The Marketing Environment

The Marketing Environment

It is important for the marketer to study the

environmental forces in order to counter them or take advantage of them. It requires analysis and diagnosis of the environment on a regular and continuous basis. Analysis of the external environment helps to identify the threats and opportunities in the environment and also to devise necessary responses to these.
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The Marketing Environment

The study of marketing env. helps to:
Observe and study the relevant events and trends . Figure the favorable opportunities and unfavorable threats. To project how the environment will be at a future point To assess the scope of various opportunities To secure the right fit between env. and business unit.

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Marketing Environment
Includes:
Microenvironment: (The task environment) actors close to the company that affect its ability to serve its customers. Macroenvironment: (broad environment) larger societal forces that affect the microenvironment. Considered to be beyond the control of the
organization.

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Actors in the Microenvironment

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The Companys Microenvironment

The Company
The companys mission, goals and objectives, its strategies and policies The companys internal environment and interactions between departments within the organisation.

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The Companys Microenvironment

Suppliers:
Provide resources needed to produce goods and services. Important link in the value delivery system. Most marketers treat suppliers like partners.

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The Companys Microenvironment

Marketing Intermediaries:
Help the company to promote, sell, and distribute its goods to final buyers Resellers Physical distribution firms Marketing services agencies Financial intermediaries

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Partnering With Intermediaries

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5 Types of Customers
Consumer markets Business markets (B to B) Reseller markets Government markets International markets

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Competitors
Must understand competitors strengths Must differentiate firms products and

offerings from those of competitors Competitive strategies should emphasize firms distinctive competitive advantage in marketplace

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Types of Publics

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The Macroenvironment
The company and all of the other actors operate
in a larger macroenvironment of forces that shape opportunities and pose threats to the company. Successful cos. respond to unmet needs and trends. They track
Fads Trends Megatrends
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The Macroenvironment
The forces in the macroenvironment
represent the uncontrollables which the company must monitor and respond to. There are a no. of things happening both at the national and international levels which affect our businesses uniquely.

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The Companys Macroenvironment

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The Macroenvironment
Demographic environment: The main demographic force that

marketers monitor is the population

Size and growth rate Age distribution and the ethnic mix Educational levels Household patterns Regional characteristics and movements.

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Age Composition
A marketer needs to understand the age composition of
a country in order to decide his optimal marketing mix as well as to decide on the market segments to enter.
India makes up about 16.7% of the world population. The Indian population is growing at a rate of 1.40% 72% of the Indian market is young in the age group 5-44 years The Indian population will remain young till 2016 36% of the population is below 25 years and only 25% is above 45 years. 52% of the population is male with a sex ratio of 933:1000

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Changing Indian Family

The changing role of women The changing role of men Changes in occupation profiles as a result of
better education Changes in lifestyles because of changes in occupation. Nuclear families.

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Better Educated Population

As of 2001:
65.4% of the population was literate 75% males and 54% females were literate Out of 52% males in the population,13% are illiterate, 23.8% are literate but non-matriculate, 11.5% literate and matriculate and only about 3.4% are graduates 24% of the females are illiterate,16.5% literate but nonmatriculate,6% matriculate and only1.4% graduates. 76% of the people between 15 24 are literate . This proportion declines in the higher age groups.

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Geographical changes
Movement of population from one area to the
other
Movement to urban areas Movement from one city to another Movement of industry and workforce including professionals to certain emerging centers of industrial activity. This kind of migration offers many opportunities for marketers and infact alters the total marketing scenario

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Economic Environment
Consists of factors that affect consumer purchasing power and spending patterns.
The purchasing power depends on current income, prices, savings, debt and credit availability. Trends affecting purchasing power have an impact on business.
GDP PPP Per Capita Income

Inflation
Foreign exchange reserves

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Economic Environment
The spending pattern is determined by the

income levels. The NCAER has classified Indian consumers into five categories based on the income patterns i.e.
Very rich , income over 2,15000 Consuming class (rich), 45001-2,15000 Climber (middle class), 22001 - 45000 Aspirants (lower income), 160001 - 22000 Destitute (poor) , below 16000
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Economic Environment
Income class
The rich
Consuming class

Households (fig.in millions) 5.2 75.5

81.7

Estimated popln.(in millions) 30 432

472

Climbers

Aspirants
Destitute

20.2
16.5

117
95
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Natural Environment
Involves the natural
resources that are needed as inputs by marketers or that are affected by marketing activities. The four major trends can prove to be opportunities or threats in the natural env.
Shortage of raw materials Increased cost of energy Pollution levels Changing role of govt.

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Technological Environment

Most

dramatic force now shaping our destiny.

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Technological Environment
The marketer needs to monitor the
following trends in technology
The accelerating pace of change The opportunities for innovation Emphasis on R&D. Increased regulation on technological change

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Cultural Environment
The institutions and

other forces that affect a societys basic values, perceptions, preference, and behaviors. And also guide purchase patterns
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Cultural Environment
India has various cultures and sub- cultures with

about 30 languages and 200 mother tongues. Regional differences, social customs, values ,religion and caste system make India both diverse and complex in its social environment. The progression from traditionalism to westernisation and individualism as we move to the higher strata of society is quite obvious.

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Cultural Environment
Women have been classified into five
Liberated youngsters Modern mums Behind the times Rebellious youngsters Orthodox mothers

categories based on their shopping habits

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Cultural Environment
The marketing decisions need to be fine
tuned to reflect the needs ,aspirations and attitudes of consumers who have distinct preferences and habits across consumer segments.

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Political Environment
Includes Laws, Government Agencies, and Pressure Groups that Influence or Limit Various Organizations and Individuals In a Given Society.
Increasing Legislation

Changing Government Agency Enforcement Increased Emphasis on Ethics & Socially Responsible Actions

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Responding to the Marketing Environment

Environmental Management Perspective

Taking a proactive approach to managing the

environment by taking aggressive (rather than reactive) actions to affect the publics and forces in the marketing environment. This can be done by:
Hiring lobbyists Running advertorials Pressing lawsuits Filing complaints Forming agreements to control channels
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Market intelligence system

Newspapers books and periodicals Sales force spot and report new developments in the

market Distributors ,retailers and other intermediaries pass on important intelligence Company networks Govt. data sources Purchase information from outside suppliers Use of on-line feedback to collect competitive intelligence (blogs, chat rooms, opinion forums etc..) Internal records and reports

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The Seven U.S. Generations

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