Marketing

Environment
Presented By
Vishal Sharma
What is Marketing
Environment
 To analyze the internal and external factors
which influence the company.
 Environment forces are dynamic and change
brings uncertainties, threats and
opportunities.
 Firm

Internal Factors External Factors

Internal Factors
Human Resources

Production Facility

R&D
Internal
Factors

Company Location

Financial Capability

Company Image
External Factors
External Environment

Micro Macro

•Suppliers •Demographic
•Marketing Intermediaries •Legal
•Customers •Political
•Technological
•Socio-cultural
•Economic
•Natural
Internal vs. External Factors
 These are inherent
 It effects whole industry
factors of the firm. rather than single firm.
 Can be controlled by
 Can not be controlled
the management. by the management.
 Can be divided into
Macro and Micro
factors.
Competition
 Ithas significant effect on the marketing
environment.
 Market dynamics changed due to the
competition.
Types of Competition
1. Monopoly :
 Only one firm controls over the supply & price of the
product.
 No close substitute.
 Eg British East India Company created monopoly in
trading
2. Oligopoly:
 few seller
 actions of one player affect other.
 usually sell the branded product
 Eg:OPEC(The Organization of the Petroleum Exporting
Countries )
 Types of competitive structure
3. Monopolistic Competition:
 Comparatively large no. of competition
 Has relatively small market share.

 Adopt differentiation strategy to capture the

market.(substitutes)
Eg: Restaurants,clothing
4. Pure competition:
 Large no. of seller
 Offer similar product
 Anybody can enter and go out from the market
 Eg:Agricultural products
Macro environmental factors
1. Demographic factors
 It deals with the study of the characteristics of
human population.
 Age
 Sex
 Growth
 Density
 Distribution
 Gender
 Marital status
 Demographic variables help in distinguishing
the consumer groups according to the
specific needs, wants and usage rates.
Macro environmental factors
2. Political Environment
 Government policies influence the marketing
decisions and strategies of a firm.
 Organization should closely monitor the
environment of the country.
 There can be 2 types of politics :
 Domestic politics : subsidy given to Tata’ nano car.
 International politics:rise of trade blocs:EU
Macro environmental factors
3. Economic Environment
 Economic condition of the country.
 Like income and purchasing power etc.
 PPP (purchasing power parity) helps in determining the
relative purchasing power of two country.
 Consumer buying trends reflect the general economic
condition. It includes :
5. Business cycle
6. Buying power
7. Financial sources
8. Willingness to spend
 Business cycle : life cycle of the business.
b) Growth stage :
 Employment rate is high
 Income is high
 Consumer spends more to fulfill the demand
 Consumer have lot of confidence on economy

Strategy of the company :

Expand the product offering
Increasing their distribution
Promotional budget
Set high price to the product
b) Recession Stage :
 Jobs are reducing consequently people spends
less money.
 Consumer buying decision depend on price.

Strategy of marketer :
Reduce the price of the product , for this reduces
the cost
c) Depression stage:
 Rate of unemployment is very high, wages are
low
 Customer lacks of confidence in the economy

d) Recovery stage :
 Company moves from recession or depression to
growth
 Unemployment rate begins to decline
 Purchasing power increasing
 Unwillingness to buy reduces
Life cycle of the Business

Recession

Growth or
prosperity Depression

Recovery
2. Buying power :
it depends on availability of financial sources
and the state of the economy.

3. Financial source:
can be 3 types:
 Income – Earned by us over fixed period of time

 Credit – Obtain by the banks and credit card

 Wealth – Generated through savings, gifts etc.

Macro environmental factors
4. Socio Cultural factors
It refers to attitudes, beliefs, norms, values
and lifestyle of individual in a society.
Macro environmental factors
5. Technology
 It is used to perform a task in effective and efficient
manner.
 Marketer should know the type of technology or R
& D used by a company.
 It impacts on product :
 Product – can be designed ( ATM, PC to Laptop)
 Price – reduce the cost of price
 Promotion- with buyers, distributors, people through e-mail and
other various of media.
 Advertising- can create a creative ad
 Distribution – online booking can be made
Macro environmental factors
6. Natural Factors
 We should maintain the ecological
balances.
 Components of nature are :
 Resources : company should use limited resources
and develop alternatives.
 Weather : according to the climate consumer’s
demand is changed.
3. Pollution : Individual are using recycle bags paper
bags instead of polythene bags.

4. Government intervention :

Government policies regarding the natural varies nation

to nation.
Macro environmental factors
7. Legal Factors
 Marketing activities greatly influences by the
legal activities of a particular country.
2. Consumer Protection act
3. State regulatory agencies
4. Non- government regulatory agencies :
e.g. IRDA