Marketing Environment

A. Demographic environment.
Marketers are much more interested to monitor the demographic environment, because population makeup the market. 1. World population growth : The world population explosion has been a source of major concern, for two reasons. The first is the fact that certain resources needed to support this much human life ( fuel, foods and minerals ) are limited and may run out at some point. nchecked population growth and consumption would eventually result in insufficient food supply, depletion of key material, over crowding, pollution and an overall deterioration in the !uality of life. "econd cause for concern is that population growth is highest in some countries and communities that can least afford it. #n the developing countries, the death rate has been falling as a result of modern medicine, but birth rate remained fairly stable. $eeding, clothing and educating of their children while also providing a rising standard of living is nearly impossible in these countries. 2. Population age mix : %ational populations vary in their age mix. &t one extreme is Mexico, a country with a very young population and rapid population growth. &t the other extreme is 'apan, a country with one of the world(s oldest populations. #n Mexico milk, diaper, school supplies and toys would be the important products. )ut in 'apan most of the population consume many more adult products. "o, the marketers have to create separate products and services for different countries and have to choose different price, distribution and promotional strategies for them. 3. Ethnic market : *ountries also vary in ethnic and racial makeup. &t one extreme is 'apan, where almost every one is 'apanese. )ut on the other extreme is nited "tates, where virtually people came from all nations. +ach group has certain specific wants and buying habits. "everal food, clothing and furniture companies have directed their products and promotions to one or more of these groups. . Education group! : The population in any society falls into five groups, illiterate, high school dropouts, high school degree, college degree and professional degrees. The marketers have to observe the si,e of each groups in a society and according to their si,e they have to design their production plan for different products and services. ". #ou!ehold pattern! : The traditional household consists of a husband, wife and children. )ut in some other societies we observed that their household patterns are nontraditional including single live alones, adult live . togethers, single parent families, childless married couple and so on. "ingle or separated families needed smaller apartment, inexpensive and smaller appliances, furniture and small si,e food packets. "o, the marketers have to consider to the household patterns of the different societies. $. %eographical !hi&t! in population : /opulation movement from one country to another or from rural to urban areas. 0ocation makes a difference in goods and service preferences. Those who lived in large cities their most of the purchase are expensive furniture, perfumes, cloths and so on. "uburbanites buy home workshop e!uipment, outdoor furniture and outdoor coking e!uipments etc. "o, the marketers have to consider to the geographic shifts in population. '. (hi&t &rom a ma!! market to micro ) market! : The effect of all these changes is fragmentation of the mass market into numerous micro - markets differentiated by age, sex, ethnic background, education, geography, lifestyle and

other characteristics. +ach group has strong preferences and marketer has to reached the customer through increasingly targeted communication and distribution channels. Marketers are increasingly design their products and services and selected their marketing programs for specific - micro markets.

*. Economic environment.
1ithout the purchasing power, consumers are not able to fulfill their needs and wants properly. The available purchasing power in an economy depends on current income, price, savings, debt and credit availability. Marketers pay close attention to major trends in income and consumer spending patterns. 1. +ncome di!tri,ution : %ations economic condition mostly depend on the level and distribution of income and industrial structure. There are four types of industrial structures are observed in the national economy. -a. (u,!i!tence economie! : #n a subsistence economy, the vast majority of people engage in simple agriculture, consume most of their output and barter the rest outputs for simple other goods and services. These economies offer few opportunities for the marketers. -,. /aw material exporting economie! : These economies are rich in one or more natural resources but poor in other respects. Much of their revenue comes from exporting these resources. $or example, 2aire and "audi &rabia has copper and oil resources and they export them in the international market. These countries are good markets for extractive e!uipment, tools and supplies, materials handling e!uipments and trucks. 3epending on the number of foreign residents and wealth or rich rulers and landholders, they are also a good market for western - style commodities and luxury goods. -c. +ndu!triali0ing economie! : #n an industriali,ing economy, manufacturing begins initially to account for 45 percent to 65 percent of gross domestic product. #ndustriali,ing economies countries are #ndia, +gypt, /hilippines, Malaysia and so on. &s manufacturing increases, the country depends more on imports of raw materials, steels and heavy machinery and less on imports of finished textiles, paper products and processed foods. #ndustriali,ation creates a new rich class and a small but growing middle class, both demanding new types of goods and services. -d. +ndu!trial economie! : #ndustrial economies are major exporters of manufactured goods and investment funds. They buy manufactured goods and export them to other types of economies in exchange for raw materials and semifinished goods. The large and variety of manufacturing activities of these nations and their si,able middle class make them rich markets for all sorts of goods. 2. (aving1 de,t! and credit availa,ilit2 : *onsumers expenditures are affected by consumer saving, debt and credit availability. *onsumers saving habit increase the amount of deposits, which is helpful for banks to reduce the bank interest rate and increase the loan availability. &ccess to lower interest rate helps the companies to expand faster. 1hen credit facilities are available then consumers can purchase many goods and services, otherwise these are not possible at present. Marketers must pay careful attention to major changes in income, cost of living, interest rate, savings and borrowing patterns because they can have a high impact on business, specially for companies whose products have high income and price sensitive.

3. 4atural environment.

4. 6. 8. 9.

"hortage of raw materials 7 #ncreased energy cost 7 #ncreased pollution levels 7 *hanging role of governments 7

D. 5echnological environment.
:ne of the most dramatic forces makes rapid changes of human life is technology. The economy(s growth rate is affected by the discoveries of new major innovated technologies. The marketers are monitoring the new innovation and trend of technology. 1. Accelerating pace o& technological change : Many of today(s common products were not available 95 years ago. /eople of that time were did not know personal computers, digital wristwatches, video recorders, mobile phones and fax machines. The advent of personal computers and fax machines has made it possible for people to telecommunicate the others that is, work at home instead of traveling to offices that may be takes 85 minutes or more. "ome people hope that this trend of technology will reduce auto pollution, healthy society, bring the family close together and create more home centered entertainment and activities. #t will also have substantial impact on shopping behaviour and marketing performance. 2. 6nlimited opportunitie! &or innovation : "cientists are working on a startling range of new technologies that will revolutioni,e products and production process. "ome of the most exciting work is being done in solid - state electronics, biotechnology, robotics and material sciences. ;esearchers are working on &#3" cures, happiness pills, painkillers and nonfattening foods. They are designing efficient robots for firefighting, underwater exploration and home nursing. #n addition scientists are also working on fantasy products, such as small flying cars, three - dimensional television and space colonies. The challenge in each case is not only technical but also commercial . to develop affordable versions of these products. 3. 7ar2ing re!earch and development ,udget! : The nited "tates annual research and development expenditures are highest in the world, nearly <5 percent of these funds are still earmarked for defense. 'apan has increased its research and development expenditures much faster than the nited "tates and is spending mostly on nondefense related research in physics, biophysics, biochemistries, material science, geography and computer science. Many companies are content to put their money into copying competitors( products and making minor feature and style improvements. "o, new innovation of technology depends upon the nature of research work and on the amount of budgets allocated for research and development works. . +ncrea!ed regulation o& technological change : &s products become more complex, the public needs to be assured of their safety and security. *onse!uently, government agencies( powers to investigate and ban potentially unsafe products have been expanded. "afety and health regulations have also increased in the area of food, automobiles, clothing, electrical appliances, medical sciences and construction. Marketers must be aware of these regulations when proposing, developing and lunching new products in the markets.

E. Political legal environment.

4. 0egislation regulating business 7 6. =rowth of special - interest groups 7

8. (ocial cultural ) environment.

4. >igh persistence of core cultural values 7

6. +xistence of subcultures 7 8. "hifts of secondary cultural values through time 7