Marketing Environment
Dr.Sita Mishra
Learning Objectives
Describe the environmental forces that affect the
company’s ability to serve its customers.
Explain how changes in the demographic and
economic environments affect marketing
decisions.
Identify the major trends in the firm’s natural and
technological environments.
Explain the key changes in the political and
cultural environments.
Discuss how companies can react to the
marketing environment.
Marketing Environment
The marketing environment consists of actors
and forces outside the organization that affect
management’s ability to build and maintain
relationships with target customers.
Environment offers both opportunities and
threats.
Marketing intelligence and research used to
collect information about the environment.
Marketing Environment
Includes:
Microenvironment: actors close to the
company that affect its ability to serve its
customers.
Macro-environment: larger societal forces that
affect the microenvironment.
• Considered to be beyond the control of the
organization.
The Company’s Microenvironment
Company’s Internal Environment:
Areas inside a company.
Affects the marketing department’s
planning strategies.
All departments must “think consumer”
and work together to provide superior
customer value and satisfaction.
Actors in the Microenvironment
The Suppliers
Suppliers:
Provide resources needed to
produce goods and services.
Important link in the “value delivery
system.”
Most marketers treat suppliers like
partners.
Marketing Intermediaries:
Help the company to promote, sell, and
distribute its goods to final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
Customers
Customers:
Five types of markets that purchase a
company’s goods and services
Consumer market
Business market
Reseller market
Govt. market
International market
Competitors
Those who serve a target market with
products and services that are viewed by
consumers as being reasonable substitutes
Company must gain strategic advantage
against these organizations
Publics
Any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its
objectives.
The Macro-environment
The company and all of the other actors
operate in a larger macro-environment of
forces that shape opportunities and pose
threats to the company.
“ It
is useless to tell a river to stop running; the
best thing is to learn how to swim in the
direction it is flowing”
The Company’s Macro-
environment
Demographic Environment
Worldwide Population Growth
Population Age Mix
Literacy Level of Population
Household Patterns
Geographical Shifts in Population
Shift from Mass Market to Micromarket
Economic Environment
Income Distribution
Savings, Debt, &
Credit Availability
Natural Environment
Shortages of Raw Materials
Increased Pollution
Increased Government Intervention
Environmentally Sustainable Strategies
Technological Environment
Accelerating Pace Unlimited Opportunities
of Change for Innovation
Issues in the Technological
Environment
Varying Increased
R & D Budgets Regulation
Discussion Questions
Within the last ten years, which
technological force has had the greatest
impact on marketing? In what areas of
marketing has this impact been seen?
What technological force has impacted
you the most? In what ways has this
occurred?
Political-Legal Environment
Increase in business legislation
Protecting the welfare of consumers
Under Consumer Protection Act,1986, six rights of
the consumers are recognised:
Safety
Information
Choice
Representation
Redressal
Consumer education
Socio-Cultural Environment
The institutions and other forces that affect
a society’s basic values, perceptions,
preference, and behaviors.
Core beliefs and values are passed on
from parents to children and are
reinforced
•
by schools, churches, business,
and government.
Secondary beliefs and values are more
open to change.
Colgate-Palmolive’s Total Global
Branding Strategy
Colgate-Palmolive
has had global
success with its
Colgate line of
tooth-care products.
The products and
their packaging
design do not vary
from country to
country; the only
thing that changes
is the language on
the packages.
INDIAN MARKETING
ENVIRONMENT
Indian Population
In the new millennium (in May’2000) India’s
population has reached the billion mark –
only the second country to do so.
There are only four countries in the world that
have a population exceeding that of Uttar
Pradesh (157 million)
India adds roughly 18 million people, the
population of Australia, every year.
Indian Population : Age Structure Projection
(Percentage of total population)
Planning Commission Projection
Age Group Year 1997 Year 2002 Year 2007 Year 2012
Under 15 37.2 33.5 30.0 28.2
Years
15-59 Years 56.1 59.3 62.3 63.2
60 Years 6.7 7.2 7.7 8.6
and above
INDIAN MARKETING
ENVIRONMENT
Few Examples…………
How some of the industry leaders lost their
competitive advantage because they failed to
perceive the environmental changes….?
The decade of 1980s saw many of the
industry titans losing their competitive
advantage to relatively new entrants……..
(Contd..)
Few Examples…………
Hindustan Motors and Premier
Automobiles lost their pre-eminent
position in the Indian market to Maruti
Udyog’s Maruti 800.
Mahindra and Mahindra were shaken
up by Maruti Udyog’s Gypsy.
Titan watches heralded a new era of
watches and shook the giant HMT.
Hindustan UniLevers Surf was
cornered by Nirma.
Few Examples…………
Television giants like NELCO, Crown,
Weston, Salora, Bush etc. lost out to
absolutely new firms and brands like
LG and Samsung.
Videocon launched its washing
machine in1998 and suddenly
thereafter, one saw an explosion in the
market with about half-a-dozen brands.
An example of how External Forces Analysis
(PEST) can be translated to actionable marketing
strategies (Asian Airline Industry)
