Marketing Strategy | Analyzing Marketing Environment | PART 1 | Lecture 7

Summary

This chapter delves into analyzing the marketing environment, emphasizing the importance of understanding external factors that influence business strategies. It distinguishes between micro and macro environments, highlighting the roles of suppliers, intermediaries, competitors, and publics in a company's micro environment. The script illustrates how companies like Walmart leverage cost-effective operations and strategic partnerships to create value for customers, stressing the need for building strong relationships with customers for business success.

Takeaways

• 📚 Analyzing the marketing environment is crucial for understanding external factors that can affect business strategies and preparing technology-based marketing strategies.
• 🤝 The marketing environment includes both micro and macro environments, which consist of various actors that can influence a company's ability to build and maintain customer relationships.
• 🔍 Micro environment involves actors close to the company, such as suppliers, marketing intermediaries, customer markets, competitors, and publics, who directly interact with the company.
• 🔑 Successful marketing hinges on building strong relationships with customers, emphasizing the importance of being more than just a transactional entity.
• 🔄 The company's micro environment can significantly affect the value provided to customers, requiring good relationships with suppliers for quality materials and cost-effective operations.
• 🏢 Internal departments like top management, finance, R&D, and operations must work in harmony to create customer value and maintain a competitive edge.
• 🛒 Marketing intermediaries are essential for promoting, selling, and distributing products, and forming partnerships can help reduce operational costs.
• 💡 Competitors play a role in setting industry standards, and companies must position their offerings strategically to gain a competitive advantage.
• 🌐 Publics, including financial, media, government, citizen action, local, and internal publics, can have an impact on a company's operations and objectives.
• 🌟 The macro environment, to be discussed in the next video, will further elaborate on broader factors that can influence a company's marketing strategies.
• 🚀 Companies like Walmart leverage outsourcing and strategic partnerships to keep operational costs low, providing more value to customers and gaining market share.

Q & A

What is the main focus of Chapter 3 in the transcript?

The main focus of Chapter 3 is analyzing the marketing environment, including understanding the market environment, external factors affecting a business, and how to prepare a technology-based marketing strategy.

Why is it important to consider the opponent's move in a marketing strategy?

It is important because the strategy a business creates should be responsive to the habits and moves of the competition, similar to a game of chess, to effectively capture market attention and receive community response.

What are the two types of environments a company operates within according to the transcript?

A company operates within a micro environment and a macro environment. The micro environment consists of actors close to the company, while the macro environment includes broader factors that affect the entire market.

What does the term 'actors' in the context of the micro environment refer to?

In the context of the micro environment, 'actors' refer to people, places, things, and technology that interact directly with the company and can affect its ability to serve its customers.

Why are competitors considered an important part of a company's micro environment?

Competitors are important because they serve as a standard for the company to beat, meet, or exceed, thereby driving the company to constantly improve and innovate.

What role do suppliers play in a company's value delivery system?

Suppliers provide the necessary resources and quality parts to produce goods and services, acting as partners in creating customer value and contributing to the company's success.

How does Walmart's relationship with its operations department impact its marketing promises?

Walmart's marketers can promise low prices only if its operations department delivers low costs, which includes efficient packaging, shipping, procurement, and stock handling.

What is the significance of marketing intermediaries in a company's micro environment?

Marketing intermediaries help the company promote, sell, and distribute its products through various channels, such as resellers, physical distribution firms, marketing service agencies, and financial intermediaries.

Why are publics considered an important part of a company's micro environment?

Publics, including financial, media, government, citizen action, local, and the general public, can have an actual or potential interest in or impact on an organization's ability to achieve its objectives.

What is the role of internal publics in a company?

Internal publics, which include employees and people within the organization, are crucial as they can significantly influence the success or failure of the business through their actions and contributions.

What is an example of how a company like Walmart uses its micro environment to its advantage?

Walmart keeps its operation costs low by outsourcing production activities to China, where it has built factories with lower labor costs, allowing it to offer products at competitive prices in the US market.

Outlines

00:00

🎯 Understanding the Marketing Environment

The first paragraph introduces the concept of analyzing the marketing environment in a business context. It emphasizes the importance of external factors and how they can influence a company's marketing strategy. The analogy of chess is used to illustrate the dynamic interaction between a company and its market environment. The paragraph explains that a business must adapt its strategy based on market observations and the behavior of competitors. It also introduces the idea of the marketing environment consisting of both micro and macro environments, with the micro environment including actors such as suppliers, marketing intermediaries, customer markets, competitors, and publics. The importance of building and maintaining successful relationships with customers is highlighted, as it is fundamental to the success of any business.

05:01

🔗 The Interconnectedness of a Company's Micro Environment

The second paragraph delves deeper into the micro environment, discussing the interconnected roles of various actors such as suppliers, marketing intermediaries, and competitors. It uses the example of Walmart to illustrate how a company can leverage its micro environment to create value for customers by keeping operational costs low, which in turn allows for competitive pricing. The paragraph also touches on the importance of partnerships with suppliers and marketing intermediaries to ensure the delivery of quality products and services. Furthermore, it explains the role of competitors in driving a company to improve and the significance of publics, including financial, media, government, citizen action, local, and the general public, in influencing a company's ability to achieve its objectives.

10:03

🌐 The Impact of Publics on Business Operations

The third paragraph focuses on the role of publics in a company's micro environment. It categorizes publics into financial, media, government, citizen action, local, general, and internal publics, explaining how each group can affect a company's operations and objectives. The paragraph provides examples of how these publics can influence business decisions and outcomes, such as financial publics setting tax rates and government publics regulating trade practices. It also highlights the importance of internal publics, emphasizing that employees can significantly impact a company's success or failure. The paragraph concludes with a cautionary tale about the first computer virus, which originated from within an organization, underscoring the need to manage internal publics effectively.

Keywords

💡Marketing Environment

The 'Marketing Environment' refers to the external factors that impact a business's ability to create and maintain successful relationships with customers. It is a central theme of the video, emphasizing the importance of understanding and adapting to these factors to develop effective marketing strategies. The script discusses how the marketing environment includes actors and forces that can either improve or hinder a company's interactions with its customers.

💡Technology-based Marketing Strategy

A 'Technology-based Marketing Strategy' is a plan that leverages technological tools and platforms to reach and engage with customers. The video suggests that such strategies are crucial for businesses to gain attention and elicit responses from the community, highlighting the role of technology in modern marketing practices.

💡Micro Environment

The 'Micro Environment' consists of the internal and closely related external factors that affect a company's ability to serve its customers effectively. The script explains that it includes actors such as suppliers, marketing intermediaries, customer markets, competitors, and publics, who directly interact with the company and can influence its operations and customer relationships.

💡Macro Environment

Although not detailed in the script, the 'Macro Environment' refers to the broader external factors that can influence an organization, such as economic conditions, political regulations, societal norms, technological advancements, and demographic changes. It is mentioned as a topic for the next video, indicating its significance in the overall marketing environment.

💡Value Delivery System

The 'Value Delivery System' is the network of internal and external actors that work together to provide value to customers. The script uses this term to describe how a company's suppliers, marketing intermediaries, and other partners contribute to creating a high-quality product or service experience for the end customer.

💡Competitors

In the context of the video, 'Competitors' are other firms offering similar products or services in the market. They are important as they set the standard against which a company measures its own offerings. The script gives an example of Walmart creating generic brands to compete with well-known products by offering similar quality at a lower price.

💡Publics

'Publics' are groups that have an interest in or can impact an organization's ability to achieve its objectives. The script identifies various types of publics, including financial, media, government, citizen action, local, and the general public, each with different influences on a company's marketing efforts.

💡Customer Relationships

Building 'Customer Relationships' is highlighted as a fundamental aspect of marketing. The video script stresses that without a relationship with customers, a business cannot thrive. It is about being friends with the customer and creating value to maintain long-term connections.

💡Market Observation

'Market Observation' involves monitoring and analyzing the market to understand trends, consumer behavior, and competitor actions. The script uses the analogy of a chess game to illustrate the importance of adapting strategies based on market observations to effectively 'attack' the market.

💡Internal Publics

The 'Internal Publics' are the people within an organization, including employees and stakeholders, who can significantly affect the company's success or failure. The script warns of the potential risks posed by internal publics, as illustrated by the Morris worm incident, emphasizing the need to manage and prioritize internal relationships.

💡Suppliers

'Suppliers' are external entities that provide the necessary resources, such as raw materials or components, for a company to produce its goods or services. The script explains that having strong relationships with suppliers is crucial for ensuring the quality of the final product and, by extension, customer satisfaction.

Highlights

Chapter 3 focuses on analyzing the marketing environment and its impact on business strategies.

The market environment is likened to a game of chess, where business strategies are contingent on the moves of competitors.

Business success hinges on building and maintaining successful relationships with customers.

The marketing environment encompasses external actors and forces that influence marketing management's effectiveness.

Two types of environments are identified: micro and macro, with micro environments being closer and more directly interactive with the company.

The micro environment includes suppliers, marketing intermediaries, customer markets, competitors, and publics.

Suppliers are crucial partners in providing quality materials for a company's products.

Marketing intermediaries play a role in promoting, selling, and distributing a company's products.

Competitors serve as benchmarks for companies to improve and exceed in the market.

Publics can influence a company's objectives and include financial, media, government, citizen action, local, and internal publics.

Internal publics, such as employees, can significantly impact a company's success or failure.

The value delivery system aims to serve target customers and create strong relationships with them.

Walmart's example illustrates how a company's micro environment can affect the value provided to customers.

Operational efficiency, such as low-cost structures, can lead to delivering lower prices to customers.

Partnerships with suppliers and marketing intermediaries can help reduce operational costs.

Competitive strategies involve positioning offerings against competitors to gain a strategic advantage.

Publics, both internal and external, have a direct or potential impact on a company's ability to achieve its objectives.

The next video will discuss the macro environment, expanding on the factors that affect a company on a larger scale.

Transcripts

Hello friends welcome back this is

chapter 3 and we are now talking about

analyzing the marketing environment in

this chapter you're going to learn what

is the market environment what are the

external factors that will affect you as

a business and how you can prepare your

Technology based marketing strategy

better okay this is like like a game of

chess you have to play according to your

opponent you cannot just keep playing by

yourself your uh move is directly

dependent on the move of your opponent

so you know the strategy that you create

is based on the habits of your opponent

so it's like you know a complete Market

observation going on and based on the

market observation you're supposed to be

developing a strategy to attack the

market so that you get complete

attention and at the same time you get a

response from the

community based on you know whether they

approve of the product they find your

product uh popular or they find it

fulfilling a need want etc etc so there

many factors that will help you uh

Define the market environment and many

factors that will help you adjust to

that environment as a business uh by

attracting your community with the aid

of Technology based marketing okay the

marketing environment includes the

actors and forces outside marketing that

affect marketing Management's ability to

build and maintain successful

relationships with the customers so

ultimately we're looking at building

successful relationship with the

customers remember if you do not have a

relationship with your customer you

don't have a business so marketing is

all about uh being friends with the

customer there many more things that we

will uncover in this chapter there are

two kinds of environment a company an

organization has a micro environment and

it has a macro environment okay micro

means small micro environment consists

of the actors close to the company that

affect its ability to serve its

customers the company Supply ERS

marketing intermediaries customer

markets competitors and publics okay

when I use the word actors I don't want

you to get confused because actors

simply means people places things

technology that is interacting with your

company and these interact directly with

your company and they are close Okay in

a micro environment these are actually

close to your company and they all alter

It's ability alter means U modify or it

you know either improves or makes it

worse uh with the way you interact with

the customers your suppliers your

marketing intermediaries customer

markets competitors and publics the

company's micro environment is something

like this this is the marketing

environment and you have the company and

towards the end here of the Spectrum you

have

customers the company needs suppliers

marketing intermediaries and competitors

you know competitors are needed so that

the company can improve you always have

to have a form of a standard competitors

are usually your standards you know uh

which you have to beat meet exceed and

uh work towards so Publix is you know

the general uh community that will be

interested in your your product to

service your potential customers and

then customers are your the actual uh

you know parts of the publ if it's a

vend diagram you can have say that the

customers are a subset of your publ so

customers are those parts of the publ

that actually uh purchase your product

or service so in creating value for

customer markets customers marketers

must partner with other firms in the

company's value delivery Network for

example Lexus the car maker can't create

a high quality ownership experience for

its customers unless its suppliers

provide quality parts and its dealers

provide High Sales and Service quality

so as a business if you are providing

any kind of service or any kind of

product you must have excellent

relationships with your suppliers you

should have uh you know the vertical

markets that provide your raw materials

you must have have very good

relationship with them so that they can

provide you with quality material and in

return you can provide this value to

your customer and win the market share

okay the company marketers must work in

harmony with other company departments

to create customer value in

relationships for example Walmart's

marketers can't promise US low prices

unless its operations Department

delivers low cost so if you keep your

cost low your packaging your shipping

your uh procurement your stock handling

all of these costs if your operation

costs are low you will deliver the low

cost to your customer so let me tell you

one thing about Walmart there is a very

famous documentary on Walmart that most

of the factories that they have or most

of the stuff that they produce in their

store they get it from China now not

only do they get it made from China they

have purchased land in China where they

have built their own factories Walmart

factories that create products by

Chinese uh employees who they pay very

less fraction of the amount that they

would have spent in United States so

these people the Walmart it keeps its

operations cost Low by Outsourcing its

production activities and then when the

items are shipped to the United States

they are slightly higher in price but

still relatively lower than the

competitors so this is how a company's

micro environment plays a major role in

affecting the value provided to the

customer at this end of the spectrum you

have customers and customers are the

most important actors in the company's

micro environment because they will

ultimately drive your Market okay and uh

the aim of the entire value delivery

system this is a value delivery system

all of these actors are very important

to deliver value to the customer the aim

of the entire value delivery system is

to serve Target customers and create

strong relationships with them okay the

company's micro

environment top management Finance R&D

this is the my environment within the

company you have top management you have

finance department you have research and

development you have purchasing

operations and accounting suppliers

provide the resources to produce goods

and services they are treated as

partners to provide customer value okay

usually you would see for example

logistics companies like uh TCS

DHL and many more what they do is they

have partnered with many many organiz

izations that they would provide them

lower uh delivery shipping and handling

costs as compared to other people uh

provided that they have a contract for 6

months and one year and then everything

that they make uh will be delivered

through that company so most people what

they do is they form partnership uh such

Partnerships with the marketing

intermediaries and suppliers so that uh

they can keep their cost low operation

cost low the the company's micro

environment marketing intermediaries

help the company to promote sell and

distribute its products you have

resellers you have physical distribution

firms you have marketing Services

agencies you have Financial

intermediaries so you have all of these

actors in the marketing intermediaries

we're going to discuss them in detail

which is why I'm not going in detail

right

now okay competitors firms must gain

strategic Advantage by positioning their

offering against competitors offerings

so I mean if you look at Walmart they

have products that are uh generic okay

if you buy Nia from somewhere you know

the moisturizer Nivea and many Johnson

and Johnson products for babies and many

famous you know products that you can

see Walmart will make a generic brand

and it it calls it equate and what it

does is it keeps the product very

similar in quality a little bit inferior

but similar okay somewhat similar in

quality with the uh original product

it's not a fake product we're not

talking about something fake here we're

not even talking about an imitation here

we talking about a new product with a

slightly different texture and feeling

but reminding you strongly of the

original product and the price is much

lower sometimes even half the price or

25% less than the price so this is how

Walmart competes with the original

product providers by keeping its cost

low and providing more value to the

customer publics are any groups that

have an actual or potential interest in

or impact on an organization's ability

to achieve its objectives and they

include Financial publics media publics

government publics citizen action

publics local public the general public

and the internal public

so Financial publics are those people

that are responsible for coming up with

financial mandates laws and legal

actions and everything so they decide on

taxes they decide on you know any kind

of customs and duties and any kind of

fines and all of these things so these

are the financial publics in general the

government financial sector that decides

how trades and tariffs would be carried

out across border within the country and

you know many such uh rules are

established by them and they directly

have an effect on the price of the

product or service media public these

are the Publix that are responsible for

traditional advertising okay for example

television radio uh newspaper magazines

advertisement on the banners outside uh

advertisement on buses and public

transportation all of these

government publics these are the you

know the rule makers policy makers the

lawmakers they decide how what licenses

what auditing methods and all of those

things okay citizen action publics are

those publics that Express their

concerns they that Express their needs

their desires their want they wish list

and they let you know what they want

local publics is similar to the citizen

publics and uh I guess the local publics

are the general public at the same time

okay there's this general public as well

okay citizen local and general publics

are interchangeable with a few minor

differences between each other but the

idea here is that the public different

kind of public around your company is

going to have an impact on and how you

do business and internal publics are the

people within your organization very

very important people to consider when

you're running a business because they

can make or break your business many

many things that you need to consider

sometimes we don't even know about them

so uh let me tell you one thing at this

point you know when the Internet was

developed in um 1980s

1970s uh the

first computer virus was not developed

by somebody who was outside the company

that was developing the internet the

arpanet at the United States Pentagon it

developed the first um you know internet

communication protocol and the there was

this worm that was the virus moris virus

that was created and it was not created

by anybody outside the organization it

was created by somebody who was internal

the internal public so you have to take

care of your internal publics because

they can make or break your organization

you know they can commit the kind of

crimes nobody else can commit so you and

this moris worm was it it created

millions millions of losses at that time

because it destroyed a lot of computers

and mainframe computers and

supercomputers at that time and it cost

companies a lot of money so you need to

make sure that your internal Publix is

your priority you need to take care of

your

employees okay let's pause the lecture

here and uh in the next video I'm going

to talk about the macro environment okay

so stay tuned I'll be right

[Music]

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