MARKETING
ENVIRONMENT
ENVIRONMENT
• Actors & forces outside marketing that affects
marketing management’s ability to build and
maintain successful relationship with target
customer
• Marketing research & marketing intelligence
• Microenvironment
• Macroenvironment
MICROENVIRONMENT
• Actors close to the company that affects its
ability to serve its customers – company,
supplier, marketing intermediaries, customer
markets, competitors, publics
• Creating customer value and satisfaction to
build relationship with customers
COMPANY
SUPPLIER
INTERMEDIARY
CUSTOMER
MARKE
TING
COMPETITORS
PUBLICS
COMPANY
• Other company groups/ departments
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Top management
Finance,
Research & development
Purchasing
Operations
Accounting
• Marketing managers make decision within
strategies & plans made by top management
• All must think “customer” & work in harmony
SUPPLIERS
• An important link in customer value delivery
system
• Provide resources for its products & services
• To watch supply availability – any problems can
seriously affect marketers
– Supply shortage
– Labour problems
– Price trends of key inputs
• Walmart – suppliers – “a tough & demanding
customer but helps you get there”
MARKETING INTERMEDIARIES
• Help company promote sell and distribute its
products to final buyers.
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Resellers
Physical distributors
Marketing service firms
Financial intermediaries
Wholesalers/retailers
• Examples –walmart, malls & other departmental
stores
• Coca- cola as exclusive beverage provider to
many companies
CUSTOMERS
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Five types of customers markets
Consumer markets
Business markets
Relseller market
Government market
International market
COMPETITORS
• Provide greater customer value and
satisfaction that its competitors
• More than simply adapt the needs of target
customers
• Strong positioning – in the minds of people
• No single strategy best for all companies
PUBLICS
• Any group that has actual or potential interest in or
impact on organisation’s ability to achieve the
objectives
• Financial publics- banks, investment firms, stockholders
• Media publics• Government publics• Citizen action publics
• Local publics
• General publics
• Internal publics
MACROENVIRONMENT
• Consists of larger societal forces that affect
the macroenvironment –
– demographic,
– economical,
– natural,
– technological,
– political and
– cultural forces
Macro-Environment Forces (DENTPC)
• The macro - environment of any business consists
basically of six factors:
• Demographic Environment
population- people make up the markets.
• keenly interested in the size and growth rate of
population in
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different cities,
regions and
nations,
age distribution and
ethnic mix.
WORLD POPULATION
• INTERNATIONAL SCENARIO- population explosion; India
will overtake China by 2025 as most populous
• If world be a village of 1000 people–
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520 men & 480 women
330 children, 60 above 65yrs,
10 college graduates, 335 illiterate adults
52 North Americans, 55 Russians, 84 Latin Americans, 95
Europeans, 124 Africans, 584 Asians
– 165 speak Mandarin, 86 English, 83 Hindi/ Urdu, 64 Spanish, 58
Russians, 37 Arabic, rest one of over 200 languages
– 329 Christians, 178 Muslims, 132 Hindus, 62 Buddhists, 3 Jews,
167 non religious, 45 atheists and 86 others
LITERACY LEVELS
• Definition- above 15 yrs and able to read &
write
• In India- 70% males & 48% females are literate
• 52% population male; 13% illiterate, 23.8%
literate but non matriculate, 11.5% literate but
non graduate. 3.4% graduate and above
• Literacy levels vary according to age
– 15-24= 76%; declines with age
US
• BABY BOOMERS- 78 millions (300 millions) –
27.5%; 1946-64; 2.1 trillion $; 75% national
assets; 40% national disposable income by 2029
(65yrs age); all walks of life; 25% ethnic minority
• GEN X- in shadow of BBs; no characteristics; Baby
busters; latchkey kids; divorcee & employed
mothers; more cautious economic outook; more
skeptical; MTV generation;
• GEN Y-echo boomers; 1977-94; children of BBs;
76 m: 160 b $ spending; techno geeks:
CHINA
• One child norm- little emperor/ little empress;
six pocket syndrome; rapidly aging
population; 75% childless homes
• GENERATIONAL MARKETING- Separate products
and marketing programme for each generation ?
• CHANGING FAMILY – nuclear family; one income
one car two children family ; two incomes two car
one child family
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More people divorcing
Live in partners
Late marriage
No issue
• Non traditional households – special care
KOOL GENERATION
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Status symbol – mobile phones
Levi’s – streetwear – Sykes
Titan- “eye gear” – Fastrack
Sony Ericsson – 3D gaming mobile
Scooters – mobikes
MTV/ channel V
Hinglish
Youth culture – Valentine Day/ Friendship Day
GEOGRAPHICAL SHIFTS
• Great migratory movements-population shift
• Metro cities
• Rural to urban (micropolitan areas beyond
metropolitan cities)
• Telecommute
• Telebusiness
• SOHO (small office / home office)
• A better educated, more white collar, more
professional population
• Increasing diversity
• Gay & Lesbian community
• Disabled community
Economic Environment
•
GDP/ Per Capita GDP/ PPP/ Per Capita income/ Growth of
economy/ FE reserves/Inflation/ Stock Market/ demographic
indicators
• available purchasing power in an economy, which depends on the
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current prices,
savings,
debt and
credit availability.
• pay close attention to the major trends in income and consumer
spending patterns.
• Changes in Income/ Income distribution
• Changing consumer spending patterns
• Economic forecasting
NCAER STUDY
(2002)
(1996 & 2006) (figures in millions)
• 5 GROUPS OF HOUSEHOLDS
– Destitutes (<16000 pa) (33/ 190.4 (16.5 / 95)
– Aspirants (<22000 pa) (44/ 254 (20.2/117)
– Climbers (<45000 pa) (54.1/312.2 (81.7/472)
– Consuming class (<2,15000 pa) (32.5/186(75.5/432)
– Rich (own money and wide range of products)
(1.2/ 7(5.2/ 30)
• CHANGING CONSUMPTION PATTERNscooters/ M800 car
CHANGING PATTERNS
1999 v/s 2003 (%)
GROCERY
44
41
SAVINGS
14
4
EATING OUT
8
10.8
PERSONAL CARE
6
7.6
CONSUMER DURABLES
6
7
CLOTHINGS
5
7
BOOKS & MUSIC
OTHERS
5
remaining
7.6
PHILOSOPHY OF EARN NOW AND SPEND LATER
EARN NOW AND SPEND NOW
STUDY
• RESEARCH INTERNATIONAL 2002- significant
regional differences in values/ attitudes/
preferences of women – 4 clusters
• Traditionalism and self sacrifice to westernisation
and individualism
• Based on shopping habits- categories of women
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“Liberated youngsters” (13%)
“Modern mums” (18%)
“Behind the times” (20%)
“Rebellious youngsters (22%)
“Orthodox mothers (27%)
Natural Environment
• be aware of the threats and opportunities
associated with the four trends
– the shortage of raw material,
– the increased cost of energy,
– the increased levels of pollution(environmentally
sustainable business), and
– the changing role of the governments.
GREEN MARKETING
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OBSTACLES
Over exposure & lack of credibility
Consumer behaviour
Poor implementation
Technological Environment
• One of the most dramatic forces shaping people’s
lives. a force for "creative destruction.“
• Wonders or blunders
• New technologies that provide superior value in
satisfying needs stimulate investment and
economic activity.
• In the meantime minor innovations fill the gap,
involve less risk ; too much research effort is
going into producing minor improvements rather
than major breakthroughs.
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• New technology creates major long-run
consequences that are not always foreseeable.
• RFID –smart chips
• Practical, affordable and safe
• Accelerating pace of change
• unlimited opportunities for innovation
• Greater emphasis on R&D
• Increased regulations of technological change
EXAMPLES
• RAYMOND LTD. –
– fabrics made from exotic fibres.
– Tancel, natural fibre from woodpulp; blended with
wool- greater softness and drape;
– Casein, a fibre made from milk protein - a butterfly
feel;
– Bamboo & Soyabean fibres for softness & resilience
• SAMSUNG- Digital Home Business
• VIRTUAL REALITY (VR) – 3 D computer generated
environment (sight, hear & touch) – automobile,
kitchen , exterior home design
Political / Legal Environment
• Marketing decisions are strongly affected by
the developments in the political and legal
environment.
• that influence and limit various organisations
and individuals.
– laws,
– government agencies and
– pressure groups
BUSINESS LEGISLATION
• PURPOSE - To charge businesses with social
costs created by their products or production
processes
– To protect businesses from unfair competition
– To protect consumers from unfair business
practices
– To protect society form unbridled business
behaviour
Social Environment
• The society in which people grow shapes their
beliefs, values and norms.
• People absorb, almost unconsciously, a wide view
that defines their relationship with themselves,
others, nature and the universe.
• Socially responsible
• Cause related marketing- one rupee on each
notebook sold to CRY; paperless accounts
statements;
• Do well by doing good
Cultural environment
• Persistence of cultural values
• Shift in secondary cultural values
• People’s views
– People’s view of themselves- “Do It Yourself”
“Adventurers”
– People’s view of others- “cocooning” “Digital Age”
– People’s view of organisation- “work for money” “scams”,
“economic downturn”
– People’s view of society- “patriotism”
– People’s view of Nature – “LOHAS” market- everything
natural (green)
– People’s view of Universe-”religion”, “spiritualism”
REACTING TO ENVIRONMENT
• 3 TYPES OF COMPANIES
– Those who make things happen
– Those who watch things happen
– Those who wonder what has happened
• View the environment as uncontrollable to which to
react and adapt-avoid threat and take advantage of
opportunities
• Proactive stance – firm aggressive action
• Cannot always control environment forces – shifting
population/ economic environment/ major cultural
shift; but taking proactive steps is in our hands