MRKTNG 3000 1st Edition Lecture 2 Outline of Last Lecture I What is marketing II Marketing s first task III Marketing s second task IV Product vs price vs promotion vs placement V Example VI Benefits VII Costs Outline of Current Lecture I Analyzing the marketing environment a Shoe industry example b NFL example c Chinese food industry example II Three stages of strategic marketing plan a 1 Defining the mission and or vision i Porter s Five Forces model ii BCG portfolio model iii Sustainable competitive advantage b SWOT Analysis III Hypothetical market structure and strategies Current Lecture Analyzing the marketing environment 40 billion diet industry Increased consumption of health and diet products Businesses responding to the demand in a variety of ways How do companies identify potential changes trends that may affect them Market research These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Marketing environment analysis framework Consumers immediate environment competition corporate partners company Macro environment demographics social technology economic political legal culture Ex What types of macro environmental factors have affected the athletic shoe industry in the past five years technological changes child labor laws Wearing athletic shoes for looks What might affect the NFL in the next five years Concussion sensitivity NFL Other sports are on the rise Rule changes making the game more exciting Recovery from recession allowing more people to attend games Technology making TV watching better hurting attendance What about Chinese restaurants in the USA Increased competition makes Chinese food less special MSG concern over health Healthy restaurants developing fusion products Many restaurants are privately owned and many owners are older can t get up to speed on technology Three stages of strategic marketing plan 1 Defining the mission and or vision Two questions to answer 1 In which industries businesses should we operate 2 What is our sustainable competitive advantage 1 Porter s Five Forces Model Corporate Strategy In which industries do we want to compete Industry Profitability dependent on 1 Industry competitiveness Intensity of current competitors Low intensity higher profitability Industry has lower intensity when there are fewer firms Ex Commercial aircraft manufacturing airplanes aka Boeing 2 Availability of substitute products Customers can choose different products as a substitute Few or no substitutes higher profitability Examples of few no substitutes Gas proprietary drugs Examples of many substitutes Fresh veggies soft drinks technological products 3 Potential entrants threat of new competition High barriers to entry higher profitability High barriers to entry exist when High capital requirements Economies of scale are present High product differentiation ex wristwatches Network externalities Technological or learning curve 4 5 Supplier buyer power Lower bargaining power of suppliers buyers higher profitability Lower bargaining power when High number Low information Lower supplier power example Computer industry hard disk drives Lowe buyer power example Medical services patients Allocating resources using BCG portfolio model 2 Sustainable competitive advantage An advantage versus competition that can be maintained consistently over time Ex McDonald s operational excellence Macro strategies for developing customer value Product excellence customer excellence or operational excellence customer value Customer excellence Retaining loyalty with excellent customer service Operational excellence Efficient operations excellent supply chain management Product excellence achieving effective branding and product positioning 2 SWOT Analysis Used to evaluate strengths weakness opportunities threats of a business or venture Intensive growth strategies product market expansion grid Hypothetical market structure and strategies Market leader40 Wants to expand market defend market share expand market share Market challenger30 Wants to attack leader or maintain their status quo Market follower20 Wants to imitate Market nicher10 Wants to specialize