Internal, External Essay
| Identify the key actors and forces in the company’s marketing environment that affect its ability to serve its target customers effectively.The marketing environment can be defined as everything that surrounds an organization’s environment and can affect its operation.The business environment consists of the actors and forces that affect an organization’s ability to develop and maintain business with its targeted customers. These are the Micro Environment, the Macro environment and the internal environment.The micro-environment of an organization can best be understood as comprising all those other organizations and individuals who directly or indirectly affect the activities of the organization. The following key groups can be identified as: their suppliers, marketing intermediaries, customers, competitors and the public. * Neil Saab, PROCTER’s European head of laundry products development * Edward Arwell, PROCTER’s Chief Marketing Officer
* scientists and over 60,000 consumers * Dutch press * PR Firm hired by PROCTER * Europe targeting consumers’ associations, washing machine manufacturers, retailers * and anybody else who would listen * Dutch consumers’ union * Six test institutesThe Macro environment is the non specific aspect in the company’s surrounding that have the potential impact on the organizations strategies. This environment comprises general trends and forces which may not immediately affect the relationships that a company has with its customers, suppliers and intermediaries, but sooner or later, macro-environmental change will alter the nature of these relationships. These are demographic forces, economic factors, natural, technological, political and socio cultural factors. * For ULTRA WASH, they had claimed a technological lead based on their formula and this was keeping them ahead * Environmental campaigners in Sweden were keen on the effects of the product
* Freedom of speech allowed Procter to lobby openly against their competitorThe Internal Environment refers to those activities within the local influence which includes it marketing plans and strategies, how they are implemented and its research and development. Actors in the internal environment include: * David Fritz, ULTRA WASH’s global coordinator of detergent marketing * Top executives at ULTRA WASH Head Office in the UK * Other management and staff of ULTRA WASH Show how each of the actors/forces you have identified in question 1, directly (or indirectly) impacted on ULTRA WASH’s final
decision to revamp and relaunch the defective Eno/Ersil Power.For ULTRA WASH, the SWOT analysis summarizes the main environmental issues in the form of Strengths, Weaknesses, Opportunities and Threats.Strengths of ULTRA WASH: * Power branded in Netherlands, UK and France * Biggest advance fabric detergent over 20 years * They had the technological lead Weaknesses of ULTRA WASH: * Did not act on private warning from Procter before they went public * Did not effectively counter Procter’s negative campaign against their product
* Ultra Wash image damaged and undermined as they were slow to act Opportunities of ULTRA WASH: * To launch Power in 11 other countries Threats of ULTRA WASH: * Flaw discovered in technology by rival competitor * The need to withdraw their once successful product from the market * Leading supermarket emptying shelves of the product * Various tests confirmed damaging effects of their products With all the negative publicity that ULTRA WASH had received from Procter, various media agencies as well as tests that proved the product was in fact damaging, it was in ULTRA WASH’s best interest to revamp and re-launch their product.The Impact of the Actors in the Micro EnvironmentThe lobbying and negative campaigning done by Procter’s executives sensitized the public on the damaging effects of ULTRA WASH’s product therefore reducing the demand in the market.Various Scientists confirmed that the product was faulty also confirming to the public that this product was not ideal for their laundry.The Press and PR Firm hired by Proctor hammered bad publicity that contributed to the decline in sales of this product. As the Customers are the most important to consider, a re launch was necessary to correct the past manufacturing errors and reclaim their loyalty. It was also important to create a new image in the minds of the target market by changing their perception.
The Impact of the Actors in the Macro Environment * Legal: ULTRA WASH also had on going legal battle with PROCTOR, it was important to end that chapter and show some differentiation in their rebranded product. * Technological: Advances in Technology would create opportunity for ULTRA WASH to develop a new detergent with the correct product mix that would meet environmental specifications. * Social and Cultural: PROCTOR was able to freely express their opinions and change the perception of the general product thereby reducing the market share of ULTRA WASH. The Impact of the Actors in the Internal EnvironmentThe entire series of events proved that the Executives and marketing personnel at ULTRA WASH were not fully equipped to handle all the negative publicity and did not act expeditiously to recover from this problem.
Top Executives should have heeded the secret warnings of PROCTOR and test their product privately to prevent an international outburst. The strategies were not enough to protect their product. Internal branding was important as ULTRA WASH needed to re create a core product with distinctive values that distinguishes it from its competition. ULTRA WASH needed to highlight the true benefits to be from using their product. Brand strategies must be communicated to staff so that they understand the company character on which the company brand is built. Investment in staff training is required to achieve the service levels required for the brand strategy.In order to be successful and to reclaim their market share, ULTRA WASH would need to revisit their team strategies, review their research and development strategies and improve on their technological advances.|
A company’s marketing environment refers to factors outside of marketing, which has either a direct or indirect affect on the company’s ability to develop and maintain successful relationships with its target market. (Various Environmental factors Affecting Marketing Function, 2012) An understanding of a company’s marketing environment is instrumental in the development of its SWOT analysis as the marketing department would be able to identify the strengths, weakness, threats and opportunities. The marketing environment can be divided into three sub- categories which are internal environment, micro- environment and macro- environment. (Various Environmental factors Affecting Marketing Function, 2012) Ultra Wash Power detergent was affected by factors and actors from these three marketing environment which hindered the company from serving its target market. The internal marketing environment of a company refers to factors and actors that are part of the company, which the company has control over.
These factors have an influence on the operations of the organization and a high level of control is placed over this environment, as the organization can change it strategies to ensure that these factors support marketing. (The marketing environment, n.d.) (Various Environmental factors Affecting Marketing Function, 2012) Ultra Wash was affect by the following in its effort to serve its target market: – Research and Development: this is the creation of products, improvements to existing products or the production process through a combination of basic and applied research. The aim of research and development is to position the company as a market leader through competitive advantage. (Research and Development , n.d.) – Company’s Imagine- refers to what consumers think about your business when they hear the name of the product or business.
(Image , n.d.) – Top Management: this refers to marketing decisions taken by members of the Board of Directors, shareholders and executives. Micro- environment refers to factors and actors that are closely linked to the organization and their decisions and operations directly affect the company’s ability to serve its customers. (The marketing environment, n.d.) Ultra Wash was affected by the following three factors in this environment: – Consumer Behavior- this is how consumers select, purchase and use goods and services to satisfy their wants and needs. (Consumer Buying Behavior) – Market intermediaries: these are third party persons or organizations between the final customer and manufacturer and given the responsibility of promoting, selling and distributing of the goods and services. (Various Environmental factors Affecting Marketing Function, 2012) – Competitors: firms which sell same or similar goods and services in the same market.
(Various Environmental factors Affecting Marketing Function, 2012) Marco – Environment are factors which are uncontrollable external to the company. Although these factors directly influence the company marketing decisions, they do not directly affect the company’s ability to serve its customers. (The marketing environment,n.d.) This environment is analyzed through the STEEPLE analysis. The seven areas of focus in the STEEPLE analysis are political, economic, social, technological, environmental, legal and ethical. (Williams, 2013) Of which, technological, environmental, and ethical affected the ability for Ultra Wash to serve its target customers. (The marketing environment, n.d.) Question#2
– Research and development directly affected the ability of Ultra Wash to serve its target market as the company did not undertake sufficient research when developing the product. This was evident when they were faced with the facts about how the enzyme “dirt buster” affects clothing. Also they did not take heed to the warning made by PROCTER, had the company research the information made by their competitors it could have saved them thousands of dollars in damage control and advertising. – Company’s Imagine- With the information about the effects of their detergent being published in the media, the company’s image began to plummet in the eyes of consumers.
The company had to take steps to try to rebuild the company’s imagine by offering a new revamped detergent gave them a chance to do this. – Top Management- David Fritz the global coordinator of detergent marketing and the Ultra Wash executives decided to ignore the warnings about the product made by Edward Artwell with the belief that recalling the product would be costly and humiliating to the company and for David Fritz his career. Micro- Environment:
– Consumer Behavior- Ultra Wash revenues for the Power detergent was reducing radically due to the information on the detergent which PROCTER released and their campaign against detergent with “dirt buster”. In order for any company to be able to remain competitive they must be able to attain profits and with the constant decline in Ultra Wash revenues and profit, the company had to make changes to the product to realize an increase the sales and revenues when advertising and promotions did not work.
– Market intermediaries- Many supermarket chains considered removing the products from their shelves after being informed by PROCTER about the harmful effects of the Power detergent. In order to maintain relationships with these market intermediaries, who in turn wants to ensure that they are able to maintain good relationship with their customers, Ultra Wash needed to make sure that the standard of the product was improved. This would satisfy customer wants as well as allow Ultra Wash to maintain good relationships the market intermediaries.
– Competitors- The actions of the competitors PROCTOR played the biggest part of the decision to revamp and re-launch the defective Power detergent. PROCTOR tried to assist the Ultra Wash Company by providing them with research concerning the effects of “dirt buster”; however the company did not listen and proceeded to mass launch the product. As a result of the launch PROCTER released a statement providing the public with the effects of the detergent. Although Ultra Wash made their own releases refuting those claims, increasing advertisement and promotions they were not able to convince consumers otherwise and realized deduced sales. PROCTOR continued to provide the public, including consumers, retailers and consumers’ associations with information on this product until Ultra Wash finally decided to remove the product from all markets.
– Technological- Ultra Wash believe that this new technology would be able to provide them with competitive advantage of being more advanced that they rest of the market. However, in the hurry to become the market leader the technology was not properly research and developed causing the company to experience major losses. – Environmental- Many environmental lobbyist in European and Sweden released public statements about the effects the Power detergent and its affects on clothes.
These statements can persuade consumer behavior against a certain product as in this case. – Ethical- Consumer groups such as the Dutch consumer’s union confirmed the damaging effects of the upgraded Power detergent. Ultra Wash needed to ensure that the product standard are to the level the consumers expect as statement against a product will persuade the consumers decisions against the product. All these factors played a major part in the decision taken by Ultra Wash to revamp and re-launch the defective Power Detergent as Ersil tablets. These tablets were able to provide them with the competitive advantage as well as become the market leader for this product.
Various Environmental factors Affecting Marketing Function. (2012, July 19). Retrieved June 10, 2013, from ebstudies: http://ebstudies.wordpress.com/2012/07/19/various-environmental-factors-affecting-marketing-function/ Consumer Buying Behavior. (n.d.). Retrieved June 11, 2013, from BusinessDictionary.com: