Marketing Management: Brief edition 2.3. 4 the threat of substitutes Where there is product-for-product substitution e. g. email for fax where there is substitution of need e. g. better toothpaste reduces the need for dentist Where there is generic substitution(competing for the currency in your pocket) We could always do without e.g. cigarettes 2.3.5 competitive rivalry This is most likely to be high where entry is likely there is the threat of substitute products, and suppliers and buyers in the market attempt to control This is why it is always seen in the center of the diagram Exercise: The market for on-line education Place the following eight points onto the five forces model 1. Start up costs is very low 2. Students have access to books, videos, and paper-based distance learning packs 3. Companies, governments, and self-funding students invest huge amounts in their education 4. There are very few high quality web sites available 5. Traditional colleges and universities are adapting their products for on-line learning 6. Government legislation in the US and Europe encourages on-line learning 7. The more innovative learning sites give lesson for free just for the love of it 8. More people with access to the web every second 2. 4 PEST Analysis It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organizations marketing environment is made up from 1. The internal environment e.g. staff (or internal customers), office technologyMarketing Management: Brief edition 8 2.3.4 the threat of substitutes • Where there is product-for-product substitution e.g. email for fax where there is substitution of need e.g. better toothpaste reduces the need for dentists. • Where there is generic substitution (competing for the currency in your pocket) e.g. Video suppliers compete with travel companies. • We could always do without e.g. cigarettes. 2.3.5 competitive rivalry • This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers and buyers in the market attempt to control. This is why it is always seen in the center of the diagram. Exercise: 'The market for on-line education' Place the following eight points onto the five forces model 1. Start up costs is very low 2. Students have access to books, videos, and paper-based distance learning packs 3. Companies, governments, and self-funding students invest huge amounts in their education 4. There are very few high quality web sites available. 5. Traditional colleges and universities are adapting their products for on-line learning. 6. Government legislation in the US and Europe encourages on-line learning. 7. The more innovative learning sites give lesson for free just for the love of it. 8. More people with access to the web every second. 2.4 PEST Analysis It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up from: 1. The internal environment e.g. staff (or internal customers), office technology