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Title: THE INFLUENCES OF SUPPLIERS AND COMPETITORS ON THE MICRO MACRO ENVIRONMENT

Influence of suppliers on the marketing mix

Suppliers influence marketing mix of a business entity in very profound ways. Because of agility within various supply chains, all the affected businesses are compelled to compete in very volatile markets (Christopher, 2000). As the world of business becomes increasingly competitive, volatile and turbulent markets have started being transformed into a recurring phenomenon (Christopher, 2000). At the global level, numerous economic forces have emerged that compel suppliers to take actions that are not necessarily in the best interest of the affected businesses. In a world characterized by highly competitive forces, it becomes difficult for an environment of certainty to be created in the context of a marketing mix.

Although businesses are under growing pressure to enhance efficiency, the logistical channels through which many suppliers operate are not always sustainable. The processes through which products are transported to businesses tend to be too slow, leading to major inconveniences. This leads to a negative impact on marketing mix. To prevent damage to day-to-day operations, organizations are compelled to reassess their prevailing supply chains in terms of their structure and organization. According to (Christopher, 2000), companies that want to survive in today’s market conditions must create agile supply chains. This essentially means that agile suppliers can greatly contribute to the success of a company’s marketing mix.

However, in many cases, it becomes very difficult to make an appropriate choice of suppliers. For instance, a certain market may be dominated by suppliers who have developed a culture of inefficiency. Moreover, the networks through which suppliers interact with businesses may be poorly managed, leading to inefficiency on the part of even the most dedicated participants. The way in which such networks are structured and coordinated greatly influences their impact on marketing mix. Some suppliers may be willing to share advisory information as well as to nurture relationships and sponsor innovative initiatives. In contrast, other suppliers may harbor ill motives of using the information in their custody against businesses, thereby crippling their day-to-day operations. Such unacceptable practices also expose the affected businesses to higher business risk that comes with malfunctioning marketing mix.

Suppliers also affect the micro-macro environment by influencing the value-creation potential of an enterprise. In any marketing mix, the need for partnerships and networks involving suppliers is likely to emerge. Yet marketers cannot accurately predict how the partnering and networking experiences with different suppliers are going to turn out. In some cases, networks may fail to function in the right way because of failure by suppliers to fulfill their part of the bargain. More importantly, they may pursue goals that are not in the best interest of the company’s marketing strategy. These challenges create a scenario where it is virtually impossible for a business to determine the future value to be generated by marketing activities for the simple reason that it is very difficult for the actions of suppliers on the marketing mix to be accurately determined.

Influence of competitors on the marketing mix

Competitors greatly influence the marketing mix of any business enterprise. For instance, a business enterprise must put into consideration the advertising strategies of its competitors when making a decision on its own method of advertising. A company is not likely to use a method of advertising that has already been used by a rival company and has failed to deliver the desired results. Similarly, the tendency to replicate the advertising methods of competitors may reflect negatively on a company’s ability to establish a unique brand. Many marketing strategists would prefer to use advertising strategies that are as distinct as possible for purposes of differentiation.

Competitors also influence the micro-macro environment by determining the pricing policies that a specific company chooses. As major changes continue to unfold in promotion and advertising, companies are being compelled to introduce changes to their pricing strategies (Ailawadi, Lehmann & Neslin, 2001). Ultimately, this influences their overall marketing mix (Ailawadi, Lehmann & Neslin, 2001). Ailawadi, Lehmann & Neslin (2001) provide the example of Proctor & Gamble, a multinational company that chose to change its pricing strategy in response to the promotional activities of its competitors. The company’s marketing strategists realized that consumers were ready to respond favorably to the actions of competitors to reduce prices, thereby putting it at risk of a decrease in its market share.

Moreover, it is difficult for a company to predict how competitors are going to respond to its own pricing strategy. This creates an air of uncertainty and volatility in the micro-macro environment. It takes numerous efforts for a company to be prepared to withstand market dynamics. The marketing-mix strategy of any well-run company must be able to survive the numerous changes that come with frequent price adjustments and their impact on market share.

According to Ailawadi, Lehmann & Neslin (2001), the response of competitors depend on the extent to which the market share of the competitors is impacted upon by changes in the existing marketing mix. It may also be influenced by the ways in which the competitors themselves respond to aspects of multi-market contact and the current position in terms of market share (Ailawadi, Lehmann & Neslin, 2001).

Additionally, competitors also tend to have a far-reaching influence on where products are going to be sold within the market (O’Cass & Julian, 2003). In efforts to achieve the goal of differentiation, it only makes sense for a business enterprise to pursue the goal of expansion in those niche markets that have not been exploited by competitors. This is where the notions of innovation and creativity come in. Marketing strategists are in many instances influenced by the promotional and advertising activities of their main competitors to reorient their product offering and target market to maintain higher levels of success in terms of differentiation.

 

References

Ailawadi, K, Lehmann, D & Neslin, S (2001), ‘Market Response to a Major Policy Change in the Marketing Mix: Learning from Procter & Gamble’s Value Pricing Strategy’, Journal of Marketing, vol. 65, no. 1, pp. 44-61.

Christopher, M (2000), ‘The Agile Supply Chain: Competing in Volatile Markets’, Industrial Marketing Management, vol. 29, no. 1, pp. 37–44.

O’Cass, A & Julian, C (2003), ‘Examining firm and environmental influences on export marketing mix strategy and export performance of Australian exporters’, European Journal of Marketing, vol. 37, no. 3, pp. 366 – 384.

 

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