Question

The impact of COVID-19 individuals, communities, and organizations is rapidly evolving from a mild and temporary hit to the worst-case scenario, a global financial crisis. While other industries such as the Travel, Transportation, Hospitality, Insurance, Retail, and Telco are severely impacted, it is the resiliency and continuity of the financial services markets that will support Governments and businesses during and post crisis; ensuring liquidity is available. All eyes will be turned to the financial services industry to see if they can respond in a manner that reduces the global economic impact of COVID-19. The COVID-19 pandemic could be the most serious challenge to financial institutions in nearly a century. As the economic fallout spreads, retail banks find themselves juggling some big priorities that require concrete steps to reposition now while also recalibrating for the future. They are working to keep their distribution channels open, despite social distancing advice and supervisory and compliance functions that were never designed for remote work. They’re trying to manage revenue and customer expectations, despite near-zero interest rates and growing pressure on consumers. And, they need to keep an eye on strategy and brand issues that will define their future, as market forces and customer behaviors potentially change coming out of this crisis. COVID-19 and the Marketing Environment While definitions differ, there is consensus that the Marketing Environment is the combination of external and internal factors and forces which affect the company’s ability to establish a relationship and serve its customers. The Marketing Environment includes factors that surround the business and influence its marketing operations. Kotler (2019) posits that these forces remain outside the control of the firm and can upset marketing management ability to build and maintain successful relationships with target customers. Some of these factors are controllable while some are uncontrollable and require business operations to change accordingly. Firms must be well aware of the marketing environment in which they are 3 operating to overcome the negative impacts the environmental factors are imposing on their marketing activities. Against this background, PwC (2020) conjectures that the COVID-19 pandemic could be the most serious challenge to financial institutions in nearly a century. As the economic fallout spreads, retail banks find themselves juggling some big priorities that require concrete steps to reposition now while also recalibrating for the future. It implies that agile banks will survive by taking concrete steps right now; to support the communities and customers they serve while balancing medium to long term positioning; those that do not adjust may risk not surviving at all. Ghanaian financial institutions are not insulated from this reality. REQUIRED Drawing on this background and your knowledge of Marketing of Financial Services:

A. Provide a critical analysis of FIVE (5) Macro Marketing Environmental forces affecting the financial service sector today. The macro-environment refers to all forces that are part of the larger society and affect the micro-environment. They include the demographic environment, political environment, cultural environment, natural environment, technological environment and the economic environment. The purpose of analyzing the macro marketing environment is to understand the environment better and to adapt to the social environment and change through the marketing effort of the financial institutions to achieve the goal of the financial institutions marketing

B. With a critical analysis of the micro environmental forces which are forces close to the company that affects its ability to serve its customers; all those factors that are closely associated with the operations of the business and influences its functioning including suppliers, customers, marketing intermediaries, competitors and publics; discuss the effects of COVID-19 on Five (5) micro environmental forces within the financial service sector in Ghana today.

Answer 1

A)..

the micro-environment
The micro-environment is basically the environment that has a direct impact on your business. It is related to the particular area where your company operates and can directly affect all of your business processes. In other words, it consists of all the factors that affect particularly your business. They have the ability to influence your daily proceedings and general performance of the company. Still, the effect that they have is not a long-lasting one.

The micro-environment includes customers, suppliers, resellers, competitors, and the general public.

the macro-environment

The macro-environment is more general - it is the environment in the economy itself. It has an effect on how all business groups operate, perform, make decisions, and form strategies simultaneously. It is quite dynamic, which means that a business has to constantly track its changes. It consists of external factors that the company itself doesn’t control but is certainly affected by.

The factors that make up the macro-environment are economic factors, demographic forces, technological factors, natural and physical forces, political and legal forces, and social and cultural forces.

Micro-environment factors:

Customers

The kind of customer base that your company attracts, as well as the reasoning behind purchasing your product, are going to highly affect the way you create marketing campaigns. Your customers can be B2C, B2B, international, local, and so on.

Important factors related to customers are:

• Stability of demand
• Prospects of sale growth
• Relative profitability
• Intensity of competition

Suppliers

If a supplier of a particular product is the largest, or even the only one, they are certainly going to have a big influence on how successful your business is.

The suppliers are extremely important factors as:

• Key link in the value delivery process
• Insurance that your business has the necessary resources
• Essential determinants in terms of price increase or decrease

Resellers

If you decide to sell your product via a third party reseller, or middlemen such as wholesalers and retailers, then the success of your marketing is going to be highly dependent on them. If let’s say, a certain retail seller has a strong reputation, it will pass on to your product.

As a link between you and the customer, they are important in terms of these factors:

• Promotion
• Sale
• Distribution
• Marketing
• Financial mediation

Competitors

Logically, every business that sells the same or a similar kind of product as you do is your competition on the market. So, their sale and marketing tactics matter to you a lot. You need to answer various questions, such as how their product and its price affects yours and how you can make use of that in order to gain an edge over them.

The three factors that matter in this case are:

• Desire competition
• Product form competition
• Brand competition

The general public

Of course, every business organization has in its best interest to appease to the general public. Every step that you take needs to be viewed from their perspective as well. It is extremely important how your actions affect others because their opinion can be the one thing that either pushes you towards success or pulls you down from the pedestal.

So, the general public is very important in terms of:

• Public opinion
• Media
• Environmental pollution

Macro-environment factors

Economic factors

Basically, the very environment of the economy can have an effect on two essential aspects – your company’s levels of production and the decision-making process of your customers.

Some examples of economic factors affecting business:

• Interest rates
• Exchange rates
• Recession
• Inflation
• Taxes
• Demand / Supply

Demographic forces

Each and every chunk of the market is affected by universal demographic forces. These are age, education level, cultural characteristics, country and region, lifestyle, and so on.

The crucial variables include:

• How income variables influence business
• Age variables that affect business
• Geographic Region Variables
• Education Level as a Variable

Technological factors

These factors are related to skills and ability that are implemented into production, as well as all the materials and technology that a particular product requires to be made. They are essential and can have a big impact on how well your business is running. It boils down to even the most basic factors, such as what kind of maintenance trolleys you use in order to preserve your tools and equipment for as long as you possibly can.

Some of the most common technological factors are:

• Automation
• Internet connectivity
• 3D technology
• Speed/power of computer calculation
• Engine performance and efficiency
• Security in terms of cryptography
• Wireless charging

Natural and physical forces

Every business must also take into account the very planet and its resources. There are those that can be renewed, such as forests and agricultural products, and those that cannot, such as coal, minerals, oil, and the like. Both are strongly related to production. So, natural and physical forces can be:

• Climate change
• Pollution
• Weather
• Availability of both non-renewable and renewable resources
• Laws that regulate the environment
• Survival of particular biological species

Political and legal forces

The market develops according to the political and legal environment in various areas. This means that every business needs to be up to date with such forces worldwide in order to be able to make the right decisions.

This generally includes legal factors such as:

• Copyright law
• Employment law
• Fraud law
• Discrimination law
• Health and Safety law
• Import/Export law

B)...

Micro-environment

The company’s microenvironment consists of actors close to the company that combine to form its value delivery network. It includes the company’s internal environment, which influences the marketing decision.

• The Company: All departments in the company share the responsibility of understanding the needs of the customer and creating value for them
• Suppliers: Supplies form an important link in the overall customers’ values creation cycle. Supply shortage, labor strike, increased cost of supplier goods and other factors can impact sales in sort run and influence customer satisfaction in the long run
• Marketing intermediaries: They help the company promote, sell and distribute goods to the end consumers. Partnering with the right intermediary and supporting them in making sale is critical for success of the business
• Competitors: to be successful, your product should provide greater satisfaction to the consumer than your competitors’
• Publics: A group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. These can be classified as financial, government, media, citizen-action, local, general and internal. Marketing plans can be designed focusing on these major publics and its customer markets.
• Customers: Customers are the most important actors in the marketing environment. The customer market could be any/all of the following - consumer, business, reseller, government or international. Each market type has a specific use case which the seller must research well

Macro-environment

The macro-environment consists of larger societal forces that affect the entire microenvironment. The PESTLE analysis in a framework used to scan the organization’s external business environment.

• Political: They refer to the political environment and its stability. It accounts for various government policies and its involvement in the trading agreement.
• Economic: The economic environment like the growth rate, employment rations, inflation, exchange rate, cost of living etc. can impact the organization and its consumers
• Socio-cultural: The impact your product has on the market needs to be understood. Anything harmful to the society must be eliminated to show that your company is socially responsible.
• Technological: With the changes in information and mobile technology the organization should adapt and welcome the new inventions.
• Legal: Legal factors such as national employment laws, international trade regulations and restrictions, monopolies and mergers’ rules, and consumer protection need to be followed while marketing.
• Environmental: These factors include limited natural resources, waste disposal, adverse impact of production on environment etc.