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

Ethnic Markets

Educational Groups

Household Patterns

Geographical Shifts in Population

Shift from Mass Market to Micromarkets

 Economic Environment

Income Distribution
Subsistence economies
(few opportunities for marketers)
Raw-material-exporting economies
Industrializing economies
Industrial economies

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
 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 Levers 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
Onida and Videocon.
 Videocon launched its washing
machine in1998 and suddenly
thereafter, one saw an explosion in the
market with about half-a-dozen brands.