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Environmental Analysis
Charles Blankson, Ph.D., Department of Marketing &
Logistics
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Marketing Environment
Actors and forces outside
marketing that affect marketing
managements/ strategy plannings
ability to develop and maintain
successful
transactions/ relationships with its
target audience(s)
Kotler and Armstrong (2005).
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Microenvironment
The actors/ forces close to the
company that affects its ability to
serve its customers. They include:
the company, suppliers, marketing
intermediaries such as retailers,
distributors, agents; customer
markets (other customer
segments), competitors and publics.
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Micro-environmental analysis
Industry/ Market analysis: monopoly,
oligopoly, duopoly, perfect competition.
Competitor analysis: number of
competitors, customer-oriented, self-
centered, competitor-centered, market
driven.
Customer analysis: the buying behavior
(individual or organizations), consumption
patterns, who is who?, what, how, where,
when, why, who buys our offerings?
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Macroenvironment
The larger societal forces that affect
the microenvironment. They include
demographics, economic,
technological, political, cultural and
natural forces.
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An Example of demographic force/ actor that
can affect a firms marketing
strategies/ management
There are seven US Generations that may
be appreciated by the marketer:
GI Generation, 74 years+ old (9.1%).
Depression, 64-73 yrs old (6.5%).
War babies, 58-63 yrs old (5.7%).
Baby boomers, 39-57 yrs old (28.2%).
Generation X, 27-38 yrs old (16.4%).
Generation Y, 9-26 yrs old (25.8%).
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Macro-environmental analysis
Political
Economic
Social
Technological
Legal
Environmental
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Political & Economic factors
Political factors:
International
National/ domestic or local.
Economic factors:
Long term
Short term
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PESTLE analysis contd.
Social factors
Technological factors
Legal factors
Environmental factors.
Others: Cultural, ethics, educational, rule
of law, natural resources, demographic,
immigration/migration.
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QUEST (Quick Environmental
Scanning Technique)
a future research process designed to
permit executives and strategic planners
in an organization to share their views
about trends and events in future external
environments that have critical
implications for the organizations
strategies and policies.
Nanus (1982, quoted in Baker, 1998).
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Implementation of QUEST
Review current environmental condition.
Explain purpose and methodology.
Review futuresliterature to stimulate thinking.
Define scope and boundaries for discussion for
stakeholders, performance.
Identify key issues in the environmental analysis.
Select agreed list.
Assess probability of occurrence.
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Some pertinent references
Connor, Paul (1999), In Sickness and in
Health: Exploring and Redeveloping a
Measure of Marketing Effectiveness,
J ournal of Marketing Management, Vol.15,
No.8, pp.733-756.
Clark, Bruce (1999), Marketing
Performance Measures: History and
Interrelationships, J ournal of Marketing
Management, Vol.15,No.8, pp.711-732.
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Importance of Environmental Analysis
Increased general awareness by management of
environmental change(s).
Better strategic planning and decision making.
Greater effectiveness in dealing with the publics
(e.g., local, national, international governments).
Understanding and appreciation of changes in the
industry and market, e.g., is it a growing industry?
changes in consumer decision making etc.
Appreciation of diversification, acquisitions,
resource allocation, foreign business.
Effectiveness in assessing PLC, NPD, firms SWOT
and marketing planning.
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Important announcement
Please read around the topic in your
textbook in Chapter 3 & 4 as a back up
to the preceding presentation and
discussion.