Macro and Micro environment factors that influence marketing

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Table of Contents

Introduction.....................................................2

Task 1.........................................................2

2.1 Macro and Micro environments factors that influence marketing...............2

2.2 Positioning strategies...........................................5

2.3 Targeting strategy.............................................5

2.4 Buyers’ behaviour activities that affect marketing........................5

2.5 Segmentation strategy..........................................5

Task 2 ........................................................7

3.1 Product development andsustainable competitive advantage.........................................7

3.2 Distribution strategy.........................................................................................................7

3.3 Pricing strategy.................................................................................................................7

3.4 Promotional strategy........................................................................................................7

3.5 Extended marketing mix..................................................................................................7

4.1 Planning marketing mix for two different segments in consumer markets.........7

4.3 International marketing strategy....................................9

Task 3........................................................11

4.2 Marketing products and services for B2B markets.......................11

References.....................................................12

Introduction

Marketing is the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably ( Chartered Institute of Marketing).

This report will focus on strategic marketing management for “Earhart International airlines” together with internal and external factors affecting it. It also includes the company’s position in the market and on that basis evaluating different strategic options and implementing the best one. The current rivals for the “Earhart International airlines” are Easy Jet, Rynair, Jet2 and new entrant Virgin.

Task 1

2.1 Macro and Micro environment factors that influence marketing

There are a number of factors that can influence marketing decisions. These factors are micro (Internal) and macro (external) factors (Chisnall and Peter, 1995). The external environment consists of a range of factors that could be analyzed using different models and one of them is PESTLE analysis (Christopher and Payne, 2001)

PESTLE Analysis

Political external factors:

The increase in the amount of the EU states implies that there will be a consistent increase in the demand for business and holiday flights inside the EU. This is ideal for "Earhart International Airlines".

Decisions, for example, abolishing duty free sales at airports have negative effects on business for low budget airlines. The duty free industry at runways is worth a £4.3 billion a year (BBC 1999). It has been cautioned that abolishing the duty free sales could prompt an increase in the landing charges for carriers as runways get back a percentage of the cash they lose by not selling duty free merchandise (BBC 1999).

Economic:

Gradual increase in fuel prices everywhere throughout the world particularly in the EU presents a negative environment for the organization which works. Plane fuel costs expanded 800% somewhere around 2002 and 2008, fuel represented 10% of airline expenses in 2000 and by 2008 it represented in excess of 40% .

Low cost flight airlines get subsidies on several airports over the Europe and "Earhart International Airlines" is no exception. These subsidies come in the form of giving free staff at the air line's check booths, free landings and subsidies for new routes to sway airlines to travel those routes even while they are unfruitful.

Social:

There has been a build up in demand to fly out to more European destinations. A number of these destinations have ended up hotspots with numerous individuals going there for short breaks, parties and so on. There has additionally been expanded business travel on the continent.

Technological:

The development in web business has managed the airline a chance to expand its sales by method for web marketing. However, there is additionally increased rivalry on the grounds that different airlines likewise utilize the same medium. The web has turned into a spot where customers can get modest tickets to go in Europe.

Environmental:

The significance of environmental: issues, for example, greenhouse emissions and noise level controls has expanded throughout the years. There has been expanding concern over the carbon foot print of the airline industry with calls to decrease it (FAA 2004), even runway extension arrangements are regularly deferred or scratched off (FAA 2004).

Legal:

Allegations of misleading advertising when promoting city destinations while it is going to secondary airports which are a long way from the promoted urban areas.

Porter’s five forces Model

Threats of New Entrants:

There is a significant risk of new contestants because of the increase in demand for short flights. Be that as it may, the expenses of starting an airline organization are generally high and this implies that the risk of new contestants is not excessively high however medium.

Intensity of Industry Competition:

As showed in the case study, there are numerous airlines in the business and there is extreme rivalry between them. This might be seen by the aggressive marketing notice on the internet and off as well. The airlines are continually offering value cuts and different deals systems to pull in clients, thats why "Earhart International Airlines" need to have a aggressive promoting campaign keeping in mind the end goal to support sales. This could be as low costs and high services for the passengers.

Threat of substitute products:

This is not high however is considerable. There are fast trains that travels between European nations, for example, Euro star in the middle of London and Paris and the TGV inside France. Trains are not an incredible danger on the grounds that they are not prone to substitute air travel much. Along these lines, this conveys medium risk.

Suppliers’ bargaining power:

Airport charges, for example, landing charges are for the most part positive to ease airline like "Earhart International Airlines" to urge them to explore new routes. It can dismal that the suppliers' power is low.

Buyers’ bargaining power:

Their bargaining power is likewise low. Individuals don't have immediate substitutes to travel via air thus don't have any immediate impact influence on the air fares.

2.2, 2.3, 2.5 Segmenting Targeting and Positioning strategies

To improve a marketing strategy, it is extremely vital for “Earhart International Airlines”. to comprehend its target clients . In the event that the organization can comprehend its client then just it can impart itself to their consumer Market. Better “Earhart International Airlines” know about its customers, more effectively it could impart and market them.

In terms of segmentation, the organization lean towards overall population. This relates on offering the most reduced fare in the business. This empowers the organization to come up with the techniques in the current social and monetary changes in environment, especially the current issues in financial crisis. On the other hand, much the same as different airlines, the organization additionally offers administrations and items focusing on the premium clients, who are eager to pay higher cost for better services.

Low-cost airlines such as “Earhart International Airlines” works in market niches; concentrating on passengers who want to travel via small routes (time oriented) and to those who are cost sensitive, knowing that thistarget market consist of the biggest market share.

The main market for the low-cost airlines would be people who do not want additional services such as food in the plane, people who can buy cheap fares, in other words an individual with low salary can bring out his day going through air and need to keep away from occupied airstrips.

2.4 Buyers’ behavior activities that affect marketing

A model of consumer buying behavior is demonstrated beneath which might be applicable to Earhart International Airlines and it serves to recognize the consumer buying decision.

The model portrays the customer's perception towards diverse purchase factors, these variables runs through shopper mind and after a while the customer can reach a conclusion of purchase or no buy (Chisnall and Peter, 1995). The consumer takes number of external and internal factors before making the purchasing choice. Mental variables are paramount, e.g. what services the airline is offering to its passengers. The ad of the item must be connected with the authenticity of the consumer buying conduct, if the advertisement matches with the consumer's feeling then the consequence will be positive. It is important that Earhart International Airlines marketing campaign must be attempt to be clear and sure about what they are and what they stand for and they convey in a simple language recognizing each and every individual to comprehend their message.

Earhart International Airlines need to promote its services to its clients and develop well positioned offerings for a manageable aggregation of target segments, which is an adequate marketing blend, offers a right service that takes care of the customers demand, that is of affordable cost to the customer and it viably conveys the quality and use of the service which might be bought with the most extreme convenience.

Task 2 (AC3.1,3.2,3.3,3.4,3.5,4.1,4.3)

Strategies for both domestic and international markets:

The following strategies need to be adopted by “Earhart International Airlines”.

  • Low cost, no frills air travel to European destinations.
  • There is no free food or drink onboard. Food and drink are income streams. You buy them onboard, or you don’t – take your own food and drink if you like.
  • There are other income streams – or ancillary revenue. The company needs to have deals with car rental companies, and a number of hotel businesses. So Earhart takes a commission on ‘up selling’ i.e. ancillary revenue. Other examples include phone cards and bus tickets. This keeps costs lower.

Marketing Mix

Low cost or no frills marketing strategies are of great interest to marketers since the marketing mix employed tends to run in opposition to what makes a great brand (Brassington and Pettitt, 2002)– and “Earhart International” could be a great brand. In a nutshell, “Earhart International Airlines” need to sell the cheapest tickets that you can buy (on most occasions).

Price

  • “Earhart International Airlines” needs to have low fares.
  • The company needs a combination of low and high fares such as 80% of the seats are lowest cost with remaining seats between medium and high range.
  • The company needs t have good relationship with bodies such as the Advertising Standards Authority (ASA) in the UK.

Place

  • “Earhart International Airlines” needs to use its own direct marketing techniques like Ryanair. Ryanair does not use travel agents so it does not pay agency commissions. This reduces costs.
  • The customers needs to book online. This saves them 15% on agency fees.
  • The organization can have destination airports that could be secondary. For instance if someone wants to travel to Copenhagen (Denmark), you land in Malmo (Sweden) – in spite of the fact that it is just a short coach trip over the outskirt. Secondary airports, which have a tendency to be littler local airports, rely on this single carrier – some (it is reputed) paying up to £100, 000 for every extra new route. Expenses are lower and aeroplane could be turned around speedier.

Promotion

  • “Earhart International Airlines” needs to spend as little as possible on advertising.
  • The company does not need to employ an advertising agency. Instead all of the advertising must be done in-house. The company needs to use simple adverts that tell passengers that “Earhart International Airlines” has low fares.

People

•for "Earhart International Airlines", pilots ought to be selected when they are young as pilot cadets. They buckle down and take early advancements and after that proceed onward following 10-years or thereabouts to further their careers.

•Cabin team pay for their uniform to be cleaned. They put resources into their training. They are fundamentally in charge of traveler security and in addition ancillary revenues onboard.

Physical Evidence

  • “Earhart International Airlines” needs to pay as little as possible for their aircraft. Planes are the most expensive asset that an airline can make. They get big discounts on aircraft because they buy them when other airlines don’t want them.

Process

  • “Earhart International Airlines” needs to have a no check in service. The customers just simply show their passports and supply the reference number.
  • Because of the low budget airline, its a first come first serve basis. You cannot select a preferred seat. This aids speed.
  • Baggage is deposited directly onto the terminal – it’s quick. However if your bag is broken don’t expect high levels of customer service.

A buyer market includes fast-moving consumer services, which requires a coordinated marketing mix to attain objectives (Chisnall and Peter, 1995). These could be classified into two segments:

Organisational markets: differences from consumer markets, adding value through service; industrial, non-profit making, government.

International markets: globalization, standardization versus adaptation, the EU, benefits and risks, market attractiveness, international marketing mix strategies.

4.3 International Marketing Strategy

Two features of worldwide marketing strategy standardization are processed and program standardization .A structure for figuring out marketing program standardization is presented. Variables influencing program standardization are inspected discriminatingly. In an endeavor to create a research program on the standardization issue, the creator develops research positions for every element.

Worldwide marketing is much on the minds of academicians and specialists today. It's been contended that the worldwide marketplace is coming to be homogenized to the point that multinational organizations can market standardized items and administrations everywhere throughout the planet, by recognizing systems, with resultant lower costs and higher margins. Interestingly, the standardization issue is not new. Whether to standardize or to customize has been a vexing address with which global advertisers have wrestled since the 1960s. The world went ahead without the issue being completely determined. The later resurgence of the incredible investment in the universal standardization issue is traced to such worldwide impacts as TV, movies, telecommunications, and likewise the computer.

In spite of the fact that much is asserted and composed recently on the globalization of businesses, we are nowhere close to any decisive hypothesis or practice. This circumstance is not amazing as observational studies in the zone of worldwide marketing are constrained. On the grounds that experimental recognition requires a hypothetical base. Hypotheses are displayed as recommendations.

The entire procedure of entering and afterward developing a worldwide business sector is a troublesome one, which numerous organizations still recognize as a conceivable Achilles' heel in their global proficiencies. Two parts of the ordinary methodology are especially striking. In the first place companies often pursue this new business opportunity with a focus on minimizing risk and investment the complete opposite of the approach usually advocated for genuine start-up situations. Second, from a marketing view, numerous organizations break the establishing rule of marketing that a firm might as well begin by breaking down the business, and afterward,settle on its offer in terms of items, administrations, and marketing projects. Indeed, it is much more normal to see universal markets as the possibility to expand sales of existing items along these lines to embrace a "sales push" instead of a business driven approach. Given this general approach, it's not shocking that performance is often disappointing.

Task 3

4.2 Marketing Products and Services for B2B Markets

Business to business (B2B) research is inevitably more complicated than consumer research (Johnson and Scholes, 2005):. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to discover the answers using only 1 method. Discovering the right respondents is essential in B2B research because they are often busy, and may even not need to participate. Encouraging them to “open up” is an additional skill required with the B2B researcher. Last, but not least, most business research results in strategic decisions which implies that the business researcher should have understanding developing strategies which may be strongly rooted throughout the research findings and acceptable towards the client.

Four key factors which make B2B market research special and other to consumer markets:

  • The selected unit is much more complex in B2B markets compared to consumer markets.
  • B2B products in addition to their applications tend to be more complex than consumer products.
  • B2B marketers address an incredibly few customers who’re very much larger in their utilization of products than may be the case in consumer markets.
  • Personal relationships are of critical importance in B2B markets.

References

Johnson G, Scholes K, Whittington R. (2005): The Environment: Exploring Corporate Strategy, Pearson Education

Chisnall and Peter (1995). Strategic Business Marketing.

Brassington F and Pettitt S (2002) — Principles of Marketing, Third Edition. FT Prentice Hall.

Christopher M, Payne A and Ballantyne D — Relationship Marketing: Creating Stakeholder Value (Butterworth-Heinemann, 2001)

Hatton A — The Definitive Marketing Plan (FT Prentice Hall, 2000)

Globalization (2013). Available: http://lexicon.ft.com/Term?term=globalisation.[Last accessed June 10, 2014]

Impact of globalization (2013). Available: http://toolkit.smallbiz.nsw.gov.au/part/21/105/485. [Last accessed June 10, 2014]

Marketing (2013). Available: http://www.marketingpundit.com/MktgLessons_files/Introduction_to_Marketing_Planning.pdf. [Last accessed June 11, 2014]

Marketing, definition (2013). Available: http://media3.bournemouth.ac.uk/marketing/02defining/02defining.html. [Last accessed June 12, 2014]

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