MARKETING ENVIRONMENT

THE COMPANYS MARKETING ENVIRONMENT

The Economy Social Factors
Suppliers Distributors & Dealers

Demography

Company
Public

Cultural Factors

Customers

Competitors

Political & Legal

Technology

THE COMPANYS MARKETING ENVIRONMENT

All Companies operate within a marketing environment. This environment consists of all the factors and forces that affect the companys ability to transact effectively with its target market. This environment can be divided into : (A) Micro-environment (B) Macro-environment

(A) MICRO-ENVIRONMENT
The microenvironment consists of the forces close to the company that affects its ability to serve its customers. It consists of following components : (i) Companys internal environment (Companys other departments) (ii) Suppliers (iii) Marketing Intermediaries (iv) Customers (v) Competitors (vi) Publics

MICRO-ENVIRONMENT

Company

Suppliers
Competitors

Marketing Intermediaries

Customers

Publics

(i) THE COMPANY

R&D Purchasing

Finance

Manufacturing

Top Management

Mktg.

Accounting

(The Companys Internal Environment)

(ii) SUPPLIERS
Suppliers are an important link in the companys overall customer value delivery system. 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 price trends of their key inputs.(Rising supply costs may force price increases that can harm the companys sales volume).

(iii) MARKETING INTERMEDIARIES

Marketing intermediaries are firms that aid the company in promoting, selling, and distributing its goods to the final buyers.
They include middlemen, physical distribution firms, marketing service agencies and financial intermediaries.

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 to merchandize, e.g. brokers, representatives. Merchant Middlemen Buy, take title to the goods, and resell merchandize, e.g. wholesalers, retailers etc.

MARKETING INTERMEDIARIES
Physical Distribution Firms - Assist
the co. in stocking and moving goods from their original locations to their destinations,e.g. ware housing firms, transportation firms.

MARKETING INTERMEDIARIES
Marketing Service Agencies Assist
the company in promoting its products to the right markets, e.g. marketing research firms, advertising agencies, marketing consultancy firms etc.

MARKETING INTERMEDIARIES
Financial Intermediaries Help
finance transactions or insure against the risks associated with the buying and selling of goods, e.g. banks, credit companies, insurance companies etc.

(iv) CUSTOMERS / MARKETS

.
Reseller Market Business Market Govt. Market

Consumer Market

Company

International Market

(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.

COMPETITORS
Four basic competitions faced by a company :

monopolistic Competition

Oligo poly

Perfect competition Company monopolyCo mpetition

CHARECTERI STICS
Number of competitors

PERFECT

MONOPOLIST IC
FEW TO MANY

OLIOPOLISTI C
VERY FEW

MONOPOLY

MANY

NO DIRECT COMPETITER

Similarity of goods/services offered by competing firms

SAME

Seemingly different but may be quite similar

Similar or different

No directly competing products

Individual firm's None (set by the control over price market)

Some

Some

REGULATED BY GOVT

Examples

WATER PACKET AGRI PRODUCT

SHAMPOO OIL

AIROPLANE AUTOMOBOIL

RAILWAY

(vi) PUBLICS
Any group that has an actual or potential interest in or impact on an organizations ability to achieve its objectives.
Govt. Public Media Public Financial Public Citizen Action Public Local Public General Public

Co.

Internal Public

PUBLICS
Financial Publics (Banks, investment houses and stock holders) Media Publics (Newspapers, magazines, and radio & T.V. stations) Govt. Publics (Rules & regulations related to safety, truth in advertising and other matters) Citizen-action Publics (Consumer organizations, environmental groups, minority groups etc.)

PUBLICS
Local Publics (Neighborhood residents and community organizations) General Publics (General publics overall attitude toward co.s products and activities) Internal Publics (Companys workers, managers, volunteers and the board of directors)

(B) MACRO-ENVIRONMENT
Natural Forces Economic Forces Political Forces Demographic Forces

Technological Forces

Company

Cultural Forces

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

MACRO-ENVIRONMENT
An organizations success depends on the ability of its executives to manage its marketing system in relation to its external 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.

INDIAN MARKETING ENVIRONMENT

Few Examples How some of the industry leaders lost their competitive advantage because they failed to perceive the environmental changes.? The decade of 1980s saw many of the industry titans losing their competitive advantage to relatively new entrants.. (Contd..)

Few Examples
Hindustan Motors and Premier Automobiles lost their pre-eminent position in the Indian market to Maruti Udyogs Maruti 800. Mahindra and Mahindra were shaken up by Maruti Udyogs Gypsy. Titan watches heralded a new era of watches and shook the giant HMT. Hindustan Levers Surf was cornered by Nirma.

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 saw an explosion in the market with about half-a-dozen brands.

HOW TO ANALYZE THE CASE STUDY ?

(1) Introduction : ( Write a brief introduction of the case study ). (2) Situation Analysis : ( After understanding the case do the situation analysis ). SWOT 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.

HOW TO ANALYZE THE CASE STUDY ?

(3) Identify the problems ( Specify major problem area ). (4) Suggest the Solutions ( Alternative solutions ). Recommend the best solution in 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)

HOW TO ANALYZE THE CASE STUDY ?

SWOT / SWORT ANALYSIS :
Leveraging

STRENGTHS

OPPORTUNITIES
Vulnerable

Constraints WEAKNESSES

THREATS
Challenging
(Problem)

RISKS