Chapter 2Marketing•Environment

Indian Marketing Environment Today

• High Volatility in Indian Market

• Diversity & Convergence

• Catering to Affluent• Poor Markets also

need Marketing• Engaging customers

24X7• Consumer

Communities

• Enhancing Access• Price and value major

Determinants in Consumption Behavior

• New Icons, New Role Models

• Indian Global Brands• Ecological Sensitivity• Word of Mouth- a

strong influence on adoption

Hallmarks of Marketing Driven Companies

• Innovation• Quality of Products & Services• Global Competitiveness• Customer Centric product design• Product perceived as good value for

money• Opportunity for customer to

individualize the product

The Marketing Environment and Competitor Analysis

•SWOT analysis•PEST analysis•Five forces analysis

SWOT analysis• Strengths (internal)• Weaknesses (internal)• Opportunities (external)• Threats (external)

PEST analysis• Political factors• Economic factors• Socio-cultural factors• Technological factors

Political/legal• Monopolies legislation• Environmental protection laws• Taxation policy• Employment laws• Government policy• Legislation• Others?

Economic Factors• Inflation• Employment• Disposable income• Business cycles• Energy availability and cost• Others?

Sociocultural factors• Demographics• Distribution of income• Social mobility• Lifestyle changes• Consumerism• Levels of education• Others?

Technological• New discoveries and

innovations• Speed of technology transfer• Rates of obsolescence• Internet• Information technology• Others?

Source: Adapted from M. E. Porter, Competitive Strategy, Free Press, 1980, p. 4.

Threat ofsubstitutes

Potentialentrants

Threat ofentrants

Suppliers

Bargaining power

Substitutes

Buyers

Bargaining power

COMPETITIVE RIVALRY

Five forces analysis

Five Forces Analysis: Key Questions and Implications

• What are the key forces at work in the competitive environment?• Are there underlying forces driving competitive forces?• Will competitive forces change?• What are the strengths and weaknesses of competitors in relation to

the competitive forces?• Can competitive strategy influence competitive forces (eg by building

barriers to entry or reducing competitive rivalry)?

Objectives• Tracking & Identifying Opportunities

in the Macroenvironment• Demographic, Economic, Natural,

Technological, Political, & Cultural Developments

Macroenvironmental Forces• World trade enablers• Asian economic power• Rise of trade blocs• International monetary crises• Use of barter & countertrade• Move towards market economies• “Global” lifestyles

Macroenvironmental Forces• Opening of “new” markets• Emerging transnational firms• Cross-border strategic alliances• Regional ethnic & religious conflict• Global branding

Demographic Environment

Worldwide Population Growth

Population Age Mix

Ethnic Markets

Household Patterns

Educational Groups

Geographical Shifts in Population

Shift from Mass Market to Micromarkets

Economic Environment

Income DistributionSubsistence economies

Raw-material-exporting economies

Industrializing economies

Industrial economies

Savings, Debt, & Credit Availability

NaturalEnvironment

Higher PollutionLevels

Increased Costsof Energy

Shortage of Raw Materials

Changing Roleof Government

Accelerating Paceof Change

Unlimited Opportunitiesfor Innovation

IncreasedRegulation

Issues in the TechnologicalEnvironment

VaryingR & D Budgets

Political-Legal

Environment

IncreasedLegislation

Special-InterestGroups

Social/Cultural Environment

OfOrganizations

OfNature

OfOneself

OfSociety

Ofthe Universe

OfOthersViews

That ExpressValues

Social/Cultural Environment

Review• Tracking & Identifying Opportunities

in the Macroenvironment• Demographic, Economic, Natural,

Technological, Political, & Cultural Developments