Principals of Marketing free essay sample

Suppliers Suppliers provide businesses with the materials they need to carry out their business activities. A suppliers behaviour will directly impact the business it supplies. For example if a supplier provides a poor service this could increase timescales or product quality. An increase in raw material prices will affect an organizations Marketing Mix strategy and may even force price increases. Close supplier relationships are an effective way to remain competitive and secure quality products. Shareholders As organizations require investment to grow, they may decide to raise money by floating on the stock market i. e. move from private to public ownership. The introduction of public shareholders brings new pressures as public shareholders want a return from the money they have invested in the company. Shareholder pressure to increase profits will affect organizational strategy. Relationships with shareholders need to be managed carefully as rapid short term increases in profit could detrimentally affect the long term success of the business. Media Positive media attention can â€Å"make† an organization (or its products) and negative media attention can â€Å"break† an organization. Organizations need to manage the media so that the media help promote the positive things about the organization and reduce the impact of a negative event on their reputation. Some organizations will even employ public relations (PR) consultants to help them manage a particular event or incident. Consumer television programmes with a wide and more direct audience can also have a very powerful impact on the success of an organization. Some businesses recognize this and will change their reaction when consumers mention that they are going to contact a consumer television programme or the newspapers about the business. Competitors The name of the game in marketing is differentiation. Can the organization offer benefits that are better than those offered by competitors? Does the business have a unique selling point (USP)? Competitor analysis and monitoring is crucial if an organization is to maintain or improve its position within the market. If a business is unaware of its competitors activities they will find it very difficult to â€Å"beat† their competitors. The market can move very quickly for example through a change in trading conditions, consumer behaviour or technological developments. As a business it is important to examine competitors responses to these changes so that you can maximize the impact of your response. Conclusion Businesses cannot always control micro environment factors but they should endeavour to manage them along with Macro Environment and Internal Environment factors. MACRO ENVIRONMENT A macro environment comprises the external factors that can influence a business. These factors are often out of the control or management ability of a company. Factors typically include economic, demographic, political, and technological forces in business. Economic environment The economic trends identify trends such as changes in personal disposable income, interest rates, inflation and unemployment rates. Business owners and managers often spend copious amount of time and effort to assess the overall economic environment in order to determine the number and strength of each factor. Strategies and performance reviews can help owners and managers use the macro environment factors to create a competitive advantage for their respective companies. Supply and demand General economic factors in the macro environment can include supply and demand, number of competitors in the market, availability of economic resources, and efficient production methods employed by companies. Each of these factors impact a company’s production output and potential profit margins when selling goods and services to consumers. Free market economies often have more competition because more individuals and businesses can avail themselves to the raw materials, labor, and facilities in the market. Demographics Demographics relates to information about the consumers in an economic market. This information includes statistics on consumer age, sex, race, religion, education, household size, marital status, and other similar information. Companies use this information to create products and marketing strategies to meet the needs of each consumer in the macro environment. This information also plays a role into general economic factors. Companies must be able to determine consumer supply and demand by measuring consumer income and the desire to spend money on various goods and services. Demographic Trends identify trends in population growth at relevant ages for your industry (There may be zero population growth in general but high growth in the number of people over 65), the population location. Political Trends This identifies changes in the position politicians take on issues. A current example is a shift towards greener policies in the developed world. Technological Trends: The macro technological environment analysis will identify changes in the application of technology. A current example is a shift towards online transactions and in some areas a shift away from online transactions. Legal Trends The macro legal environment analysis is closely linked to the political environment (politicians tend to make the laws), but also includes trends in court decisions – such as liability compensation. Social/Cultural Trends The macro social/cultural environment analysis will identify trends in society’s beliefs, behaviors, values and norms such as the number of part time workers, attitudes towards global warming and makeup of the family structure.