Marketing environment free essay sample

Analyze the marketing environment and the forces shaping eBay’s business over the years. What conclusions can you draw? The market eBay takes place in is primarily the Internet market. Around 1995 the Internet market was just beginning. â€Å"there will be more than 500 million users by 2003 and a rapid increase in e- commerce turnover, rising from US$500 billion worldwide in 2001 to more than US$3 trillion in 2004† (Fichter, 2003) EBay was a pioneer in Internet market until competitors such as Amazon and Wal-Mart began to sell products online as well. â€Å"Online marketing is now the fastest-growing form of marketing† (Armstrong, 2013). The difference between eBay and its competitors was that eBay allowed consumers to bid on items while the competitors allowed for consumers to buy products at barging prices and no shipping fee. The buying trend of the consumers was leaving the bidding arena and entering the traditional buy now at a bargain price type of consumerism. We will write a custom essay sample on Marketing environment or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This is when eBay decided a change is necessary to continue to strive but they did not just want to strive they wanted to soar so they began to innovate and jump into the creation of mobile apps for their company. EBay did what was necessary to be a â€Å"big dog† competitor in their marketing niche, if they continue to be innovative and continue to succeed in being one step ahead of competitors, I have no doubt they will accomplish being the number one ecommerce company. 2. How was the change in the nature of eBay sellers affected the creation of value for buyers? EBay began its business as an auction company. Therefore they grew selling peoples possessions at low moderation volume. But as time pass and consume behavior changed and new competitors entered the market eBay noticed that their competitors were receiving their goods from whole sellers in bulk. â€Å"E-commerce causes structural change of the economy and affects lifestyles and consumption patterns† (Fichter, 2003) and they were also receiving what the consumer was buying. Therefore eBay starts to get sellers that also sell in bulk instead of at low volume. This created an environment where consumers were receiving what they desired and also at higher volume creating profits. â€Å" Donahoe- â€Å"We have to create a marketplace where we’re helping our sellers give our buyers what they want†Ã¢â‚¬  (Armstrong, 2013). Giving the customers what they desire created profit and growth for eBay. 3. Do you agree or disagree with CEO Donahoe that eBay’s turnaround strategy is the best way to go? Yes I agree with Donahoe’s decision on his turnaround strategy. Change can be difficult but adapting and innovation is the key to success. â€Å" The â€Å"power of mass procurement† can be utilized to ensure that only those systems that meet the defined criteria for sustainability are considered for purchase† (Fichter, 2003). Change is something all companies have to go through and the ones that make the transitions the most smooth are the ones that excel. † Given that expert projections suggest that mobile commerce will top $119 billion by 2015, being on top of this trend s a great place to be† (Armstrong, 2013). This is exactly what eBay did, they found a new leader and he lead them through new changes and it is paying off. Yes at first there was â€Å"growing pains† but their profits are increasing in areas do to their innovation and changes they had to make. † We have gone from turnaround to offensive† (Armstrong, 2013) 4. Based on eBay’s current developments with PayPal and mobile apps, what do you predict the outcome for the company will be in five years? PayPal and mobile apps are both booming now and are only going to get bigger. PayPal creates a secure network for wireless transactions between bank accounts and with ecommerce on a rise with no sign of decline, PayPal is a â€Å"Star† â€Å"Stars are high–growth, high-share businesses or products. Mobile apps in general are definitely sky rocketing as well, depending on the individual apps convenience and attributes determines if the actual app will be a hit or miss. â€Å"the number of users worldwide with mobile Internet access is projected to rise from 16 million in 2001 to almost 500 million in 2005† (Fichter, 2003). Based on how this case explained eBay’s new app it sounds like it will be a hit for those who shop online, due to its convenience and suave. With these two things helping push eBay upward I can only predict in five years positive things for eBay to come.  But the way business goes its always a gamble, there may be a product, company, or app more desirable than the one eBay produces and this is just the way business occurs. Marketing Environment free essay sample Before we start with marketing environment it is important to know what a market is and how can marketing be defined as. A market is any structure that allows buyers and sellers to exchange any type of goods, services and information. †¢The market facilitates trade and enables the distribution and allocation of resources in a society. †¢Markets allow any tradable item to be evaluated and priced. A market emerges more or less spontaneously or is constructed deliberately by human interaction in order. †¢Marketing can basically be looked upon as the interaction between marketing mix variables and environmental variables. †¢It is only with the help of marketing variables, that the market managers tackle the environmental variables. †¢Marketing is an ongoing process of planning and executing the marketing mix for products, services or ideas to create exchange between individuals and organizations. According to Kotler â€Å"Marketing is a social and managerial process by which individuals and groups obtains what they need and want through creating, offering and exchanging products of value with others†. We will write a custom essay sample on Marketing Environment or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The American Marketing Association defines marketing as:- â€Å"The performance of business activities that direct the flow of goods and services from producers to consumers or users†. †¢Marketing tends to be seen as a creative industry, which includes advertising, distribution and selling. †¢ It is also concerned with anticipating the customers future needs and wants, which are often discovered through market research. †¢Essentially, marketing is the process of creating or directing an organization to be successful in selling a product or service that people not only desire, but are willing to buy. In the words of Stanton â€Å" Marketing is a total system of interacting business activities designed to plan ,price, promote and distribute want satisfying products and services to present and potential customers†. Therefore good marketing must be able to create a proposition or set of benefits for the end customer that delivers value through products or services. Government agencies, political parties, pressure groups and laws create tremendous pressure and constraints for marketing management. †¢Laws affect product design, pricing and promotion. Irrespective of the political ideologies, intervention in the marketing process has become common in every nation. †¢The legal environment is also referred to as public policy environment. The vast government network of laws and regulation, policy decisions, government bureaucracy and the legislative processes have varied impact on marketing strategies. †¢Multinationals like Coca Cola and IBM had to flee India during 1977 due to a hostile political environment. The positive political situation has permitted these corporations to again operate in the country. The impact of political and legal forces may be summarized as under: ? Substantial amount of legislation regulating business exists to protect consumers from unfair business practices, to avoid unfair competition, to safeguard small firms and to conserve foreign exchange. ?Marketing managers are required to get full knowledge and understanding of political and legal forces for achieving their goals. Political factors include government regulations and legal issues and define both the formal and informal rules under which the firm must operate. For example †¢Tax policy †¢Employment laws †¢Environmental regulations †¢Trade restrictions and tariffs †¢Political stability †¢Study and knowledge of economic forces is essential to preparing effective marketing plans. †¢Anticipation of future economic conditions will enable the firm to devise appropriate marketing strategies. Under economic environment, a marketing manager generally studies the following factors and trends: †¢Trends in cross national product and real income growth †¢Pattern of income distribution †¢Variations in geographical income distribution and trends †¢Expenditure patterns and trends Trends of consumer savings and how consumers like to hold their savings †¢Borrowing pattern, trends and governmental and legal restrictions †¢Major economic variables Economic factors affect the purchasing power of potential customers and the firms cost of capital. For example †¢Economic growth †¢Interest r ate †¢Exchange rates †¢Inflation rates †¢Economic conditions affect marketing directly because such organizations are themselves a part of the market place. For instance, the costs of all inputs positively respond to upward swing of economic condition. †¢This will affect the output price and consequentially affect the sales. Marketing Environment free essay sample The Marketing Environment Learning Objectives 1. Describe the environmental forces that affect the company’s ability to serve its customers. 2. Explain how changes in the demographic and economic environments affect marketing decisions. 3. Identify the major trends in the firm’s natural and technological environments. 4. Explain the key changes in the political and cultural environments. 5. Discuss how companies can react to the marketing environment. Chapter Overview In order to correctly identify opportunities and monitor threats, the company must begin with a thorough understanding of the marketing environment in which the firm operates. The marketing environment consists of all the factors and forces outside marketing that affect the marketing management’s ability to develop and maintain successful relation ¬ships with its target customers. Though these factors and forces may vary depending on the specific company and industrial group, they can generally be divided into broad microenvironmental and macroenvironmental components. For most companies, the microenvironmental components are: the company, suppliers, marketing channel firms (intermediaries), customer markets, competitors, and publics. We will write a custom essay sample on Marketing Environment or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The macroenvironmental components are thought to be: demographic, economic, natural, technological, political, and cultural forces. The wise marketing manager knows that he or she cannot always affect environmental forces. Smart managers can take a proactive, rather than reactive, approach to the marketing environment. As a company’s marketing management collects and processes data on these environ-ments, it must be ever vigilant in its efforts to apply what it learns to developing opportunities and dealing with threats. Studies have shown that excellent companies not only have a keen sense of customer but an appreciation of the environmental forces swirling around them. By constantly looking at the dynamic changes that are occurring in the aforementioned environments, companies are better prepared to adapt to change, prepare long-range strategy, meet the needs of today’s and tomorrow’s customers, and compete with the intense competition present in the global marketplace. Chapter Outline 1. The Company’s Microenvironment The Company a. In designing marketing plans, marketing management takes other company groups into account. These interrelated groups form the internal environment. b. Marketing managers must work closely with other company departments. Suppliers c. Suppliers form an important link in the company’s overall customer value delivery system. d. Marketing managers must watch supply availability. They also monitor the price trends of their key inputs. e. Most marketers today treat their suppliers as partners in creating and delivering customer value. Marketing Intermediaries f. Marketing intermediaries help the company to promote, sell, and distribute its goods to final buyers. i. Resellers are distribution channel firms that help the company find customers or make sales to them. ii.