lecture 6 - macro environmental factors affecting crm

1、Commercial RelationshipsPS4S39,Lecture 6 The Macro Environmental factors affecting CRM,PESTEL Factors,Political / Legal Factors - examplesGovernment PoliciesMonopolies legislationEnvironmental protection lawsTaxat

2、ion policyForeign trade regulationsEmployment lawGovernment stability,PESTEL Factors,Economic factors - examplesBusiness cyclesGNP trendsInterest ratesMoney supplyInflationUnemploymentDisposable incomeEnergy a

3、vailability and cost,PESTEL Factors,Socio-cultural factors - examplesPopulation demographicsIncome distributionSocial mobilityLifestyle changesAttitudes to work and leisureConsumerismLevels of education,PESTEL Fac

4、tors,Technological factors - examplesGovernment spending on researchGovernment and industry focus on technological effortNew discoveries / developmentSpeed of technologyRates of obsolescence,The Economic Environment

5、,The macro-economic environment embraces the general level of activity & growth in the economic system & the effects of ‘boom’ & ‘bust’ cycles. This relates to factors such as: -Government fiscal (tax) &

6、 monetary (money supply) policyInterest & foreign exchange ratesInflation ;Consumer spendingLabour costsUnemployment levelsInternational tradeEtc.,The Economic Environment,Sources of information on macro-econo

7、mic factorsSome sources include data published by: -Economic & labour review - (monthly)British Business - (published weekly) – providing industrial & commerce rends, domestically & overseasBusiness Mon

8、itor – published by the Office of National Statistics, giving detailed information about various industry sectorsMainstream media – Financial times or Financial Review, The Economist, etcFinancial institutions – Banks

9、& currency exchange bureaux, the Inland Revenue (exchange rates & interest rates)Financial markets – e.g. The London Stock Exchange & others Published economic indices – e.g. the retail price index (RPI),

10、labour markets & commodity prices Chambers of Commerce & the International Chamber of CommercePublished on-line macro-economic analysis – e.g. Gallup, MORI, Euromonitor, Mintel,Macro-economics,Organisations op

11、erate within a more immediate economic environment of a particular business sector, industry & market (P.E.S.T.E.L factors = Opportunities & Threats)A ‘market’ - is a place where buyers & sellers of a produ

12、ct are brought together to trade.‘Product markets’ – are markets in which a firm sells its products & services to consumers‘Supply or factor markets’ – are the markets in which firms purchase the resources it needs

13、 for production (e.g. materials & labour) The purchasing function therefore deals primarily in various supply marketsThere are TWO key macro-economic concepts that help us understand the market environment – ‘the m

14、arket mechanism’ & ‘the market structure’,Forecasts, reports and statistical surveys published by the government and government agencies Analysis published in the mainstream and financial mediaData published by fin

15、ancial institutions and analystsData published by the financial marketsPublished economic indicesThe websites and information services of organisations promoting trade and exportsPublished and online macro-economic a

16、nalysis,Sources of information on macro-economic factors,Demand analysisDemand forecasting for high value / high usage / high risk materialsVendor analysisEvaluating the performance of current suppliers; identifying

17、& pre-qualifying potential new suppliers.Supply market analysisAppraising general conditions in the market – availability / risk / shortages / disruptions / market prices / price fluctuations & trends/ supply v

18、s demand,Some examples of macro-environmental research for CRM,2. The market mechanism,Demand,The price of substitute goodsThe price of complementary goodsDisposable incomeConsumer preferences,Supply,Production costs

19、TechnologyThe number of suppliersExpectations,Equilibrium price,,Elasticity of demand,Changes in price affect demand, but this change can vary based upon product & market conditionsThe term ‘price elasticity of de

20、mand’ is used to describe the sensitivity of demand to changes in priceThe more elastic demand is, the more demand will increase if you lower the price & the more demand will decrease if you raise the priceElastici

21、ty is measured as: - Percentage change in the quantity demanded Percentage change in price,Elasticity of demand,When elasticity is greater than 1 (elastic) – a change of

22、price will lead to significant changes in the sellers total revenue. If price lowers, total sales revenue would rise (sell more). If prices rise, total sales revenue would fall (sell less)When elasticity is less

23、 than 1 (inelastic) – changes in price will have much less of an effect on demand, causing different effects on sales revenues. If price is lowered, total sales revenue would fall, because the sales volume would be too s

24、mall to compensate for the price reduction. However, if the price is raised, total sales revenue would go up in spite of a small drop in sales volume,3. Market structures,The term ‘market structures’ refers to the differ

25、ent forms of competition that might be found in a market.‘Consumer spending power’ (in product markets) & resources or ‘factors of production’ (in supply markets) are inevitably limited.If there is more than one pl

26、ayer in a market, they will have to compete for a share of that market.The nature or intensity of that competition will influence the behaviour & performance of the other players in the market &their pricing str

27、ategies – ref. Porter’s 5-Forces model See handout of market structures from the Tutor,The competitive spectrum,Perfect competitionImperfect CompetitionMonopolistic competitionOligopolyDuopolyMonopoly,Many produ

28、cers with no market powerMany producers with little market powerA few producers with high market powerA market which consists of two firms and is a special case of oligopoly. Action and re-action situation.Only on

29、e producer with absolute market power,The competitive spectrum,,4. Competition,One of the major factors in bargaining or negotiating power of buyers & suppliers is the extent in which the market is ‘competitive’.The

30、 concept of ‘market structure’ goes a long way to explaining to why some market types are far more competitive than others and what form that competition takes (e.g. price or non-price competition) There is another key

31、macro-economic model which addresses the competitive forces in industry & markets, including the balance of supplier & buyer power. This model (Michael Porter’s 5-Forces model) forms an important of the structu

32、ral context within which a particular buyer & supplier negotiate.,Porter’s five forces model,,5. Macro-economic factors,Economic activityBusiness cyclesEmployment and unemployment levelsRates of inflationTaxation