Marketing 1 3
– [Instructor] The marketing
environment has two components to it; one is the SWOT assessment and one is the environmental scanning. The SWOT assessment has an
internal assessment which looks at strength and weaknesses,
hence the S and the W. And external assessment, which
looks at the opportunities in the market and the threats in the market, hence the O and the T. The second component is
the environmental scanning, which also looks at factors
that are inside the company, the micro, and outside of
the company, the macro. So now we will go into a bit more details looking at those two components. So the SWOT assessment,
the best way to look at it is from the internal perspective
or strength and weaknesses and the external assessment
of opportunities and threats. Then we can divide them,
obviously, into positive things, which will be the strength
and the opportunities and to negative things, which will be the weaknesses and the threats. The strength are those things
that the company have that that company can do better
than the competition. So if I have good brand equity
or good brand recognition, but my competitor also have
good brand recognition, that's not necessarily a strength.
But if I have a good brand equity and my competitor does not,
then this will be a strength. On the other hand, the weakness could be that I might have the price
higher than my competition, maybe because I have better
technology, like the iPhone. So the fact that I charge
more than my competitor even though I offer better
technology is a weakness. The same goes with
opportunities and threats. Threats can be external factors
that I have no control over, but that can actually hinder what I can do and what I cannot. Opportunities, on the other
hand, are factors in the market that, again, I have no control
over, but I can utilize in order to get a better
performance over my competition. Environmental scanning has
a very similar function, only here we do not
divide them into positive and negative, just internal and external. So the marketing environment
then will include all the actors and the forces outside of the marketing department that can still though affect how marketing can work.
So let's see some of these factors. So the micro environment
then will be talking about those factors that are close to the company and can
serve the customers. For example, suppliers,
marketing intermediates, customer markets, competitors,
publics, and so forth. Here is just a nice diagram
of how all of these, for example, here we can see
customers are one of the things we need to take into
consideration, obviously. We just talked about
satisfying customer needs. We can also look at
competitors; we just discussed those competitors, and
to see how they satisfy consumers' needs better or
worse than us, and so forth. The next environment we wanna look at is the macro environment. Now the macro environment
are those factors that are outside of our
reach, but yet still have a large affect on what we
can do and what we cannot.
So, here, this diagram sort
of summarize all the forces; and you can see we have one, two, three, four, five, six forces. However, it does not
mean that every company needs to take into
consideration every force. You only take the forces that
are relevant to your product. But let's look at some of the
examples that we can discuss. So, for example, what can we do when we have advancing technology? So technology can help us
create new forms of competition. For example, when the fax was created, when the cellular phone
was created, the internet; that allowed, for example,
for Amazon to develop. Before the internet, we
couldn't have done that. Virtual reality, consumers
can now experience products in a way they couldn't experience before, which again might take
the physical retail store out of the equation all together. We can also create new industries that now can be supplied
that we didn't have before.
So it affects how people spend their time. For example, you can work and
shop from home these days. Again, you can do online shopping as compared to physical shopping. You have social media,
so you can communicate. You can give reviews;
you can give feedback in ways that you could
not have done before. So those are just examples
of how advanced technology can actually affect what
the company is doing and whether they're doing
it better than competition. Let's look at another
factor in the same, sorry, within the same, self-driving cars. We have a car that drives itself.
Will that eliminate the
need for cab drivers? Will that eliminate the
need for Uber drivers? We have Google's Waymo or we have Tesla. All of those are advances in technology that actually disrupt consumer behavior. Cell phone, for example,
have now facial recognition; and they have augmented reality abilities, so that also affects security and safety. There's different methods of payment now. We can pay online; we actually don't need our wallet anymore. We might not need cash anymore. So all of those will be good
examples of the technology. The next factor which is interesting, and many times is being neglected, is actually legal forces
and political forces. And of of the good examples is the law that was passed about where
people may or may not smoke. One of the main reasons people
used to smoke is because of the social coolness or desirability that it reflected, which is why people started to smoke when they were teenagers.
Then they got hooked, and then it was very difficult to stop smoking. Today, however, there's almost no place you can see people smoking. You're not allowed to smoke in clubs. You're not allowed to
smoke in restaurants. Some places you can't even
smoke next to a building. That took away the social desirability because nobody could
have seen you smoking. That actually was a better
force to reduce the demand for cigarettes than the
risk of maybe getting some health issues 20 or 30 years ahead.
Social and cultural forces has to do with the cultural
environment that the company as well as consumers are working at. So, for example, the quality
of life; some consumers expect that they will have leisure time, that we'll have time to do hobbies. Some consumer expect that they can work everywhere all the time. One of the big commercials
that Samsung had was European versus Americans
where Americans are busy, busy, busy as compared to
Europeans; and their idea was to show someone in
the pool on vacation still working on the iPhone
because, well, not iPhone, on the cell phone, because
the cell phone was waterproof.
So that is a social culture
that might appeal to Americans, but not necessarily to
Europeans, which usually when they're on vacation,
like to stay on vacation and not mix work with vacation. Immigration, women's role in
society, all of those actually play a role in social as
well as in cultural forces. Then we have demographics,
and demographics is one of the big ones because it reflects most cultures as well as most populations. One of the main things now
is the aging population. Health become much
better in many countries, and people just stay alive longer. So, for example, now we
have a lot of products we never had before that
cater to aging population, like the pension, retirement;
how would you have enough saving to go an have
travel around the world when you're 60 or 70 or 80 and so forth? We also have different types of families. We might have single
mothers or single fathers that, again, needs to be
catered to, and so forth. And then we have the economic environment. The economic environment is
one of the most important one, and usually will apply to most companies, and that will have to do with how much can a consumer pay for a product.
If the environment is
affluent, then they will agree to pay more for luxury products
than if there's a recession or there's not enough money to pay for necessities like food. Nobody will pay $1,000 for a Gucci bag if they can't buy food for their families. However, if they have a
lot of money in the sense that it's an affluent
market, not necessarily they themselves, but the
whole market is affluent, then they will agree to pay
more for luxury products.