MODULE – 2

UNDERSTANDING THE MARKET ENVIRONMENT

ASSESS THE IMPACT OF MICRO AND MACRO ENVIRONMENT

Marketing Environment made up of Micro and Macro Environment

2.1. Micro Environment

It is consists of forces close to the company that affects its ability to serve its
customers.
 The Company
 The Suppliers
 The Marketing Intermediaries
 The Customers
 The Competitors
 The Publics

2.2. Macro Environment

 Demographic Environment
 Changing age
 Family structure
 Geographic population shifts
 Educational Characteristics
 Population diversity

 Economic Environment
 Purchasing power
 Spending pattern

 Natural Environment
 Shortage of raw materials
 Increased cost of energy
 Government intervention in natural resource mgt

 Technological Environment
 Rapid change in technology
 High R&D budgets
 Minor product improvement
 Increased Government regulations
  Political Environment
 Laws
 Government agencies
 Pressure groups

 Cultural Environment
 Basic values
 Perceptions
 Behaviors

SERVICES:

A Service is an act or performance offered by one party to another party. Although the
process may be tied to a physical product, the performance is essentially intangible and
does not normally result in ownership of any of the factors of production.

Services are economic activities that create value and provide benefits for customers in
specific times and places, as a result of bringing about a desired change in – or on behalf
of-the recipient of service.

Services are defined as “a form of product that consist of activities, benefits or

satisfaction offered for sale that are essentially intangible and do not result in ownership
of anything”.

Service Marketing Triangle

organization

External Internal Marketing

Marketing

customer employees
Interactive Marketing
2.3 Importance of services

• Advances in technology
• Growth in per capita income
• A trend towards outsourcing
• Deregulation
• Increasing growth in retailing due to increase in propensity to consumer

2.4 Distinctive characteristics of services

• Intangibility
• Inseparability
• Variability
• Perishability

2.5 Services Marketing mix

1. Product
o Physical good features
o Quality level
o Accessorie s
o Packaging
o Warranties
o Product lines
o Branding

2. Place
o Channel type
o Exposure
o Intermediaries
o Outlet locations
o Transportation
o Storage
o Managing Channels

3. Promotion
o Promotion blend
o Salespeople
Number, selection, training, incentives
o Advertising
Targets, media types, types of ads, copy thrust
o Sales promotion
o Publicity

4. Price
o Flexibility
 o Price level
o Terms
o Differentiation
o Discounts
o Allowances

5. People
All human actors who play a part in service delivery and thus influence the
buyer’s perceptions namely the firm’s personnel, the customer, and the other
customers in the service environment.

6. Physical Evidence
The environment in which the service is delivered and where the firm and
customer interact and any tangible components that facilitate performance or
communication of service.

7. Process
The actual procedures, mechanism and flow of activities by which the service
is delivered – the service delivery and operating systems.