Marketing

Environment

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 DEFINITION

“A company's marketing environment consists

of the internal factors & forces, which affect
the company's ability to develop & maintain
successful transactions & relationships with
the company's target customers.”
- Philip Kotler

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Environments
Micro - Environment
v
The Micro-environment of
the company consist of
various forces in its
immediate environment that
affect its ability to operate
effectively in its chosen
markets.
Macro - Environment
The Macro-environment
consists of broader forces that
not only affect the company
and the industry, but also
other in the micro-
environment.
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 Micro-Environment

The Micro-environment of the company consist

of various forces in its immediate environment
that affect its ability to operate effectively in its
chosen markets.
 Micro-Environment
Consists of

1 2 3 4 5
The Company’s Marketing Customers Competitors
Company Suppliers Intermediarie
s
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Public
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 1
The Company

In designing marketing plans, marketing management

must consider other available departments.

Like, Top management; Finance; R&D; Manufacturing;

Purchasing; Sales; Advertising etc.

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 2
Company Suppliers
• Suppliers provide the resources needed by the company to
product its goods and services.
• The development in the suppliers environment have a substantial
impact on the marketing operations of the company.
• Company can lower their supply costs & increase product quality
to gain competitive advantage in the market.
• Supply shortage have to be fully monitored & planed

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 3
Marketing Intermediaries

• Intermediaries or distribution channel members often

provide a valuable link between an organization and its
customers.
• They are either business houses or individuals.
• They help in promoting, selling & distributing the goods.

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 4
Customers
The target market of the company is usually of five types.
• Consumer market – Individual & Household
• Industrial market – Organization buy for producing goods &
services.
• Reseller market – Buy from organization & sell to others.
• Government market – Who buy goods & services in order to
produce public services.
• International market – Individual & organization of nations other
than home land, who buy for consumption of industrial use

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 5
Competitors
• Every company faces competition.
• “Company to grasp the full range of its competition is to
take view points of a buyer” – Philip Kotler
• The competitive environment consists of certain basic
things, which every marketing manager has to take note
of.
• This helps the company in facing a host of competitors
with confidence.

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 6
Public
• A public id defined as any group that has an actual or
potential interest in or impact on a company’s ability to
achieve its objectives.
• “Companies must put their primary energy into
effectively managing their relationships with their
customers, distributors and the suppliers, their overall
success will be affected by how other publics in the
society view their activity.” – Philip Kotler

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 Macro-
Environment

Macro-environment refers to those

factors, which are external to
company’s activities.
 Macro-Environment
Consists of

1 2 3 4 5
Demographi Economic Physical Technologica Political
c l

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Legal Social &
Cultural
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 1
Demographic Environment

• Demography is the study of population characteristics

that are help to describe consumers.
• Demography tell marketers about potential customers.
• Demography is the study of human population in terms
of size, density, location, age, gender, race, occupation
etc.

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 2
Economic Environment

• Economic environment affects the success of a business

as well as its survival.
• Pattern of real growth in income.
• Trends of gross national products.
• Variation in geographical income distribution.

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 3
Physical Environment

• The physical environment involves the natural resources.

• Marketers should be aware of trends like shortages of
raw material, increase pollution and increased
governmental intervention in natural resources
management.

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 4
Technological Environment

• Technological discoveries & development create

opportunities & threats in the market.
• Changes speedily and frequently.

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 5
Political Environment

• Ruling party has close connection with economic system

• Political parties influence or limit various organization.
• Political environment can change governmental policies.

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 6
Legal Environment

• Marketing decision strongly affected by laws pertaining

to competition, price-setting, distribution arrangement,
advertising etc.

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 7
Social & Cultural Environment

• Socio-cultural forces refer to the attitudes, beliefs, norms,

values, lifestyles of individuals in a society.
• These forces can change the market can create
opportunities and threats

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 “
Environment Scanning

“An analysis of external sources to find out factors

those impact a business”

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 PESTEL
analysis

O Political
O Economic
O Socio-cultural
O Technological
O Environmental
O Legal
 SWOT
analysis

O Strength
O Weakness
O Opportunity
O Threat
 TOWS
analysis

O Threat
O Opportunity
O Weakness
O Strength
According to H. Weihrich:
“
Threats, Opportunities (in the environment),
Weaknesses, Strengths (of the organization) should be
analyzed in this order, as a proper problem-solving
sequence in the process of strategy formulation.

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 Strengths

Strengths are the internal factors,

positive characteristics of the
organization
 Weaknesses

Weaknesses are internal negative

factors or challenges
 Opportunities

Opportunities (external positive) -

phenomena and trends in the
environment that if used appropriately
could stimulate the development of
company and weaken the threat.
 Threats

Threats (external negative) - all the

external factors, which is perceived as
barriers to the development of the
company, inconveniences causing
additional costs of the action.
 THANK YOU

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