Marketing Marketing EnvironmentEnvironment

EnvironmentEnvironmentMarketing is essential an externally focused

function of an organisation.Environment implies everything that is

external to the organisation.So with the change in the environment

outside there is change in the marketing activities of an organisation.

It is made of factors that are Controllable & uncontrollable

Characteristics of EnvironmentCharacteristics of EnvironmentComplex (change in one factor will affect

another)

Dynamic (Constantly changing in nature)

Multi-Faceted (viewed differently by different observer)

Far-Reaching

Marketing EnvironmentMarketing EnvironmentIt consist of all those internal & external

forces which affect the Marketing Strategies, policies, decision & operations of a company

Environment provide them continuous interaction b/w the customers & Business.

Based on the interaction the manager can evolve marketing strategies for effective & efficient Goal achievement.

Definition of MEDefinition of MEAcc to Philip Kotler:-

“Marketing Environment as the external factors & forces that affect a firm’s ability to develop & maintain successful transaction & relationship with the target customers.”

Nature of MENature of ME

There are some forces in the environment which influence on the Marketing Strategies.

I. Increased Competition:Heavy advertisement by competitor Introduction of new product by competitorPrice cut by a competitorII. Labour UnrestIII.Social ChangesIV.Technological ChangesV. Changes in Fashion

Components Of Marketing Environment

Controllable (Internal)

Uncontrollable (External)

Micro

Macro

Company

Acc. to Philip Kotler,In designing Marketing Plans, the marketing manager should take into confidence, the other departments working in the company such as:

Company Internal Environment

TopMgmt Finance Produ

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Purchasing

Marketing

INTERNAL ENVIEONMENT

EXTERNAL ENVIRONMENT

MACRO ENVIRONMENT

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Controllable or Internal METhe internal environment of a firm include

controllable factors or variables such as Product Design, Branding, packaging, pricing, advertising & distribution polices of the firm.

From these forces marketeer get adequate information about internal environment.

Firm’s marketing opportunity depends upon the availability of these controllable variables and the policy constituted on the basis of the controllable variables is known as MARKETING-MIX.

Uncontrollable or External METhe external Forces or Factors which

constitute Uncontrollable environment.Divided into two parts1.Micro Marketing Environment

2.Macro Marketing EnvironmentThese factors affect the marketing strategies,

polices, plan.

Micro Marketing EnvironmentIt is a company’s immediate

environment means those factors that are in its proximity.

These factors influence the company’s non-capability to produce & serve the market.

These are also group of people who affect the company’s prospects directly.

Micro Marketing Environment

CUSTOMERS

PUBLICS

COMPETITORS

INTERMEDIARIES

SUPPLIERS

COMAPNY

SuppliersSuppliersSuppliers are an important link in the

company’s overall customer value delivery system.

Suppliers problem can seriously affect marketing.

The company should develop specification, searching the potential suppliers, selecting the supplier (Quantity, Quality, Reliability, Credit facility, Warranty & low price.)

Impact on production, output & Cost.

Marketing IntermediariesMarketing IntermediariesIntermediaries also important for company’s

overall value delivery system.It helps the company to promote , sell &

distribute its product to final buyers.It may be individuals or firm or agencies.It include:1.Reseller2.Physical Distribution Firms3.Service Agencies4.Financial Intermediaries

CustomersCustomersIt belong to population who demand &

consume the company’s Product & services.

Customers

IndustrialCustomers

UltimateCustomers Reseller Govt.

CustomersForeign

Customers

CompetitorsCompetitorsAre individuals and firms who sell similar

goods & services in the same market.It is necessary to build an efficient system of

marketing.No single competitive marketing strategy is

best for all companies.Each firm should consider its own size &

industry position compared to those of its competitors.

PublicsPublicsAny group that has an actual or potential

interest in or impact on an organisation’s ability to achieve its objectives.

Publics

MediaPublics

FinancialPublics

Govt.Publics

Citizen ActionPublics

Internal Publics

LocalPublics

GeneralPublics

Company

Macro Marketing Environment

Legal Env.

EconomicEnv.

EcologicalEnv.Technological

Env.

Socio-Culture

Env.

ConsumerDemand

PoliticalEnv.

CompetitiveForce

DemographicsEnv.

Demographic EnvironmentDemographic EnvironmentIt include the detail about the poplution

structure, age-group, income group, gender, martial status, occupation & profession.

The study of the demographic features of the target market helps the marketeer to develop an understanding about prospective consumers & market potentials of a product & facilitates market segmentation.

Quantitative & Qualitative analysis of demographics features of target market helps the marketeer to determine the nature of

Cont’d…Cont’d…consumer demand.For the long term success, a marketeer must

communicate with his consumers, anticipate their problem, respond to their complaints & make sure that the firm is operating properly.

Economic EnvironmentEconomic EnvironmentIt mean the purchasing power & desire

to spend the income by the consumers, result in effective demand, which in turn, is influenced by economic conditions.

High economic growth assures higher level of employment & income, this leads to marketing boom.

Marketing environment is also influenced by many other economic factors like Interest rate, Money supply, price level, Consumer level.

Social-Culture EnvironmentSocial-Culture EnvironmentIt determines the value system of

the society which in turn affects the marketing environment.

Sociological factors are; Caste, Customs, Culture Heritage, Life Style, Social Values, Beliefs.

Culture differences are; Religion, Languages, Food Habits, Dress Codes, Festivals & Consumer’s Aspiration etc.

Cont’d….Cont’d….There are 3 main aspects of social

environment:1.Changes in our life style & social values.(Like; changing role of women, emphasis

on quality of goods instead of quantity of goods)

II.Major Social Problems.( concern for pollution, need for safety in

products, socially responsible Marketing)III.Growing Consumerism(Increase education level of consumer.)

Cont’d…Cont’d…People doesn’t expect faulty &

unsafe products, untruthful advertising, misleading & unsupported warranties, deceptive packages, short weight, fraudulent selling practices, unfair & exploitative price.

Political & Legal Political & Legal EnvironmentEnvironmentIt is also known as Public Policy

EnvironmentMarketing systems are affected by

government monetary & fiscal policies, import & export policies, custom duties, legislation controlling physical environment, anti-pollution laws etc.

There are many act to prevent monopoly & competition, to protect the consumer, to protect the society.

Cont’d…Cont’d…Like:MRTP Act(Monopolistic & restrictive trade

practices)Consumer protection Act

Technological EnvironmentTechnological EnvironmentChange in technology means change in

production & production possibilities, their manufacturing process, cost & qualities.

A new development may bring a new industry into existence or makes an existing profitable product.

New marketing opportunity like; digital watches, mobile phone, cable network, canned & frozen readymade food, computers, cosmetics etc from this much change in living standard of developed & developing countries.

Ecological EnvironmentEcological EnvironmentPhysical & geographical factors can play

an important role in constituting the non-economic environment.

Eg: air pollution, noise pollution & water pollution etc.

Proper attention should be paid to the economic & efficient utilization of the natural resources available in the country.

Steps taken to protect the environment:1.Checking the environment

consequences of the product.

Cont’d…Cont’d…II. Raise price to cover environmental

cost.III. Introduce the environmental

criteria while deciding the product ingredients, design & packaging.

IV. Develop ecologically superior products

Now, Government has introduced ”Eco Mark” for marketing eco-friendly products.

Competitive ForcesCompetitive ForcesIn the free market economy, it is not possible to

take any marketing decision without evaluating the existence of competition.

The marketing manager has little or no control over the actions of competitors.

Marketing strategy is itself a plan to fight against competition & to win in the battle of competition.

Manger should take care competitor's viewpoint towards the consumer, quality & characteristics of competitors products & their strategies.

Consumer DemandConsumer DemandIt is ever changing, unpredictableIt is also uncontrollable marketing

environment, which affect the overall marketing environment.

Manager must study the needs, taste & preferences of the consumer & also analyse their effects on the demand of the product.