Finance and Marketing
Masters
Engineering routes
Module Tutor: Vanessa Zheng
E-mail: [Link]@[Link]
Week 1
• Introduction of the module objectives
• Course format and delivery
• Assessment & key research data
• Marketing concept
• External marketing environment
• PESTEL analysis
Overall Module Objectives
• Introduce you to the
principles of marketing
• Help develop a commercial
outlook
• Understand relationship
between the marketing
discipline and financial
management
• This course is NOT designed to turn you into
‘marketers’ or ‘accountants’!
Course Format
1. Lecturesessions - 2 hours session
2. Seminar activities are given to self study time
- 1 hour (on BB site/MyHallam)
3. Assessment: Case Study (groups self selected – 6 members)
Marketing element (basics)
Market Audit (Macro, Micro, Internal)
Strategy options
Objectives
Segmentation
Target customer selection
Marketing mix for target segment
Group presentation – Wed 12th Dec 2018
Individual assignment – 18 January 2019
Principle Reference Sources
• Parker, J & Cropper, A (2008); Finance and Marketing; a core text. Cengage, drawn
from
– Blythe, J (2013); Principles & Practice of Marketing
– Egan, J (2015); Marketing Communications
• Britton, C & Worthington, 6th edition (2009), The Business Environment
• Dibb, S., Pride, W., Ferrell, O.C., Simkin, L., 7th edition (2016) Marketing: Concepts
and Strategies
Task 1 (Group Assignment)
50% of overall mark
Undertake a scanning exercise of the UK market for Ground Source
Heat Pumps. In particular, explore:
• The macro environmental factors
o to attempt to indicate how this sector might develop. (Both in the short and long term)
• The micro environment
o with a particular focus upon understanding the nature and basis of competition
within the market and in attempting to identify viable market segments.
o In constructing segments, consideration may be given to a mix of factors
including house type, ownership status, geographical location etc.
• Note: whilst you may draw upon worldwide insights for the macro analysis, the micro analysis needs to
concentrate upon the UK environment.
• Then, taking one of the segments identified, undertake a viability
analysis to gauge its future attractiveness/potential (or otherwise)
over the next 5 years.
• The key financial data needed to do calculations against is supplied above, but ensure that you use this in
line with the indicators gathered, e.g. market size, growth, etc, from the market data you gather.
Marketing Research & Analysis
• External Macro Environment Audit
o Market Size, Trends & Opportunities in the sector/industry
o PESTEL analysis
• The Micro Market Environment Audit
o Competitors
o Customers and their behaviour
o Suppliers
o Distributor
• The Internal Audit - the company
o Their strength & weakness
o Resources available
o Current strategy and Issues
Make recommendations on:
• Segmentation, targeting and positioning - Which segment?
• Proposed strategic options &
• Marketing objectives
• Proposed marketing mix (4Ps or 7Ps) on target segment
(based on the market research and financial data and projection)
You should conclude your work with a summary
Marketing Content
1. What is Marketing?
2. External Marketing Audit
3. Competitor Analysis & Consumer Behaviour
4. Internal Marketing Audit & SWOT Analysis
5. Segmentation, Targeting, Positioning
6. Marketing Research & Strategy Options
7. Marketing in Practice (Marketing Mix - 4Ps or
7Ps)
Key components of the Marketing Concept
Marketing Concept
Achievement of corporate goals
through meeting and exceeding
customer needs and expectations
better than competitors
Customer Orientation Integrated Effort Goal Achievement
Corporate activities focused All staff accept Belief that corporate
upon providing customer responsibility for goals can be achieved
satisfaction creating customer through customer
satisfaction satisfaction
Jobber: 2007
The Marketing Orientation
Selling & Profits through
Factory Products
Promoting sales volume
Selling Orientation
Customer Profits through
Coordinated
Market customer
needs Marketing
satisfaction
Marketing Orientation
3 Major Strategic Decisions in Marketing
What products/services
}
are we going to sell?
What solutions
are we going
to provide?
Into which markets?
What is the basis of our
competitive advantage?
The Framework for a Marketing Planning
External
Macro
External Objectives & Implementation
Marketing Mix & Control
Strategy
Micro
Internal
Assessing the Marketing Environment
• “Change is constant”
• Organisations must continually
adapt to maintain a good fit
between their capabilities and the
changing market environment
• Adapt or die
The Marketing Audit
Defines and describes the ‘Market’ and your
organisation's place in it
Build a Picture of
• External and internal environments
• Customers
• Competitors
• The market - Size, Structure, Trends, Potential, Challenges
• Strengths and Weaknesses of your organisation
The Marketing Audit
Macro-environment
Economic Political
Micro-environment
Suppliers Customers
COMPANY Legal
Distributors Competitors
Sociological Environmental
Technological
Adapted from Jobber
The Macro Environment
PESTEL Analysis
Market Size, Value & Trent
Outcome: Threat & Opportunities
Political / Legal Factor
The EU - Brexit
National Government
Local Government
Regulatory bodies
Trade associations
Government policy
Remember - these must be relevant to your company…
how will these inform your marketing plans?
Economical Factor
Market structure
Trading blocs
Taxation
Inflation
Unemployment
Trade cycles
Interest rates
Disposable income
Remember - these must be relevant to your company…
how will these inform your marketing plans?
Demographics Socio-cultural Factor
Culture
Attitudes
Social class
Religion
Ethics
Social Responsibility
Consumerism
Remember - these must be relevant to your company…
how will these inform your marketing plans?
Technological Factors
New products
Materials/components cost
Distribution channels
Marketing communications
channels
Social Media (marketing)
Word of mouth/online
recommendations
Remember - these must be relevant to your company…
how will these inform your marketing plans?
Environmental Factors
Recycling & Waste Management
Packaging
Sustainable/re-usable energy
Environmental friendly materials
Corporate Social Responsibility
Fairtrade
Environmental rules and regulations
Environmental disasters in agriculture/farming countries
Global warming
Analysis of markets - changes
Customers
Purchases
Technology
Market Trends
Try to look for future
forecasts too
Adapted from Wood – Marketing Planning – principles into practice 2004
The Marketing Environment
Previous environmental Current environmental dynamics
dynamics
Difficult Increasing no of
Industry structures were Simple competitors, increasing
easily defined customer choice
Time was available to Safe Dangerous Operating within a
develop a market global economy can
presence - build mean unseen
customer loyalty consequences
Slow rates of change in Static Dynamic Continual and rapid
what customers wanted change in numerous
& industry developments areas of business
Diverse Companies operating in
Company focus was on Single
more than one market
one or two industry
place
sectors
Social and Cultural changes
• Explosion of the worlds population
• Slowdown in birth rates
• Changes in family structure
• Higher levels of education
• A rapidly ageing population
• A growth in emigration
• The rise of the 99 lives phenomenon
• The collapse of the idea of a job for life
• Communications revolution
Looking to the future...
• Higher levels of competition - not direct competition
• Globalisation of markets
• Even higher expectations (product and service)
• Greater pace of technological change.
• The erosion of previously strong and dominant
brands
• Greater speed and obsolescence of brands and
unpredictable demand
Analysis of markets - Size, Share
How big is the market?
Who is in it?
Vital Sign
By product / market
Competitors
Wherever possible, look for VALUE & VOLUME data
Also remember to note the important difference between absolute
numbers and percentages
Adapted from Wood – Marketing Planning – principles into practice 2004
The Market Share Blinker
Defining markets too narrowly
restricts consideration of market
developments and true
competition
It is the ambition of an organisation, rather than its resources, that
dictates how well it operates
Hamel & Prahalad (1996)
Researching the Marketing Environment
Market trends
• Declined or growth?
Market size
• How big is the market?
Market value
• How much is the market worth? £££
Threats
• What are the barriers for success?
Opportunities
• Where are the gaps for new possibilities?
What Is Limiting The Company’s
‘Area Of Success’?
Customers
Acceptability in
meeting customers’
needs
Area of
Feasibility: Success
Suitability
when
possessing compared with
capability to competition
produce
Company Competitors
Capabilities
Adcock (2000)
So, What is a Market Opportunity?
"An area of buyer need and interest in
which there is a high probability that a
company can perform profitably by
satisfying that need." - Kotler
Sources of Market Opportunities
• Supply something in short supply
• Supply existing product or service in a new or
superior way
• Supply a new product or service
Adapted from Kotler on Marketing (1999)
First Approach: Observing Trends
• Observing Trends
– Trends create opportunities for entrepreneurs to pursue.
– Possible areas to explore:
• Political action and regulatory change
• Economic forces
• Social forces
• Technological advances
– It’s important to be aware of changes in these areas.
2-33
Environmental Trends Suggesting
Business or Product Opportunity Gaps
2-34
Trend 1: Political Action and Regulatory
Changes
Examples
Political action and Laws to protect the environment have
regulatory changes created opportunities for entrepreneurs
to start firms that help other firms
also provide the basis comply with environmental laws and
for opportunities. regulations.
What has happened in the
housing market?
.....Brexit.... • Government incentive for new
source of energy
• Planning rules (permitted
development)
• Licensing for HMOs
2-35
Trend 2: Economic Forces
Economic trends help
Example of Economic Trend
determine areas that are Creating a Favorable Opportunity
ripe for new startups and
areas that startups should • A weak economy favors startups
avoid. that help consumers save money.
• What has happened in the housing – Employment
market? – Disposable income
– Interest rate?
– Stamp Duty Tax?
– Exchange rate
– Clause 24/ Tax on B2L interest
– Recession
– Housing demand? – Cost of materials
– Government incentives/funding – Cost of installation
2-36
Trend 3: Social & Environmental
Forces
Social trends alter how people Examples of Social Trends
and businesses behave and
set their priorities. • Retirement of baby boomers
These trends provide opportunities for • The increasing diversity of
new businesses to accommodate the
changes. the workplace/work from home
• Increasing interest in health, fitness &
How these environmental factors
impact on the housing market? well-being
• CO2 emissions • New/alternative forms of energy
• Energy saving • Population increase/decrease?
• Carbon footprint • Communications via social media
• Re-usable energy
• Climate change
• Target customers/B2C or B2B?
2-37
Trend 4: Technological Advances
Examples of Entire
Advances in Industries that Have Been
technology frequently Created as the Results of
create business Technological Advances
opportunities.
• Computer industry
What has happened in the • Internet
Housing Market? • Biotechnology
• Digital photography
2-38
Task 1 (Group Assignment)
50% of overall mark
Undertake a scanning exercise of the UK market for Ground Source
Heat Pumps. In particular, explore:
• The macro environmental factors
o to attempt to indicate how this sector might develop. (Both in the short and long term)
• The micro environment
o with a particular focus upon understanding the nature and basis of competition
within the market and in attempting to identify viable market segments.
o In constructing segments, consideration may be given to a mix of factors
including house type, ownership status, geographical location etc.
• Note: whilst you may draw upon worldwide insights for the macro analysis, the micro analysis needs to
concentrate upon the UK environment.
• Then, taking one of the segments identified, undertake a viability
analysis to gauge its future attractiveness/potential (or otherwise)
over the next 5 years.
• The key financial data needed to do calculations against is supplied above, but ensure that you use this in
line with the indicators gathered, e.g. market size, growth, etc, from the market data you gather.
Ground Source Heat Pumps
Seminar activities:
• External market environment analysis
– Market size
– Market value
– Market Trends & Opportunities
– Market threats & challenges
PESTEL Analysis
seminar activity
PESTEL Implications Opportunity Level of Impact
How the factor might specifically impact on this Low/Medium/High
factors particular business or market
or
Threat?
Factors Influencing Market/Segment
Attractiveness
Size of
segment
Future Ability to
growth meet
potential needs
ATTRACTIVENESS
Required Strength of
investment competition
Profit
potential
Next week:
Micro environment
• What business are we in?
• Competition
• Customer
• Suppliers
• Distributors
Any Questions?
Vanessa Zheng
E-mail: [Link]@[Link]