MARKETING

ENVIRONMENT

ENVIRONMENT

• Actors & forces outside marketing that affects marketing management’s ability to build and maintain successful relationship with target customer

• Marketing research & marketing intelligence• Microenvironment • Macroenvironment

MICROENVIRONMENT

• Actors close to the company that affects its ability to serve its customers – company, supplier, marketing intermediaries, customer markets, competitors, publics

• Creating customer value and satisfaction to build relationship with customers

MARKETING

COMPANY

SUPPLIER

INTERMEDIARY

CUSTOMER

COMPETITORS

PUBLICS

COMPANY

• Other company groups/ departments– Top management– Finance,– Research & development– Purchasing– Operations– Accounting

• Marketing managers make decision within strategies & plans made by top management

• All must think “customer” & work in harmony

SUPPLIERS

• An important link in customer value delivery system• Provide resources for its products & services• To watch supply availability – any problems can

seriously affect marketers– Supply shortage– Labour problems– Price trends of key inputs

• Walmart – suppliers – “a tough & demanding customer but helps you get there”

MARKETING INTERMEDIARIES

• Help company promote sell and distribute its products to final buyers.– Resellers– Physical distributors– Marketing service firms– Financial intermediaries– Wholesalers/retailers

• Examples –walmart, malls & other departmental stores• Coca- cola as exclusive beverage provider to many

companies

CUSTOMERS

• Five types of customers markets• Consumer markets• Business markets• Relseller market• Government market• International market

COMPETITORS

• Provide greater customer value and satisfaction that its competitors

• More than simply adapt the needs of target customers

• Strong positioning – in the minds of people• No single strategy best for all companies

PUBLICS

• Any group that has actual or potential interest in or impact on organisation’s ability to achieve the objectives

• Financial publics- banks, investment firms, stockholders• Media publics- • Government publics- • Citizen action publics• Local publics• General publics• Internal publics

MACROENVIRONMENT

• Consists of larger societal forces that affect the macroenvironment – – demographic, – economical, – natural, – technological, – political and – cultural forces

Macro-Environment Forces (DENTPC)

• The macro - environment of any business consists basically of six factors:

• Demographic Environment population- people make up the markets.

• keenly interested in the size and growth rate of population in – different cities, – regions and – nations, – age distribution and – ethnic mix.

WORLD POPULATION

• INTERNATIONAL SCENARIO- population explosion; India will overtake China by 2025 as most populous

• If world be a village of 1000 people- – 520 men & 480 women– 330 children, 60 above 65yrs,– 10 college graduates, 335 illiterate adults– 52 North Americans, 55 Russians, 84 Latin Americans, 95

Europeans, 124 Africans, 584 Asians– 165 speak Mandarin, 86 English, 83 Hindi/ Urdu, 64 Spanish, 58

Russians, 37 Arabic, rest one of over 200 languages– 329 Christians, 178 Muslims, 132 Hindus, 62 Buddhists, 3 Jews,

167 non religious, 45 atheists and 86 others

LITERACY LEVELS

• Definition- above 15 yrs and able to read & write

• In India- 70% males & 48% females are literate• 52% population male; 13% illiterate, 23.8%

literate but non matriculate, 11.5% literate but non graduate. 3.4% graduate and above

• Literacy levels vary according to age– 15-24= 76%; declines with age

US

• BABY BOOMERS- 78 millions (300 millions) – 27.5%; 1946-64; 2.1 trillion $; 75% national assets; 40% national disposable income by 2029 (65yrs age); all walks of life; 25% ethnic minority

• GEN X- in shadow of BBs; no characteristics; Baby busters; latchkey kids; divorcee & employed mothers; more cautious economic outook; more skeptical; MTV generation;

• GEN Y-echo boomers; 1977-94; children of BBs; 76 m: 160 b $ spending; techno geeks:

CHINA

• One child norm- little emperor/ little empress; six pocket syndrome; rapidly aging population; 75% childless homes

• GENERATIONAL MARKETING- Separate products and marketing programme for each generation ?

• CHANGING FAMILY – nuclear family; one income one car two children family ; two incomes two car one child family– More people divorcing– Live in partners– Late marriage– No issue

• Non traditional households – special care

KOOL GENERATION

• Status symbol – mobile phones• Levi’s – streetwear – Sykes• Titan- “eye gear” – Fastrack• Sony Ericsson – 3D gaming mobile• Scooters – mobikes • MTV/ channel V• Hinglish • Youth culture – Valentine Day/ Friendship Day

GEOGRAPHICAL SHIFTS

• Great migratory movements-population shift• Metro cities• Rural to urban (micropolitan areas beyond

metropolitan cities)• Telecommute• Telebusiness• SOHO (small office / home office)

• A better educated, more white collar, more professional population

• Increasing diversity• Gay & Lesbian community• Disabled community

Economic Environment• GDP/ Per Capita GDP/ PPP/ Per Capita income/ Growth of economy/

FE reserves/Inflation/ Stock Market/ demographic indicators• available purchasing power in an economy, which depends on the

– current prices, – savings, – debt and – credit availability.

• pay close attention to the major trends in income and consumer spending patterns.

• Changes in Income/ Income distribution• Changing consumer spending patterns• Economic forecasting

NCAER STUDY (2002)

(1996 & 2006) (figures in millions)

• 5 GROUPS OF HOUSEHOLDS– Destitutes (<16000 pa) (33/ 190.4 (16.5 / 95)

– Aspirants (<22000 pa) (44/ 254 (20.2/117)

– Climbers (<45000 pa) (54.1/312.2 (81.7/472)

– Consuming class (<2,15000 pa) (32.5/186(75.5/432)

– Rich (own money and wide range of products) (1.2/ 7(5.2/ 30)

• CHANGING CONSUMPTION PATTERN- scooters/ M800 car

CHANGING PATTERNS1999 v/s 2003 (%)

GROCERY 44 41

SAVINGS 14 4

EATING OUT 8 10.8

PERSONAL CARE 6 7.6

CONSUMER DURABLES 6 7

CLOTHINGS 5 7

BOOKS & MUSICOTHERS

5remaining

7.6

PHILOSOPHY OF EARN NOW AND SPEND LATER

EARN NOW AND SPEND NOW

STUDY

• RESEARCH INTERNATIONAL 2002- significant regional differences in values/ attitudes/ preferences of women – 4 clusters

• Traditionalism and self sacrifice to westernisation and individualism

• Based on shopping habits- categories of women– “Liberated youngsters” (13%)– “Modern mums” (18%)– “Behind the times” (20%)– “Rebellious youngsters (22%)– “Orthodox mothers (27%)

Natural Environment

• be aware of the threats and opportunities associated with the four trends – the shortage of raw material,– the increased cost of energy, – the increased levels of pollution(environmentally

sustainable business), and – the changing role of the governments.

GREEN MARKETING

• OBSTACLES • Over exposure & lack of credibility• Consumer behaviour• Poor implementation

Technological Environment

• One of the most dramatic forces shaping people’s lives. a force for "creative destruction.“

• Wonders or blunders• New technologies that provide superior value in

satisfying needs stimulate investment and economic activity.

• In the meantime minor innovations fill the gap, involve less risk ; too much research effort is going into producing minor improvements rather than major breakthroughs.

•

• New technology creates major long-run consequences that are not always foreseeable.

• RFID –smart chips• Practical, affordable and safe• Accelerating pace of change• unlimited opportunities for innovation• Greater emphasis on R&D• Increased regulations of technological change

EXAMPLES

• RAYMOND LTD. – – fabrics made from exotic fibres. – Tancel, natural fibre from woodpulp; blended with wool-

greater softness and drape; – Casein, a fibre made from milk protein - a butterfly feel; – Bamboo & Soyabean fibres for softness & resilience

• SAMSUNG- Digital Home Business• VIRTUAL REALITY (VR) – 3 D computer generated

environment (sight, hear & touch) – automobile, kitchen , exterior home design

Political / Legal Environment

• Marketing decisions are strongly affected by the developments in the political and legal environment.

• that influence and limit various organisations and individuals. – laws, – government agencies and – pressure groups

BUSINESS LEGISLATION

• PURPOSE - To charge businesses with social costs created by their products or production processes– To protect businesses from unfair competition– To protect consumers from unfair business

practices– To protect society form unbridled business

behaviour

Social Environment

• The society in which people grow shapes their beliefs, values and norms.

• People absorb, almost unconsciously, a wide view that defines their relationship with themselves, others, nature and the universe.

• Socially responsible• Cause related marketing- one rupee on each

notebook sold to CRY; paperless accounts statements;

• Do well by doing good

Cultural environment

• Persistence of cultural values• Shift in secondary cultural values• People’s views

– People’s view of themselves- “Do It Yourself” “Adventurers”– People’s view of others- “cocooning” “Digital Age”– People’s view of organisation- “work for money” “scams”,

“economic downturn”– People’s view of society- “patriotism”– People’s view of Nature – “LOHAS” market- everything natural

(green)– People’s view of Universe-”religion”, “spiritualism”

REACTING TO ENVIRONMENT

• 3 TYPES OF COMPANIES– Those who make things happen– Those who watch things happen– Those who wonder what has happened

• View the environment as uncontrollable to which to react and adapt-avoid threat and take advantage of opportunities

• Proactive stance – firm aggressive action• Cannot always control environment forces – shifting

population/ economic environment/ major cultural shift; but taking proactive steps is in our hands