Marketing Environment - Class 15

8/10/2019 Marketing Environment - Class 15

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MARKETING ENVIRONMENTMARKETING ENVIRONMENT

Dr M Manjunath Shettigar MA (con), MBA, MPhil, PhD


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It is useless to tell a river to stopIt is useless to tell a river to stop

running; the best thing is to learnrunning; the best thing is to learnhow to swim in the direction it ishow to swim in the direction it is

flowing.flowing.-Anonymous-Anonymous


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Purpose of environmental analysis

1. An understanding of macro and micro marketingenvironment forces is essential for planning.2. Helps a business to compete more effectively

against its rivals.3. Assists in the identification of opportunities and

threats.4. Enables an organization to take advantage of

emerging strategic opportunities.


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Marketing environment refers to thelarger context in which marketingexercise of the company is managed. It

includes: Microenvironment: factors & forces in the

immediate environment which affect thecompanys ability to serve its customers.

Macro environment: larger societal forcesthat affect the microenvironment.

onsidered to be beyond the control of theorgani!ation.

MarketingMarke

ting nvironmentnvironment


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Actors in theActors in theMicroenvironmentMicroenvironment


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Conditions with in the frm/ companyconstitutes the internal environment othe company, over which it has control

Marketing must consider other parts of the organi!ationincluding finance" #&$" purchasing" operations andaccounting

Marketing decisions must relate to broader companygoals and strategies

MicroenvironmentMicroenvironment1. h e c o m p a n y


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The Company

!arketing managers must "ork "ith alldepartments of a company

All #epartments have an impact on themarketing department$s plans and actions

%&hink 'ustomer(


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Provide resourcesneeded to producegoods and services.

Important link in the%value deliverysystem.

Most marketers treatsuppliers like partners.

!uppliers"! uppliers"


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Marketing IntermediariesMarket ing Intermediaries

!arketing intermediaries help the company promote) sell) and distribute its goods to the final buyers

&hey are middlemen *"holesalers) retailers) agents+)distributing agencies) market service agencies) etc.


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5 Types of Customers5 T ypes of Customers

1. 'onsumer markets

2. ,usiness markets *, to ,+3. -eseller markets4. overnment markets/. 0nternational markets


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CompetitorsCompetitors

&o be successful) a company must satisfyneeds and "ants of consumers better than

competitorsA company should monitor three variables"hen analyzing each of its competitors

hare of !arket hare of !ind hare of Heart


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#ompetitors$#om petitors$

!ust understand competitor$s strengths!ust differentiate firm$s products andofferings from those of competitors'ompetitive strategies should emphasizefirm$s distinctive competitive advantage inmarketplace


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%ypes of &ublics%ypes of &ublics


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%he #ompany's Macro environment%he #ompany's Macro environment


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Demographic EnvironmentDemographic Environment

#emography is the study of human populations interms of size) density) location) age structure)

gender) race) occupation) and other statistics

#emographics change over time and companiesmust keep up "ith them


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Economic EnvironmentEconomic Environment

'hanges in 0ncome 1 $s consumption

frenzy 2 $s %s5ueezed

consumer( 2 1 $s value marketing

0ncome #istribution 6pper class !iddle class 7orking class 6nderclass

Consists of factors that a ect consumerpurchasing power and spending

patterns.


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Global EconomicDevelopment

Global EconomicDevelopment

Changes in IncomeChanges in Income

Changing ConsumerSpending Patterns

Changing ConsumerSpending Patterns

e!Economic

Concerns for"ar#eters

e!Economic

Concerns for"ar#eters

conomic nvironmentconomic nvironment


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(Economic FactorsEconomic Factors*a+ ross national product.*b+ 8er capita income.*c+ ,alance of payments position.*d+ 0ndustry life cycle and current phase through "hich

the industry is passing. &he different phases of thislife cycle could be classified as recovery) boom)recession and depression.

*e+ &rends in the prices of goods and services9 specifically) "hether the inflationary or deflationarytrends are visible.

*f+ :iscal policies and prime rate of interest charged bycommercial banks.


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Natural Environment Natural Environment

0nvolves the naturalresources that are

needed as inputs bymarketers or that areaffected by marketing

activities .


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)atural)atural

nvironmentnvironment

)atural)atural

nvironmentnvironmentConservationOf ResourcesConservationOf Resources

EcotourismEcotourism

Recyc e andReduce !asteRecyc e and

Reduce !aste

Factors Affectingthe

"aturaEnvironment

Factors Affectingthe

"aturaEnvironment


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"atura Environment"atura Environment

;atural Environment< 0nvolves the natural resources that are needed

as inputs by marketers or that are affected bymarketing activities

&rends

hortages of ra" materials 0ncreased pollution 0ncreased government intervention


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%echnological nvironment%echnological nvironment

!ost dramaticforce no"shaping ourdestiny.


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Techno ogica ForcesTech no ogica Forces

hanges in technology maymake business obsolete' e.g." Pagers (mobile phones) * P" * # ( $s" $*$s) Postal services (fax machine'

Internet)

+ew opportunities,e.g."specialty online retailers"mass customi!ation


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Cu tura EnvironmentCu tura Environment

&he institutionsand other forcesthat affect asociety$s basicvalues) perceptions)

preference) and behaviors.


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Marketing ManagementMarketing Management

ThemselvesIdentify withbrands for self-expression

OthersRecent shift fromme to wesociety

OrganizationsTrend of decline intrust and loyalty tocompanies

ociety!atriotism on therise "#$

%aturelifestyles of healthand sustainability"&O'( $ consumersegment

)niverseIncludes religionand spirituality

*ultural +nvironment Includespeople,s views of


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Increasing$egislation

Increasing$egislation

ChangingGovernment

%genc!Enforcement

ChangingGovernment

%genc!Enforcement

cludes $aws& Government %gencies& Etc. that In'uenc( $imit )rgani*ations+ Individuals in a given societ!

c ludes $aws& Government %gencies& Etc. that In'uence( $imit )rgani*ations+ Individuals in a given societ!

IncreasedEmphasis on

Ethics (Sociall!

,esponsible%ctions

IncreasedEmphasis on

Ethics (Sociall!

,esponsible%ctions

#o itica Environment#o itica Environment


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&olitical %rends&olitical %rends

0ncreased legislation and regulationaffecting business

'hanging government Agency Enforcement

0ncreased emphasis on socially responsibleactions and ethics


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*egal and +egulatory*egal and +egulatory

nvironmentnvironment-aws and #egulations for safety

for consumer protection to protect special interests

$angers of litigation anyone can sue"and delay/derail business plans0

1xamples: 2ntitrust I in India

3air competitionPricing


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The Marketing Environment andThe Marketi ng Environment and

Competitor Ana ysisCom petitor Ana ysis

7=& analysis8E & analysis

:ive forces analysis


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$!OT ana ysis$!OT ana ysistrengths *internal+

7eaknesses *internal+=pportunities *e>ternal+&hreats *e>ternal+


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#E$T ana ysis#E$T ana ysis8olitical?legal factors

Economic factorsocio@cultural factors

&echnological factors


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#o itica % ega#o itica % ega!onopolies?competition legislationsEnvironmental protection la"s&a>ation policyEmployment la"s

overnment policyegislation

=thers


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Economic FactorsEconomic Factors0nflation

Employment#isposable income,usiness cyclesEnergy availability and cost=thers


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$ociocu tura factors$ociocu tura factors#emographics#istribution of income

ocial mobilityifestyle changes

'onsumerismevels of education

=thers


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Techno ogicaTech no ogica

;e" discoveries and innovations

peed of technology transfer -ates of obsolescence0nternet0nformation technology=thersB


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,ive forces analysis,ive forces anal ysis

:ive forces model is a environment analysis tooldeveloped by famous trategy uru MichaelPorter

&he / forces he speaks about are

Marketing Environment - Class 15

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