Africa Mazda. The customers undereach geography are further segmented based on car types, such as passenger cars, sports carsand commercial vehicles like trucks, buses and vans. The business under each category isfurther divided as new vehicle sales and accessories, parts, after sale maintenance and repairservices (Maguire, 2016). In addition to this, it can be said that by having a focus ondemographic aspects the business firm can easily target its customers in different regions ofworld. As same the psychographic segmentation is also beneficial because it allows to targetcustomers on the basis of lifestyle, etc. 2.3 Targeting strategy for the selected product FORD Motor Company has come up with a new car model FORD FIESTA. Thisparticular car model has been targeted towards young adults and ladies. The company isfocusing on young adults of the age-group between 18 to 25 years and ladies. The otherdemographic variable of the target market is having moderate income for whom an affordablecar can be targeted. The particular model is suitable for nuclear families, unmarried or4

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