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1. ENVIRONMENTAL APPRAISAL
Concept of Environment
Environment means surroundings, external objects, influences or circumstances under which someone exists. The environment of any organisation is the aggregate of all conditions, events and influences that surround and affect it.
CHARACTERISTICS OF ENVIRONMENT
1.Environment is complex- it contain no. of factors,
CHARACTERISTICS OF ENVIRONMENT
3. Environment is multi-faceted- a particular
by another organisation.
CHARACTERISTICS OF ENVIRONMENT
4. Environment has a far-reaching impact- the
INTERNAL ENVIRONMENT
1. Strength is an inherent capacity which an
EXTERNAL ENVIRONMENT
3. Opportunity is a favorable condition in the organization's environment which enables it to consolidate and strengthen its position. E.g. economic boom, favorable demographic shifts, arrival of new technologies, favorable global influences.
EXTERNAL ENVIRONMENT
4. Threat is an unfavorable condition in the organization's environment which creates a risk for, or causes damage to , the organization. E.g economic downturn, demographic shifts, new competitors, unexpected shifts in consumer tastes.
SWOT ANALYSIS
SWOT analysis, evolved during the 1960s at
understand
environments.
their
internal
and
external
Analyze
1. Define the current strategy and spell the underlying assumptions. 2. Forecast the future environment. 3. Perform a gap analysis between step 1 & 2 4. Based on the gap analysis identify the need for strategy reformulation.
Buying power
ENVIRONMENTAL SCANNING
Definition:
environment to identify opportunities and threats affecting their business for the purpose of taking strategic decisions.
Marketing Environment
This consists of A) Task Environment B) Broad Environment a) Task Environment- This includes the actors
engaged in producing, distributing & promoting the offering i.e. the company, suppliers, distributors, dealers & the target customers. In service suppliers include marketing research agencies, advertising agencies, banking& insurance companies, transportation companies & telecommunication companies.
B) Broad Environment It consists of Six components1) Demographic environment 2) Economic Environment 3) Physical Environment 4) Technological Environment 5) political-legal Environment 6)Social- cultural Environment & Developments in these environments
Demographic Environment
The study of human population in terms of size, density, location, age, sex, race, occupation & their statistics.
Economic Environment
Factors including the effects of general economic conditions buying power willingness to spend spending patterns types of competitive structure competitive tools and competitive behaviour that influence both marketers and consumers` decisions activities
Depression: A period during which unemployment is relatively high , wages are very low, total disposable income is at a minimum and consumers lack confidence in the economy.
Legal Forces
Precompetitive legislation: Laws enacted to preserve competition and to end various practices deemed unacceptable by society. Office of fair trading: UK govt. office set up to oversee
Consumer Protection Legislation, In the UK Fair Trading Act(1973) Sale of goods Act(1979),etc. Growth of public interest groups Consumer Association: a Private organization, funded by members subscriptions, that works to furthe consumer interests. Increased emphasis on ethics and socially responsible actions.
Technological Environment
Technology: the knowledge of how to accomplish tasks and goals. Forces that create new technologies, creating new product & market opportunites.
Increased regulation
Effect of technology on society Effect of technology on marketing Technology assessment
Physical Environment
Natural resources that are needed as inputs by marketers or that are affected by marketing activities. issues shortage of raw materials Increased pollution Government intervention in natural resource management
and activities.
Cultural Environment
Persistence of cultural values: core and secondary beliefs Shifts in secondary cultural values people`s view of themselves people`s views of others People`s views of organizations People`s views of society People`s views of nature People`s views of the universe.
Social Environment
Living standards and quality of life.
Green movement: the trend arising from society`s
International Environment
Globalisation, its process, content and direction. Global economic forces. Global trade and commerce, its process and trends Global financial system, sources of financing. Global financial shifts Global legal system Global markets and competitiveness.
Market environment
Customers of client factors such as needs, preferences , perceptions. Product factors such as demand, image, features , utility, function, design, life cycle. Marketing intermediary factors levels and quality of customer service. Competition-related factors such as different types of customers, etc.
Regulatory environment
The constitutional framework, directive principles,
fundamental rights and division of legislative powers
control.
Supplier environment
Cost, , availability of finance for implementing plans and projects. Cost and availability and reliability of energy used in production. Cost, availability and the existence of sources and means for supply of plants and machinery , spare parts and after-sales service. Infrastructural support and ease of availability of the diffrenet factors of production, bargaining power os suppliers and existence of susbstitutes