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All organisations are affected by factors which may be outside of its control. A company’s Micro environment consists of things which can affect it regularly and will occur every day. Examples of elements of the micro environment which do this are the media, competitors and Trade unions. Micro factors can be managed more easily by businesses as they are closer to home and can sometimes be internal. A companies Macro environment consists of things which will affect the company on a long term basis.
Political Barriers in place restricting trade from the Rolex headquarters in Switzerland Economical The state of the economy will have a bearing on Rolex. The recession shook any businesses although did not have a negative impact on Rolex as people with the financial capability still sought after having the status symbol of wearing a Rolex watch. Social A person does not buy a Rolex watch because it is the latest trend. Rolex is a very iconic and self sustainable business that trends in the market do not affect them as much as its competitors.
Technological The internet has made it easier for people to buy fake Rolex watches as well as competitors making their watches better known. Competition. Sales of fake replica Rolex watches and new smart-watches being released re all factors Rolex has had to overcome. The reliable iconic timepiece is still ahead when it comes to choosing a luxury watch. Market research is when a company gathers information on its potential customer’s preferences/needs of a product or service. Market research is very important to businesses as it will enable them to understand how to best market their product or service. arket research allows for the business to understand how to be unique in the market to try and attract customers to shop with them, this is called product differentiation. An organization can use different information types when assessing their esearch the two types of information types are quantitative and qualitative. Quantitative. Quantitative data is purely numerical and can be directly compared to other responses. Quantitative data is useful to Rolex as it will give them a more reliable response from a bigger net. Qualitative Qualitative data is non-numerical data.
It can be gathered through use of surveys or questionnaires. Qualitative data generally takes more time to gather and is sometimes not as reliable, it is however a very valuable way of getting information and can give more in depth answers than you would receive using quantitative data. Rolex collects market research th rough the use of primary and secondary information. Primary information is something which you have went through the trouble of finding out yourself; this could be through mass questionnaires sent out through email to get a general response.
However this method can also be flawed as because that it is often done anonymously people may not answer honestly or could put no real time into selecting their answers. Another example of how to gather primary research is through setting up meetings with people in person. This method does often get better and more onest responses out of people however it can be very time consuming and you may not get as broad a response using this method rather than a mass questionnaire. Secondary research is when work that someone else has done is used for your own benefit.
Examples of secondary research include government reports or interviews with high ranking or dangerous. Market segmentation is when an organization splits its target market up into smaller more focused groups. The organization is able to do this through its use of market research. A company aims to segment the market in order to oost the effectiveness of the compa nys marketing strategy by breaking down large market areas into smaller groups in order to satisfy more customer’s needs. Companies can segment a market in many different ways.
Rolex does this in order to gain as many customers as possible. Segmenting a market geographically could help a business connect with a more secluded group of people through the use of local media channels. This will benefit the business as it will help attract customers from areas it may not have reached before. Another way segmentation will help the marketing of a business is through Industry. This method helps businesses sell its product on a larger scale. Rolex has done this by targeting jewellers and high end watch shops to sell to.
By selecting the right ones Rolex will be able to reach potential customers they may have not been able to in the past. The marketing mix consists ofthe “4p’s”; Product, Place, Price and promotion. This is in short how a company identifies how to sell a product. Marketers are able to sell their companies product by deciding to sell the product in a location the target market visits regularly (place), at a cost they think is acceptable (price). Product A companies ‘product is a good or service which could be offered to the market in order to satisfy its needs or wants.
Classification of a product is when products or services get broken down into categories which will help marketers decide how to effectively market it. A Rolex is a specialty product when product classification is thought of and it cannot be found in any normal watch shop. A products branding is also very important as it will allow more distinguished brands to use more subtle marketing. Rolex does this very well as they are such a well established and recognisable brand they no longer need to dvertise through complex TV or radio ads anymore.
Instead Rolex just has the brand image (a crown) at sporting events such as Wimbledon or Formula 1 races. This diagram describes the stages of a products life cycle. It simply but effectively shows how, as a business grows their sales get affected. Like any new business Rolex’ first goal was survival which they did with ease. During the growth stage sales increased, the company grew and with that the branding got more recognisable. Rolex easily matured and quickly became a household name for luxury wristwatches. However when the recession hit ome Rolex did start to decline as sales fell.
Jewellers such as Signet decided to no longer stock Rolex watches as there were not enough sales place Distribution in marketing is simply making the product available at the right place for the target market. Distribution channels are lone sellers also called intermediaries. Intermediaries can be split into two categories, merchants and agents. A merchant is someone who buys and resells the product such as a jewellers and a merchant is a 3rd party seller who does not own the product such as the online watchshop. Price The term price in marketing can be defined as the price in which a good can be bought or sold.
Setting the right price is important for a company as if they get it wrong the customer will not buy the product. Companies can carry out pricing strategies to ensure they don’t get this wrong, examples of pricing strategies are market skimming and neutral pricing. Market skimming consists of putting the product on the market at a considerably high price then dropping the price of the item over a period of time. After the first interested customers are happy with the purchase and interest dwindles, the ompany would proceed to lower the price to interest new customers.
One negative of price skimming is that it encourages competitors to come in with a lower, more affordable price sooner than expected which could ender this strategy ineffective. Neutral pricing is a very basic and safe strategy in which a company enters a market and sets its prices to match its competitors. This strategy will work throughout the products life cycle but can mean that profit is not fully utilised. Rolex has a very unique pricing strategy in that it sets its prices as the ompany sees fit and does not alter them to rival that of their competitors.