Marketing Environment

Management Controllables versus Uncontrollables

All reasons for success or failure are found in the

controllables.
 Suppliers
Uncontrollables

Controllables Firm competitors

Goals-Resources

Marketing Functions
sociocultural -Determine needs economic
-Design marketing strategy (mix)
-Complete exchange

Intermediaries technological
government
Customers
 Marketing Environment

Socio-cultural system

Demographics

Geography

Economic system

Technology

Government
 Societal Marketing

Consumer Protection versus Consumer Education

Government Intervention for social good

Free market exchanges

…………………Which is more efficient?

 Rule of Three

“In competitive, mature markets, there is room for only three

major players along with several…niche players.”
• Top three are volume driven generalists.
• Smaller companies are margin driven specialists

Too many “majors” leads to rivalry, overcapacity, low profits.

With three “majors,” competition is strong but not excessive.
• Good balance between efficiency and competitive rivalry
• Excess capacity gets rationalized
 Rule of Three

Critical mass market share is 10%

• If you cannot get 10%, you are not a major player
• At less than 5%, financial performance and market share
are inversely correlated
– The smaller the market share the higher the return on assets.
– In between is doomed.