Product Management Chapter 2
The External Marketing Environment
Marketing environment
- encompasses all the internal and external
factors that drive and influence
- vast and diverse, consisting of controllable
and uncontrollable factors
Marketing managers- must stay aware of the
marketing environment
A good grasp of your marketing environment helps
to:
1. Identify opportunities- notice and take
advantage of market opportunities before
losing your edge
2. Identify threats- alerts you to potential
threats which may affect your marketing
activities
3. Manage changes- helps manage changes
and maintain growth in a dynamic economy
Features of a Marketing Environment:
❖ Dynamic- constantly change over time
➢ technological advancements
➢ industry regulations
➢ customer tastes
❖ Relative- unique, distinctions, sell quicker in the
U.S
❖ Uncertain- unpredictable; unexpected threats
or opportunities in your marketing operations
Adept marketers- must be able to learn, pivot, and
strategize quickly to achieve their goals.
❖ Complex- coordinate your team’s ability and
resources with stakeholder expectations
Two significant types of marketing environments:
Internal marketing environments- (controllable)
factors that fall within your control and impact your
marketing operations, including:
➢ organization's strengths
➢ weaknesses
➢ uniqueness
➢ competencies
Essential marketing elements:
✓ people and teams
✓ quality of product or service
✓ capital assets and budgets
✓ company policy
External marketing environments- (controllable
or uncontrollable) factors that do not fall within your
organization's control, including:
➢ technological advancements
➢ regulatory changes
➢ social
➢ economic
➢ competitive forces
External marketing environment can be broadly
categorized into:
Micro marketing environment- closely linked to
your business and directly affects marketing
operations (controllable to some extent)
customers, suppliers, business partners, vendors,
and even competitors
Macro marketing environment- all the factors
beyond the control of your organization; PESTEL
PESTEL analysis
- strategic framework commonly used to
evaluate the business environment
- used by management teams and boards in
their strategic planning processes
- help their clients develop innovative product
and market initiatives
PESTEL:
Political factors- are those driven by government
actions and policies
• Corporate taxation
• Other fiscal policy initiatives
• Free trade disputes
• Antitrust and other anti-competition issues
Economic factors- relate to the broader economy
and tend to be expressly financial in nature
• Interest rates
• Employment rates
• Inflation
• Exchange rates
Social factors
- tend to be more difficult to quantify than
economic ones
- shifts or evolutions in the ways that
stakeholders approach life and leisure
INCLUDES:
• Demographic considerations
• Lifestyle trends
• Consumer beliefs
• Attitudes around working conditions
Technological Factors- technology is everywhere
– and it’s changing rapidly
• Automation
• How research and development (R&D) may
impact both costs and competitive
advantage
• Technology infrastructure (like 5G, IoT, etc.)
• Cyber security
Environmental factors- changes to our physical
environment can present material risks and
opportunities for organizations
• Carbon footprint
• Climate change impacts, including physical
and transition risks
• Increased incidences of extreme weather
events
• Stewardship of natural resources (like fresh
water)
Legal factors- are those that emerge from
changes to the regulatory environment
• Industry regulation
• Licenses and permits required to operate
• Employment and consumer protection laws
• Protection of IP (Intellectual Property)
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Three kinds of companies:
• those who make things happen
• those who watch things happen
• those who wonder what’s happened
Advertorials- ads expressing editorial points of
view
Chapter 3
Product Management- product planning and
product marketing
Market cycle
- refers to economic trends observed during
different types of business environments
- aka stock market cycle, wherein a given
security, or multiple securities belonging to
the same class of assets
New market cycle- may be formed when a new
technology innovation disrupts existing market
trends
Four phases of a market cycle:
➢ Accumulation phase
- takes place immediately after the market
reaches the bottom
- switch from being negative to neutral; the
market is still bearish
➢ Mark-up phase
- investors begin to jump in by the large, and
a substantial rise in market volumes
- switches from being neutral to bullish or
even euphoric in some cases
➢ Distribution phase
- traders start selling securities
- from being bullish to mixed
- transition is gradual and may last for a long
time
➢ Mark-down phase
- proves to be terrible for investors who still
hold positions
- beginning of the next accumulation phase
Product policy
- concerned with defining the type, volume,
and timing of products a company offers for
sale
- general rules set up by the management
itself in making product decisions
Good product policies- basis on which the right
products are produced and marketed successfully
Product policy generally covers the following:
Product Planning and Development
- attempt to establish the product in line with
market needs
- supervising the search, screening,
development and commercialization of new
products
Product Line- group of products that are
closely related
Product Mix
- broad term which refers to the total
assortment of different commodities
marketed by a firm (composite)
- e full list of products offered for sale by a
company
Four characteristics:
✓ Length- total number of items in its product
mix
✓ Depth- average number of items sold by a
company within a single product line
✓ Width- judged by the number of different
product lines dealt with a company
✓ Consistency- how many product lines are
closely related in production requirements
Product Branding- great deal of long-term
investment spending, especially for advertising,
promotion, and packaging
Branding- process of identifying the name of the
producer with the product
Product Positioning- brand’s objective
attributes in relation to other brands
Position- art of selecting, out of several unique
selling propositions
Four important components of product positioning:
✓ Perpetual mapping
✓ Product benefit
✓ Market segmentation
✓ Product categories
Product Packaging- an important tool for face
lifting of a product
Packaging
- intended to protect, identify, differentiate,
improve handling, convenience, and
promote the sale of the product
- “silent salesman”
- defined as the protection of materials for all
kinds of means of containers
Types of packaging of industrial products:
• Paper wrapper- super thin wrappers
traditionally made from rice, water and salt
• Tin container
- tin-plated steel, used predominantly for food
storage
- by Peter Durand in 1812, then sold his
patent to two Englishmen, Bryan Donkin
and John Hall
Tin box- tinplate container
Tinplate metal- primarily steel with a very thin tin
coating
• Cloth packaging- tailor-made to complement
the branding (fashion label)
• Cardboard packets/boxes- are industrially
prefabricated boxes
• Plywood Boxes- made of several thin layers
(or plys) of wood, glued and pressed together
• Plastic packaging- allows us to protect,
preserve, store and transport products in a
variety of ways
• Wooden packaging- used in supporting,
protecting, or carrying goods