The Marketing Environment

Prasad T S MBA (PT) II Sem SMS, CUSAT

Marketing
"the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. -AMA

Marketing Environment
Marketing Environment: The actors and forces influencing the companys ability to build and maintain successful relationships with target market & customers Microenvironment Includes the actors close to the company Macroenvironment Involves larger societal forces that affect the whole microenvironment

The Marketing Environment

Demographic
Company

Cultural
Publics

Economic
Suppliers

Company Customers Natural Political Competitors

Intermediaries

Technological

The Microenvironment
Company

Publics

Forces Affecting a Companys Ability to Serve Customers

Suppliers

Competitors Customers

Intermediaries

Microenvironment
Actors
1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics
Marketing must consider other parts of the organization including finance, R&D, purchasing, operations and accounting Marketing decisions must relate to broader company goals and strategies

Microenvironment
Actors
1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics
Marketers must watch supply availability and pricing Effective partnership relationship management with suppliers is essential

Microenvironment
Actors
1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics
Help to promote, sell and distribute goods to final buyers Include resellers, physical distribution firms, marketing services agencies and financial intermediaries Effective partner relationship management is essential

Microenvironment
Actors
1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics
The five types of customer markets Consumer Business Reseller Government International

Microenvironment
Actors
1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics
Conducting competitor analysis is critical for success of the firm A marketer must monitor its competitors offerings to create strategic advantage

Microenvironment
Actors
1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics
A group that has an actual or potential interest in or impact on an organization Seven publics include: Financial Media Government Citizen-action Local General Internal

The Macroenvironment
Macroenvironmental Forces
Demographic Economic Natural Technological Political Cultural

The Macroenvironment
Demographic Cultural
Forces that Shape Opportunities and Pose Threats to a Company

Economic

Political Technological

Natural

Demographic Environment
Demographic Environment:
The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics

Indian Demographic Environment

Changing age structure of the population is the single most important demographic trend Estimated 1.21 billion people live in India, that makes India 2nd most populous country in the world 68.8% of the population lives in rural areas, that trend is slowly changing due to migration to urban area, which is largely due to rapid urbanization

 Indias largest urban agglomerate are Mumbai, Chennai, Kolkata, Delhi, Hyderabad & Bangalore. One of the largest middle class in the world, with rising income. Has one of the largest & youngest populations in the world with very high aspiration The total urban population in the country as per Census 2011 is more than 377 mn constituting 31.16% of the total population.

 Population of children in the age group (06) is 158.8 million in Census 2011. In comparison to Census2001, the number of children in urban areas has increased by 10.32%, while in the rural areas it has decreased by 7.04%. Sex ratio (the number of females per thousand males) is 940 (947/926 inRA/UA). Child Sex Ratio is 914 (919/902 in RA/UA) The Literacy Rate is 74.04. (In RA the LR is 68.91 and in UAit is 84.98)

 Young group attracted competitors in the area of motor bikes, readymade garments, mobile phones, soft drinks, fast food chains, Liquor 50% population is woman and their traditional roles have also changed, most women are self-confident and also educated and empowered. This shift has resulted in a whole range of new products like ready to cook, ready mixes, cooking range, washing machine, vacuum cleaner. More egalitarian relationship between husband & wife & also a move toward more shared decision making pattern between parents & children. Despite these changes the fact remains that most people continue to give more priority to the families & families continue to maintain strong kinship, bonds & ties. Examples : ads of washing machines, masalas, Cars , Wasing powders, insurance companies are giving total picture of family & love 3 - 17

How have companies responded to the changing environment

Demographic Environment US Scenario Key Generations

Baby Boomers Generation X Generation Y
Born between 1946 and 1964 Represent 28% of the population; earn 50% of personal income Many mini-segments exist within the boomer group Entering peak earning years as they mature

Demographic Environment US Scenario Key Generations

Baby Boomers Generation X Generation Y
Born between 1965 and 1976 First latchkey children Maintain a cautious economic outlook Respond to socially responsible companies Will be primary buyers of most goods by 2010

Demographic Environment US Scenario Key Generations

Baby Boomers Generation X Generation Y
Born between 1977 and 1994 72 million strong; almost as large a group as their baby boomer parents New products, services, and media cater to GenY Challenging target for marketers

factors that affect consumers buying power and patterns. 1. GNP/GDP 2. Per capita income. 3. Balance of payments position. 4. Industry life cycle and current phase through which the industry is passing .The different phases of this life cycle could be classified as recovery, boom, recession and depression. 5. Trends in the prices of goods and services specifically , whether the inflationary or deflationary trends are visible. 6. Fiscal policies and prime rate of interest charged by commercial banks.

Economic Environment

The economic environment is characterized by more consumer concern for value in shifting consumer spending patterns. Today's squeezed consumers are seeking greater value -- just the right combination of good quality and service at a fair price. The distribution of income also is shifting. The rich have grown richer, the middle class has shrunk, and the poor have remained for, leading to a two-tiered market. Many companies now tailor their marketing offers to two different markets-- the affluent and the less affluent.

Economic Environment

Natural Environment
Natural Environment:
Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities

Trends
Shortages of raw materials Increased pollution Increased government intervention

Technological Environment
The most dramatic force shaping our destiny Rapidly changing force which creates many new marketing opportunities but also turns many existing products extinct

Political Environment
Consists of laws, government agencies and pressure groups that influence or limit various organizations and individuals in a given society

Legislation affecting businesses worldwide has increased Laws protect companies, consumers and the interests of society Increased emphasis on socially responsible actions

Cause-Related Marketing
Marketers create link between brand and charitable organization Demonstrates social responsibility Helps build positive brand image Examples include General Mills Box Tops for Education, Tang and Mothers Against Drunk Driving, Eddie Bauer and local schools

Cultural Environment
Made up of institutions and other forces that affect a societys basic values, perceptions, preferences and behaviors.

Cultural Environment Marketing Management Includes peoples views of

Themselves
Identify with brands for selfexpression

Society
Patriotism on the rise

Others
Recent shift from me to we society

Nature
lifestyles of health and sustainability (LOHAS) consumer segment

Organizations
Trend of decline in trust and loyalty to companies

Universe
Includes religion and spirituality

Responding to the Marketing Environment

There are three kinds of companies: those who make things happen, those who watch things happen, and those who wonder whats happened.

Thank You