UNIT 1 Marketing Marketing is managing profitable customer relationships. The two fold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction. Thus we can say that marketing is a process by which companies create value for the customers and build strong customer relationships in order to capture value from customers in return. Marketing management orientations/principles There are six concepts under which organizations design and carry out their marketing strategies as the production, product, selling, marketing, societal marketing and holistic marketing concepts. • Production concept: The production concept says that the customers favor only those products that are available and highly affordable. The management only wants to increase the production and distribution. This is one of the oldest concepts of marketing that is made with the supply side only. This concept has not focused on the demand side of the customers and only claims that the customers will accept any products that are available and affordable. Even though it is one of the oldest concepts but this concept is still useful in some situations as in monopoly markets where there is only one seller and many buyers. For example Nepal Electricity, Nepal Petroleum etc • Product concept: This is also one of the old philosophies which portrays that the sales of the product can increase if an organization will focus highly on quality, performance and features. The organization should always focus on the continuous product improvement and it should consider that customers are highly quality conscious. This concept has also focused on the supply side only as the production concept but it has totally left the demand side of the product. The concept has one of the biggest shortcoming that in this concept, the organizations develop products without considering the demand of the customers from the marketplace. Cont… Selling concept: The selling concept portrays that the consumers will not purchase the products of the organization unless it undertakes a large scale selling and promotion efforts. • This concept holds true mainly for the unsought products when customers do not think of buying the products as insurance. As there will be aggressive selling, the production cost decreases and the company can sell the products at lower costs. • The company just wants to create the sales rather than making a long term profitable relationships with the customers. This concept has also focused on the supply side of the market. • The sellers assume that the buyers will like the product that is offered in the market by them. They have not also considered about the demand and desires of the customers. • They believe that even if the customers don’t like the product, they will possibly forget their dis-appointment and finally purchase the product. Thus, we can say that the concept is based on false assumptions. Cont… Marketing concept: The marketing concept says that the organization should at first understand the needs, wants and desires of the customers in the marketplace and finally they should provide the goods and services to the customers to fulfill their needs and desires than any of the other competitors do. It is a customer centered approach that is based on ‘sense and respond’ philosophy. The concept just says that the organization should not find right customers for the product but it should find the right products for the customers. This concept has at first focused on the demand side of the market and finally it says that the supply should be done in accordance with the demand of the customers. The marketing concept starts with a well-defined market, focuses on customer needs, and integrates all the marketing activities that affect customers. In turn, it yields profits by creating lasting relationships with the right customers based on customer value and satisfaction. Cont… Societal marketing concept: The societal marketing concept says that the organization should at first understand the needs, wants and desires of the customers in the marketplace and finally they should provide the goods and services to the customers to fulfill their needs and desires than any of the other competitors do and finally they should work of the long run interest of the society. This concept has focused on the process of maintaining long run relationships with the customers and the society in which they operate. The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and society’s wellbeing. The companies should balance three considerations in setting their marketing strategies as company profits, consumer wants and society’s interests. Cont… Holistic marketing concept: The holistic marketing concept is the latest development in marketing thought emerged in 21st century. According to Philips Kotler, “the holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependence”. This concept is the integration of marketing concept and societal marketing concept with a focus on relationship marketing. This concept is based on four important themes as follows: Cont… • Relationship marketing: This concept has emerged from the 1980s and widely accepted by the organizations in this contemporary world. This concept focuses that an organization should not work for short term benefits (transaction marketing) but it should always focus on building long term profitable relation with the key customers. Relationship marketing never focuses on immediate sales; rather it is directed at building a large group of satisfied and loyal customers. Besides it focuses on the customer retention and winning back the lost customers. Finally, this concept has given emphasis on building win-win relationship with the valued customers, dealers, distributors, suppliers and other stakeholders. • Integrated marketing: This concept focuses that an organization must integrate the activities of 4Ps i.e. Product, Price, Place and Promotion with the different components of communication mix i.e. advertising, personal selling, sales promotion, public relations and direct marketing to achieve the goals of marketing i.e. profit and customer satisfaction Cont… • Internal marketing: This concept views that everybody inside the organization is a marketer for the organization. An organization must hire good employees, train them properly and motivate them to serve the customers properly. At first an organization should launch customer oriented philosophy and then internal marketing should be implemented at two levels as follows: Marketing department level: All the activities related to marketing like advertising, customer services, product management etc. should be customers’ oriented Other department level: The customer oriented philosophy must be embraced by all other departments within the organization. Every other departments should think that the organization can get success only by satisfied and loyal customers. • Performance marketing: This concept focus on two important concepts as financial accountability and social responsibility marketing as follows: Financial accountability: Marketing activities like promotion, brand building, sales force management etc involve huge costs and thus they must be justified with long term profit for the organization Social Responsibility marketing: Same as social marketing concept given above Marketing management • The use of management principles and activities to achieve the goals of marketing as profit generation and maintaining long term profitable relation with the key customers is called marketing management. Marketing management is the process of scanning the environment, analyzing market opportunities, designing marketing strategies, and then effectively implementing and controlling marketing practices. Marketing management can be taken as a science and art of choosing the target market and build profitable exchange relationship with them. There are different objective of marketing management as follows: • Creation of new customers • Satisfying the need of customers and retaining them • Sustain and enhance the profitability of business • Upgrade the living standard of customers Tasks of marketing management There are three important tasks of marketing management described as follows: Marketing planning: Planning simply means ‘thinking before doing’. It refers to a strategic planning of a marketing organization, formulated for achieving the desired goals in the long run. It involve various jobs as follows: • Scanning the environment and analyzing the changes in the environment for situational analysis • Conduction SWOT analysis • Establishing the marketing goals to be achieved in a certain time period • Designing different marketing programs like product design, price mechanism etc • Allocation of human, financial, physical and informational resources to the departments • Determining supervising style and setting performance standards Implementing the marketing plans and programs: Bringing the plans into reality is called implementation of marketing plans and programs. Different steps must be followed by an organization for proper implementation of marketing plans and programs as follows: • Develop marketing organization structure • Recruitment and selection of appropriate manpower and assign them the right jobs • Create efficient work teams and assign them tasks properly • Develop effective communication system in an organization • Develop effective leadership style and maintain good motivation techniques Cont… Marketing control: Standards or goals are set during the planning process. Reality is achieved during the implementation phase. During the control phase, expectations are matched with the reality. If E>R, then corrective actions are taken by an organization called marketing control. Marketing control is done through the monitoring and evaluation of marketing performance during and after the plan period. The key methods of marketing control are as follows: • Annual Plan Control: The annual plans related with sales, market share, marketing expenses etc are controlled by an organization • Profitability control: Measure and control long term profits of the company in terms of products, territories, customer group etc • Efficiency control: Measure and control the effectiveness of sales force, advertising and sales promotion, distribution system etc in making desired level of output • Strategic control: Measure and evaluate the entire marketing system within the given environmental problems and threats. Marketing challenges in the new millennium Due to the cause of rapid development in the technology and globalization, the world is changing quickly. The dynamic nature of the external environment has created a lot of challenges for the marketer. A marketer must understand these challenges and work properly to cope with them. Some of the marketing challenges are as follows: • Digital age: Technology has rapidly changed in this modern world. There is huge development in the communication, information and other digital technologies give a change to the companies to create more value for the customers. We can be easily connected with everyone around the world due to this technological growth. Marketers can understand about the customers and their purchasing behavior easily and quickly. There are basically two important things that have emerged and totally changed the world. They are mobile phones and internet. The internet is a vast public web of computer networks that connects users of all types all around the world to each other and to an amazingly large information repository. The managers that cannot adapt themselves according to this technological change cannot sustain the business. So, to understand the modern technology and adapt according to it is a challenge for the marketers. Cont… Rapid globalization: Globalization is a process of making the goods and services available to the whole world. If we would recall the classical world, there are no system of globalization. The products and services available to one location could not be easily found in another location. But now the system has totally changed. The products available in one corner of the world can easily be ordered and achieved from another corner by the help of good transport, internet and mobile phones. The rapid globalization has created extra burden to the managers. The marketing managers should not only compete with the competitors of their locality or country but they will have to compete with everyone in the world. If they cannot be competitive then they can be easily thrown out from the business. So it is an issue for the marketing managers. Cont… • • Ethics and social responsibility: Ethics are the moral principles or personal boundaries where as social responsibilities are the obligations that an organization must follow for the betterment of r the society. Now a days, people are always making an issue for the ethics and social responsibility. If a marketing manager is not ethical or he is not socially responsible then he will be totally discarded by the society. For example, the Nike was rejected in the western society due to the exploitation of child labors in Vietnam. Similarly Nepali Gudhpak of New Road was rejected by the Neplese society due to unethical practices. If the organization is ethical and responsible for the society, then it will also make free publicity for the organization. For example, Maayos environmental cleaning program. The growth of Not for profit organizations: Not for profit organizations are those organizations that have a major objective of providing the services to the customers but not to make the profits. Such type of organizations are as schools, hospitals etc. Now a days there are excessive amount of such organization. A marketing manager working in such organizations should not work with a profit motive. He should work for the sake of public benefit. But now a days, such organizations have also concentrated in achieving the profit. A marketing manager should be able to show the people that they are working for the betterment of the society and also generate some profit for the sustainability of the organization. This is big challenge of the marketing manager. Firm’s responses to the challenges There are different responses shown by the organization to overcome the challenges as follows: • Develop marketing plans that are designed to build long run profitability • Try to protect or increase the investment in marketing activities • Develop marketing strategy that balances the needs of customers with the organization • Develop marketing strategies to involve other firms that are crucial to deliver the promise made by an organization to the customers • Develop strategy to monitor progress and provide accountability • Motivating others to be passionate about data quality Rural marketing Rural marketing is a process of understanding the needs, wants and demand of the rural customers for specific goods and services. Afterwards, the organization will transfer these goods and services to the rural market to satisfy the needs of customers. They try to satisfy the customers and provide them better standard of living. The rural market is slowly expanding in the case of Nepal and thus many marketers have started to expand their market in that area. Approaches There are three different approaches in rural marketing as follows: • Urban to Rural: Selling goods and services like FMCG products, pesticides, consumer durables etc from the urban area to the rural area • Rural to Urban: It is also known as agricultural marketing. In this approach, the products like fruits, vegetables, forest products, dairy products etc are sold from the rural market to the urban market • Rural to Rural: Products are sold between two rural areas. For example, pottery, agricultural tools, handicrafts etc. Characteristics of Rural marketing • Large population: Population comprises to about 83% of the overall population in Rural market. This means that there is huge population and a large market in the rural area • Diverse and heterogeneous market: There are different people of different religion, culture, age group etc in the rural market. This means that the rural market has a market for all kinds of goods and services • Socio-economic pattern: Majority of the people in the rural areas have low per capita income and low purchasing power • Literacy level: Rural area has literacy rate of 38% while urban area has literacy rate of 64% in the case of Nepal • Standard of living: Due to the cause of low literacy rate, low per capita income and low purchasing power, the customers in rural market have a very low standard of living • Cost: The cost incurred for the promotion of the product will be much lower in rural market than in the urban market. Relationship marketing Relationship marketing is a process of building long run profitable relationship with the key customers in the business. The key customers are those customers that generate maximum revenue for an organization. It has an aim of building mutually satisfying long term relationship with key parties in order to earn and retain their business. The operating principle of relationship marketing is simple: “build a healthy network of relationships with key stakeholders and profits will follow”. Relationship building process: Draw figure from book (Page number 26); Shyam K. Shrestha Relationship marketing consists of the following steps as follows: • Suspects: Suspects can be every individual who might purchase the product but may lack real need for the company’s product. • Prospects: Prospects are the people who have a substantial potential interest in the product and the ability to pay for it. • Disqualified prospects: Some of the suspects become disqualified prospects when they have no interest on the product or they don’t have any money to spend. They may also be rejected on the basis of their poor credit profile. Cont… • • • • • Qualified prospects: When prospects are well equipped to buy the product, they become qualified prospects. If such prospects are motivated properly then they can be the first time customers for an organization. First time customers: When the qualified prospects purchase the product for the first time then they are called first time customers. Repeat customers: The customers who purchase the products on a continuous or repeated basis are called repeat customers. Clients: Clients are the customers who buy the products only form the company in the relevant product categories. Members: The satisfied clients purchase the products on a regular basis and they become members for the organization. Cont… • Advocates: When customers are fully satisfied then they purchase the products and become loyal to the company. They spread positive word of mouth and motivate others to purchase the products too. • Partners: The advocates can even help the marketers actively to achieve a common goal called partners. • In-actives or drop outs: In every stage of relationship building process, some of the customers may be in-actives and stop purchasing the products from the organization called in-actives. Some common reasons for inactives can be bankruptcy, move to other locations, dis-satisfaction etc. Level of company investment in customer relationship building In order to increase customer’s revenue, an organization has to spend more on building greater customer loyalty. There can be five different levels of company investment in customer’s relationship building process as follows: • Basic marketing: The sales person just sells the product in such marketing. They do not care about other aspects of the customers. • Reactive marketing: The sales person sells the product and encourage the customers to call if he or she has any questions, comments or complaints • Accountable marketing: The sales person collects feedback from the customers after making the sales. The feedback can be positive or negative in the form of disappointments or suggestions. These negative feedbacks can be used for improving the company’s performance. • Proactive marketing: The sales-person contacts the customer time to time with suggestions about improved product uses new products available with the company. • Partnership marketing: The Company works continuously with the customer to find out the ways to affect customer savings or help the customer perform better. Importance of Relationship marketing The importance of relationship marketing is described as follows: • It helps build harmonious relationship not only with the customers, but also with the distributors, stakeholders, and other segments of the society. • Relationship marketing encourages understanding the complaints and dissatisfactions of the customers and makes all the salespeople accountable to satisfy the customers • It can help to understand the actual need and desire of the customers • It can help to develop committed customers for the marketer. Green marketing Green marketing is the marketing of products that are presumed to be environmentally safe. It is a process of selling products and services based on their environmental benefits. Such products should be environmentally safe or produced and packaged in an environmentally friendly way. Ecological issues have not only become the concerns of society but also of the corporate world. The business firms should not affect the ecological balance when performing their business activities. Marketing of products taking into considerations the ecological issues is popularly known as green marketing. Companies that consider green marketing are Toyota, P&G etc. The green marketing campaign highlights the • Superior environmental protection characteristics of a company’s products • Whether those benefits take the form of reduced waste in packaging • Increased energy efficiency in the product use • Decreased release of toxic emissions and other pollutants in production Reasons for adopting green marketing There are different reasons for adopting the green marketing concept described as follows: • To enjoy opportunities or competitive advantage as customers now are more environment conscious and prefer environment friendly products • To fulfill corporate social responsibilities as it is a best way to tell society that “Yes we care for environment” • To follow government pressure as different laws compel companies to abide particular environment related instructions • To avoid and minimize competitive pressure and increase profit E-marketing E-marketing is also known as online marketing. It is conducted through interactive online computer systems. The online systems link buyers with sellers electronically. It can be defined as a process of applying marketing principles and techniques using various forms of electronic media, primarily the internet. Features • Provides opportunity of global marketing • Less expensive in comparison to traditional marketing tools • Buying and selling can be done from anywhere making the commercial purpose more easier • Marketers can reach its target customers in a broad range of way • Buyers will have maximum choices for purchase • Information can be easily obtained for both the buyers and sellers • Interaction can be easily done between the sellers and buyers Classification: The e-marketing can be easily classified in three types as follows: • B2C e-marketing: Hilltake.com.np • B2B e-marketing: Milpro.com • C2C e-marketing: Hamrobazar.com Pyramid marketing Pyramid marketing is a process in which an organization doesn’t sell their products through a conventional distribution system and retail outlets but through individual people selling to their friends, acquaintances and strangers. This concept was initiated by two business partners Jay and Rich. This concept says that sales force are compensated in two terms as • For every sales they generate • For every sales generated by the sales representation they recruit • The recruited sales representative can be anyone i.e. relative, friends or some strangers too. Approach • The multilevel marketing company recruits sales representative with the option to become a manager. These sales representatives are paid commission on their sales. They are not given any salaries for their work. The company gets benefits due to the rapid expansion by the addition of number of trained sales representatives at each level. Sales representatives are also in a position of benefits mainly for two reasons: • Income is not limited to their selling ability and • They can earn commission from sales generated by sales representatives they trained Marketing mix • The set of controllable tactical marketing tools- product, price, place and promotion that the firm blends to produce the response it wants in the target market is called marketing mix. • The marketing mix consists of everything that a firm can do to increase the demand of its product in the market. There are different possibilities to increase the demand but we classify it into four ways as product, price, place and promotion. 1. Product: Product means the goods and services combination the company offers to the target market. It consists of • Product design (shape, color, size) • Product variety (line and items) • Quality (standardization and grading) • Features • Branding, trademarks, packaging, services, warranties, product planning and development. Cont… 2. Price: Price is the amount of money that the customers must pay to obtain the product. It includes • List price • Credit terms • Discount • Allowances • Payment period etc. 3. Place: Place includes company activities that make the product available to target customers. It consists of • Types of channels/ middleman • Store/ distributor location • Storage • Transportation • Inventory • Logistics etc Cont… 4. Promotion: Promotion means the activities that communicate the merits of the product and persuade the target customers to buy it. It includes • Advertising • Personal selling • Sales promotion • Public relation Other P’s as People, Process and Physical evidence is described in Unit product Marketing environment The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers is called marketing environment. We study about two types of environment as Micro-environment and Macro environment • Micro environment: The actors close to the company that affect its ability to serve its customers- the company, suppliers, marketing intermediaries, customer markets, competitors and publics etc is called micro environment. The company: The marketing managers must work in proper coordination with the top managers, and other department as finance, R&D, purchasing, operation etc. Top managers make missions, visions, objectives and strategies for the whole company and marketing manager must work as per the strategies made by top management. But they must think about the customers before fulfilling the strategies. Cont… • Suppliers: Suppliers provide resources to the company to produce goods and services. Supplier’s problems directly harm over marketing. Supply shortages, or delays, labor strikes and other events can cost sales in short run and damage customer’s satisfaction in long run. Rising supply prices harm the company’s sales volume directly. • Marketing intermediaries: The marketing intermediaries help to promote, sell and distribute its products to final buyers. It includes resellers, physical distribution firms, marketing services agencies and financial intermediaries. • Resellers: Distribution channels ( resellers, whole sellers etc) • Physical distribution firms help the company to take goods from the point of origin to the point of sales) • Marketing services agencies includes research firms, advertising agencies etc • Financial institutions include banks, financial institutions etc Cont… • Competitors: The marketing concept states that to be successful, a company must provide greater customer value and satisfaction that its competitors do. Thus, marketers must do more than simply adapt to the needs of target consumers. They also must gain strategic advantage by positioning their offering strongly against competitors’ offerings in the minds of consumers. • Publics: Publics are the interested groups that impact the organization to achieve its objectives. There are different types of publics as follows • Financial publics: Banks, investment houses etc. • Media publics: News papers, TV, radio, etc. • Government publics: Taxation policy and other rules • Citizen action publics: Consumer organizations, environment groups etc • General public: People attitude towards the product • Internal public: Workers, managers, volunteers etc. Macro environment The external environment that operates outside the organization and cannot be controlled by the organization is called macro environment. It shapes opportunities and poses threats to the company. The macro environment of the marketing consists of • Demographic environment: The study of human population in terms of age, gender, size, density, location, race, occupation and other statistics is called demography. The demographic factors that directly affect over the marketing are as follows: • Population size: Increased population size results in the increased market size. For example large market is achieved in India, China etc. • Population growth: It the population growth rate is higher, size of the market will be larger resulting in increased marketing opportunities. • Population migration: It affects over the marketing directly. For example the increase Indian population in Nepal has resulted in the demand for wheat in Nepalese market. • Urbanization: When people migrate from the rural areas to the urban areas then they will follow the life style of urban people. This increases the opportunity of fashionable, durable and furnishing goods. Cont… • • Changing family system: The change in the family system has been observed in the past few decades. Basically, in the case of developing countries like Nepal, the change has led to various outcomes. Due to the cause of attraction toward western civilization, development rate or enhancement in the education rate the family system is changing. The changed family system has changed the family from joint to nuclear system. Besides, it split rate is also increasing in the urban sectors. i.e. the society is becoming more and more individualistic. The work of the male and female in the family has also changed. Both of the people work in the office to earn money and both have their own needs and demand. The changing family system can create opportunity for a marketer. For eg. Since both male and female works, the marketer can sell the products like bikes; cars etc. or more focus can be given on readymade products. Changing role of woman: The role of woman is rapidly changing since the past few decades. This is mainly due to the cause of increase in the educational rate in the women or women empowerment. Long time ago, people used to see women as slaves. They could not go out and they should look at the home and the family only. Now the situation has totally changed. The increase in the educational rate in the women has made then independent and highly ambitious. They have their own needs and demand and they directly involve in the family decision making. Due to this cause, the marketers can sell such products that are designed especially for them. For example sales of scooty pept are very high and it is in the increasing trend. Cont… • • • Economic factor: Economic factor is always considered as one of the most significant force of the macro environmental factor. It directly affects over the consumers buying power and spending patterns. The economic factor is always affected by the general economic condition of the country i.e. whether the country is in the condition of prosperity, recession, depression or recovery. If the country is in prosperity the heavy priced goods can be marketed but if the country is in the condition of recession then lower priced goods are mostly sold. The buying power of the consumers is an integral part of economic environment. The buying power of the consumers is determined by the inflation rate of the country and consumers income. Marketers should also be aware of the changing income distribution and spending patterns because income distribution and consumption pattern displays which good has a potential market and which good has no market. Natural factor: Natural resources are very important for the production process. The depletion in the natural resources will cause the increase in price and the decrease in consumption. Marketers must be aware of the several trends in the natural environment as Shortages of raw materials: Raw materials can be in the form of renewable or non renewable resources. Organizations that are working with non renewable resources as oil, petroleum products etc. may face problems of raw materials availability. Cont… • Increased pollution: The raw materials are being depleted due to the increase in the pollution as air pollution, water pollution; land pollution, sound pollution etc. The main causes of the pollution are the industries themselves. • Increased government intervention: The governments of different countries have shown keen interest in the natural resource management. The government exerts pressure on the industries to reduce the pollution rate and work for the environmental sustainability. Technological factor: Forces that create new technologies, creating new product and market opportunities constitute the technological factor. Technological environment changes rapidly and the organization must work in proper coordination with the new technology to reduce the cost of production and increase the sales. New technologies create new market and new opportunities for the marketer. A marketer must understand the level of technology, pace of technology, Research and Development etc. to market such products that are practical and affordable. Cont… • Socio-cultural factors: Society is a group of people having distinct beliefs, knowledge, habits, tastes, values, culture and life cycle. Culture is the shared beliefs, values and attitudes within the members of the society. Society changes rapidly due to the change in technology. For eg. Roads (transportation), IT etc. In the case of Nepal, people are attracted with western culture. They are focusing on individualism, small families and loose relationships. The changes are also seen in the values, beliefs and attitudes. Similarly, changes are observed in the dressing, housing, food, education and entertainment. This has directly created opportunity for the marketers. The examples of such opportunities are community housing projects, increment in the usage of bikes, cars, jewelry, mobile phones etc. • Political and legal factors: Political environment consists of laws, government agencies and pressure groups that influence and limit various organizations and individuals in a given society. It constitutes of • Laws- legal provision: For fair trade, competition, environment protection, product safety, advertising etc. • Government policies: Government policies are ways of doing things. They are made by the government to protect the companies and the consumers. Reactive and Proactive marketing Reactive and proactive marketing holds major significance in marketing decision making. • Reactive marketing: Marketers use various tactics when opportunities and challenges arise in marketing environment. The marketing environmental forces are unpredictable and uncontrollable for an organization. Thus an organization tries to change itself according to the changes in the external marketing. It is mainly done by an organization due to extreme competition in the market. For example, there is a lot of consideration on the issue of MSG (Mono Sodium Glutamate) in noodle industry. Mayos noodles then gave an advertisement on this issue by displaying that “No added MSG” as a response of the issue. Features of Reactive marketing: There are different features of reactive marketing listed as follows: • There are no written marketing strategies. Reaction takes place as problems arise • Referrals occur whenever the customer decides to call • The approach used in marketing is inconsistent and weak • It depends on bottom of the barrel approach like group on • When marketing is done, it is usually a “let’s try this latest fad Cont… Proactive marketing: In the case of proactive approach, marketer will analyze the environment properly to understand what the customer is really seeking. It is a form of marketing that allows the marketers to be agile, real time, data driven and adaptable to the ever changing space of what their customers could be seeking. Even though the environmental forces are very hard to predict and understand, but their changes can be predicted if proper planning is done. There will be a lot of scanning and predicting work in proactive marketing but the results will be very influential to the customers. For example, Kantipur Publication understood the importance internet in the customers and developed e-kantipur to fulfill their needs Features of Proactive marketing: • Creating a written marketing plan based on the analysis and research conducted in the environment • It is viewed and treated as a manageable business process • It is not done when crisis arises but it is a process of planning before the problem can arise • Referrals are regularly generated through incentive programs, social media and other means Marketing environment in Nepal The marketing environment in Nepal can be described under the following variables. • Economic environment: Nepal is an agriculture based country with a per capita income of about US$ 700. There is mixed economy in the country and high poverty rate with unbalanced income distribution. High rate of inflation is observed in the country. Private sectors have insufficient role in the development and the country depends upon the foreign traders from imports of necessary goods. The development in the service sector is good in the recent years with the demand for luxury, communication and service related items like motorcycles, cars, mobiles, laptops, banking and insurance services etc. • Demographic environment: According to the 2011 census, Nepal has 26.6 million people with annual growth rate of 2.25% annually. Male and female are equally distributed and about 83.1% people are living in the rural areas. Even though maximum people live in the rural areas but the marketing activities are concentrated in the urban areas. Due to this immigration is seen maximum from the hilly region to Terai and village to city areas every year. Cont… • Socio-cultural environment: People from different culture, different religion and different ethnic groups live together inside Nepal. The society and culture in Nepal is highly influenced by the western culture. Our food, dressing, dances, music, education etc. are westernized creating a big market for the western products. There are different salient features that explains the dynamic sociocultural environment in Nepal as rise in middle class, shifts in lifestyle, growth in nuclear family, change in working culture, change in attitude, shift in shopping –culture etc. • Political-Legal environment: Nepal has changed into a politically disturbed country. After the Maoists insurgency, stability is never seen in the country. Frequent changes are seen in the policies and laws affecting the business sectors both nationally and internationally. Different types of bundhs and chakka jams etc are predominant in the country. The consumer protection laws are only in the legal books proving that the country has a hostile political and legal marketing environment. Cont… • Technological environment: Labors have cheap wage rate in the country and many organizations are using these labors for the work. Industrial development is weak and modern technology is not adopted by them. Some modern technologies are used by them but it is not in abundant amount. Even rural farmers are using traditional methods for production. Advanced technologies are used by the multinationals but the pace of technological change is unsatisfactory. New innovations are not seen in the technology but now a day information technology is gaining momentum. • Natural resources: Nepal is very rich in natural resources as herbs, water resources, forests etc. These resources raise opportunity for the development and also attract the tourists. In the recent years, over pollution, exploitation of natural resources for commercial purposes, deforestation and increasing population is causing environmental degradation. Cont… • Competitive environment: Size of the market is small and thus the domestic producers can’t easily compete with the foreign investors. Majority of the raw materials are not available in the country and we have to depend upon the imported raw materials for the production. People are extremely price sensitive and they prefer the international products more than the national products. The market is seller-oriented with less bargaining power of the customers. Both product and market specialization is lacking in the country however competition is seen in some products as noodles, alcohol, tobacco, banking, insurance, telecommunication etc.
