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MARKETING

ENVIRONMENT

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THE COMPANY¶S MARKETING

ENVIRONMENT

Company

Suppliers Distributors

& Dealers

Customers

Competitors

Public

The

Economy

Demography

Political &

Legal

Technology

Cultural

Factors

Social

Factors

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THE COMPANY¶S MARKETING

ENVIRONMENT

� All Companies operate within a marketing

environment. This environment consists of all

the factors and forces that affect the company¶sability to transact effectively with its target

market.

� This environment can be divided into :

(A) Micro-environment

(B) Macro-environment

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(A) MICRO-ENVIRONMENT

� The microenvironment consists of the forcesclose to the company that affects its ability toserve its customers. It consists of followingcomponents :

(i) Company¶s internal environment(Company¶s other departments)

(ii) Suppliers

(iii) Marketing Intermediaries(iv) Customers

(v) Competitors

(vi) Publics

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MICRO-ENVIRONMENT

Suppliers

Company

Competitors

Marketing

IntermediariesCustomers

Publics

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(ii) SUPPLIERS

� Suppliers are an important link in thecompany¶s overall customer ³value deliverysystem´.

� They provide the resources needed by the

company to provide its goods and services.� Supplier developments can easily affect

marketing.

� Marketing managers must watch supply

availability and must also monitor the pricetrends of their key inputs.(Rising supply costsmay force price increases that can harm thecompany¶s sales volume).

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(iii) MARKETING

INTERMEDIARIES� Marketing intermediaries are firms that

aid the company in promoting, selling,

and distributing its goods to the finalbuyers.

� They include middlemen, physicaldistribution firms, marketing serviceagencies and financial intermediaries.

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MARKETING

INTERMEDIARIES Middlemen- are business firms that help the

company in finding customers and/or close

sales with them. Middlemen are of two types :� Agent Middlemen ± find customers and

negotiate contracts but do not take title tomerchandize, e.g. brokers, representatives.

� Merchant Middlemen ± Buy, take title to thegoods, and resell merchandize, e.g. wholesalers,retailers etc.

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MARKETING

INTERMEDIARIES

 Physical Di str ibut ion Fi r ms - Assist

the co. in stocking and moving goodsfrom their original locations to their

destinations,e.g. ware housing firms,

transportation firms.

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MARKETING

INTERMEDIARIES

Financial Int er mediar ies ± Help

finance transactions or insure against therisks associated with the buying and

selling of goods, e.g. banks, credit

companies, insurance companies etc.

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(iv) CUSTOMERS /

MARKETS.

CompanyConsumer

Market

Business

Market

Reseller

MarketGovt.

Market

International

Market

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(v) COMPETITORS� To be successful, a company must provide

greater customer value and satisfaction than its

competitors (Marketing Concept).� Marketers must do more than simply adapt to

the needs of target customers. They also must

gain strategic advantage by positioning their

offerings strongly against competitors¶

offerings in the minds of consumers.

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COMPETITORS

� Four basic competitions faced by acompany :

Company

Perfectcompetition

monopolistic

CompetitionOligo poly

monopolyCo

mpetition

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CHARECTERI

STICS

PERFECT MONOPOLIST

IC

OLIOPOLISTI

C

MONOPOLY

 Number of 

competitors

MANY FEW TO MANY VERY FEW NO DIRECT

COMPETITER 

Similarity of 

goods/ser vices 

off ered by 

competing f irms

SAME Seemingly 

diff erent  but may 

 be quite similar 

Similar or  

diff erent

 No directly 

competing

 pr oducts

Individual f irm's 

contr ol over   price

 None (set  by the 

market)

Some Some REGULATED

BY GOVT

Examples WATER  

PACKET

AGR I

PR ODUCT

SHAMPOO

OIL

AIR OPLANE

AUTOMOBOIL

RAILWAY

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(vi) PUBLICS� Any group that has an actual or potential

interest in or impact on an organization¶s

ability to achieve its objectives.

Co.Financial

Public

MediaPublic

Govt.

Public

Citizen

Action

Public Local

Public

GeneralPublic

Internal

Public

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PUBLICS� Financial Publics (Banks, investment houses

and stock holders)

� Media Publics (Newspapers, magazines, andradio & T.V. stations)

� Govt. Publics (Rules & regulations related tosafety, truth in advertising and other matters)

� Citizen-action Publics (Consumerorganizations, environmental groups, minoritygroups etc.)

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PUBLICS� Local Publics (Neighborhood residents

and community organizations)

� General Publics (General public¶s overall

attitude toward co.¶s products and

activities)

� Internal Publics (Company¶s workers,managers, volunteers and the board of 

directors)

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(B) MACRO-ENVIRONMENT

CompanyDemographic

Forces

Economic

Forces

Natural

Forces Technological

Forces

Political Forces

Cultural

Forces

³ 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´

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MACRO-ENVIRONMENT� An organization¶s success depends on the

ability of its executives to manage its

marketing system in relation to itsexternal environment. These forces

(macro-environmental forces) are

uncontrollable and pose opportunities

and create threats for the company.

TODAY YOU HAVE TO RUN FASTER TO

STAY IN THE SAME PLACE.

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INDIAN MARKETING

ENVIRONMENTFew Examples««««

� H ow some of the industry leaders lost  thei r  

compet i t i ve ad vant age because the y failed t o per cei ve the envi r onment al changes«.?

� The decade of 1980s saw man y of the

industry t i t ans losing thei r compet i t i vead vant age t o r elat i vel  y new entr ants««..

(C ont d  ..)

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Few Examples««««� Hindustan Motors and Premier

Automobiles lost their pre-eminentposition in the Indian market to MarutiUdyog¶s Maruti 800.

� Mahindra and Mahindra were shaken upby Maruti Udyog¶s Gypsy.

� Titan watches heralded a new era of watches and shook the giant HMT.

� Hindustan Levers Surf was cornered byNirma.

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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 sawan explosion in the market with about

half-a-dozen brands.

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HOW TO ANALYZE

THE CASE STUDY ?� (1) Introduction : ( Write a brief 

introduction of the case study ).

� (2) Situation Analysis : ( Afterunderstanding the case do the situation

analysis ). SWOT / SWORT Analysis

is one of the Universally practiced way of 

doing the situation analysis. If enough

information is given n the case, then do

the SWOT / SWORT Analysis.

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HOW TO ANALYZE

THE CASE STUDY ?

� (3) Identify the problems ( Specify major

problem area ).

� (4) Suggest the Solutions ( Alternative

solutions ). Recommend the best solutionin your view.

� (5) If at the end of the case ,questions are

asked, then you can answer them directly just after the Situation Analysis (SWOT).

� (6) Conclusion (if any)

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HOW TO ANALYZE

THE CASE STUDY ?� SWOT / SWORT ANALYSIS :

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Leveraging

Challenging

(Problem)

ConstraintsVulnerable

RISKS