Marke ng Management

UNIT-6
Marke ng Environment
The marketing environment refers to the external factors and forces that can affect a company's ability
to effectively market its products or services. It includes various elements and influences that are
beyond the control of a company but can significantly impact its marketing strategies, decisions, and
overall success.
The marketing environment consists of both the microenvironment and the macroenvironment:
1. Microenvironment:
This includes factors that are close to the company and directly impact its operations and marketing
activities. Key components of the microenvironment include:
i. Customers: The target market segment, their needs, preferences, and buying behavior.
ii. Suppliers: Individuals or organizations that provide inputs, such as raw materials,
components, or services to the company.
iii. Competitors: Other firms that operate in the same industry and offer similar products or
services.
iv. Intermediaries: Organizations involved in the distribution channel, such as wholesalers,
retailers, and logistics providers.
v. Publics: Groups that have an interest in or impact on the company, including media,
government agencies, financial institutions, and local communities.
2. Macroenvironment:
This includes broader societal forces that can influence the entire industry or market. The
macroenvironment factors are generally analyzed using the PESTEL framework, which stands for:
i. Political factors: Government regulations, policies, and political stability.
ii. Economic factors: Overall economic conditions, such as inflation, unemployment, and
consumer purchasing power.
iii. Socio-cultural factors: Social values, cultural norms, demographics, and lifestyle trends.
iv. Technological factors: Advancements in technology, innovation, and the impact on industry
dynamics.
v. Environmental factors: Concerns related to environmental sustainability, ecological issues,
and corporate social responsibility.
vi. Legal factors: Laws and regulations that affect business operations, advertising, and
marketing practices.
Scanning the Indian marke ng environment based on economic,
demographic, socio-cultural, technological, poli cal, and legal factors:

1. Economic Factors:

 India is one of the fastest-growing major economies globally, with a large consumer market
and a rising middle class.
 Factors such as GDP growth rate, inflation, interest rates, and exchange rates can impact
consumer spending patterns and overall business environment.
 Income disparities, rural-urban divide, and regional economic variations influence market
dynamics and consumer behavior.
2. Demographic Factors:

 India has a vast and diverse population, with a median age of around 29 years, indicating a
young consumer base.
 Rapid urbanization, increasing urban middle class, and a growing working-age population
contribute to market opportunities.
 Regional and cultural diversity necessitates tailored marketing strategies to target different
segments effectively.
3. Socio-cultural Factors:

 India is a culturally rich and diverse country with multiple languages, religions, and
traditions.
 Social values, beliefs, and norms influence consumer preferences, purchasing decisions, and
brand perceptions.
 Changing lifestyles, increasing awareness of health and wellness, and evolving gender roles
impact market trends and demands.
4. Technological Factors:

 India has witnessed significant technological advancements, including widespread internet

penetration, mobile phone adoption, and e-commerce growth.
 Digital transformation has influenced consumer behavior, communication channels, and
marketing strategies.
 Technological innovation, such as artificial intelligence, big data analytics, and automation,
offers opportunities for personalized marketing and customer engagement.
5. Political Factors:

 Political stability, government policies, and regulatory frameworks impact business operations
and market conditions.
 Initiatives such as "Make in India," "Digital India," and "Startup India" promote
entrepreneurship, manufacturing, and digitalization.
 Trade policies, taxation, and foreign investment regulations affect market entry, expansion,
and international business relations.
6. Legal Factors:

 Laws and regulations govern various aspects of business operations, marketing practices, and
consumer protection in India.
 Intellectual property rights, advertising standards, data protection, and competition laws
influence marketing strategies and industry practices.
 Compliance with legal requirements and staying updated with evolving regulations is
essential for businesses operating in India.

Michael Porter‘s Model Of Compe ve Analysis

Michael Porter's model of competitive analysis, often referred to as Porter's Five Forces, is a
framework that helps analyze the competitive dynamics and attractiveness of an industry. It provides
insights into the competitive intensity and profit potential within a particular market. The model
consists of five key forces:
1. Threat of New Entrants:
This force assesses the barriers to entry for new competitors in the industry. Factors that increase
barriers include high capital requirements, economies of scale, strong brand loyalty, government
regulations, and patents. Higher barriers make it more difficult for new entrants to compete, reducing
the threat to existing firms.
2. Bargaining Power of Suppliers:
This force evaluates the power suppliers have over industry players. Suppliers gain power when they
have few substitutes, can integrate forward into the industry, or have strong brand recognition.
Additionally, if there are limited suppliers, they can exert influence by controlling prices or the
availability of critical inputs. When suppliers hold significant power, it can impact the profitability of
firms in the industry.
3. Bargaining Power of Buyers:
This force considers the power buyers have in the industry. Buyers gain power when they purchase
large volumes, have many alternatives, or can easily switch suppliers. When buyers hold significant
power, they can demand lower prices, better quality, or additional services, affecting the profitability
of firms in the industry.
4. Threat of Substitute Products or Services:
This force looks at the availability of substitute products or services that can fulfill a similar need.
When substitutes are readily available and offer comparable or better value, it puts pressure on prices
and erodes profitability. The higher the threat of substitutes, the more challenging it becomes for firms
to maintain their market share and profitability.
5. Intensity of Competitive Rivalry:
This force examines the level of competition among existing firms in the industry. Factors that
influence competitive intensity include the number and size of competitors, industry growth rate,
product differentiation, and exit barriers. When competition is fierce, companies face price wars,
pressure on profit margins, and the need to differentiate themselves to gain a competitive advantage.
BCG Matrix
The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic marketing tool
developed by Bruce Henderson of the Boston Consulting Group. It helps businesses analyze their
product portfolio and make decisions regarding resource allocation and strategic priorities. Here's a
description of the BCG Matrix along with a diagram:
The BCG Matrix categorizes a company's products into four quadrants based on two dimensions:
market growth rate and relative market share.
1. Stars:
Stars represent products that have a high market share in a rapidly growing market. These products
generate substantial revenue and have the potential to become cash cows in the future. Companies
should invest in stars to maintain their market leadership and capture future growth opportunities.
2. Cash Cows:
Cash cows are products with a high market share in a low-growth or mature market. Although they
may not have significant growth prospects, they generate stable cash flows. Companies should
maximize profits from cash cows and use the generated cash to invest in other areas of their business.
3. Question Marks (Problem Child):
Question marks are products in high-growth markets but have a low market share. They require
significant investment to increase market share and reach the star status. Companies need to carefully
evaluate the potential of question marks and decide whether to invest and build them into stars or
divest and phase them out.
4. Dogs:
Dogs represent products with a low market share in low-growth markets. These products do not
generate substantial profits and may drain resources. Companies should assess the viability of dogs
and consider divestment if they are not strategically valuable.
Here is a diagram illustrating the BCG Matrix:
ANSOFF Matrix
The Ansoff Matrix, developed by Igor Ansoff, is a strategic marketing tool that helps businesses
identify growth strategies for their products and markets. It consists of four strategic options, which
are described below along with a diagram:
1. Market Penetration:
Market penetration involves focusing on existing products and existing markets to increase market
share. The aim is to attract more customers or encourage existing customers to purchase more
frequently. Strategies for market penetration may include aggressive marketing campaigns, loyalty
programs, or price adjustments.
2. Market Development:
Market development involves expanding into new markets with existing products. This could involve
targeting new customer segments, entering new geographic regions, or exploring new distribution
channels. Market development strategies may involve market research, partnerships, or localization
efforts to adapt to the new market's needs.
3. Product Development:
Product development involves creating new or modified products to cater to existing markets. This
strategy aims to meet the evolving needs of customers and stay competitive. Companies may conduct
research and development, invest in product innovation, or leverage customer feedback to introduce
new products or product variations.
4. Diversification:
Diversification involves entering entirely new markets with new products. It can be either related
diversification, where the new market or product has some synergy or connection to the existing
business, or unrelated diversification, where the new market or product is distinct from the existing
business. Diversification strategies often require careful market research, partnerships, acquisitions, or
strategic alliances.
Here is a diagram illustrating the Ansoff Matrix:
SWOT Analysis
SWOT analysis is a widely used strategic planning tool in marketing that helps businesses assess their
internal strengths and weaknesses, as well as external opportunities and threats. It provides a
structured framework for understanding the current position of a company and developing strategies
to capitalize on strengths, minimize weaknesses, exploit opportunities, and mitigate threats. Here's
how SWOT analysis is applied in marketing, as popularized by Philip Kotler:
1. Strengths:
Strengths are the internal factors that give a company a competitive advantage over its competitors.
These can include aspects such as strong brand equity, innovative products, superior distribution
networks, talented workforce, cost advantages, or established customer relationships. By identifying
and leveraging strengths, companies can position themselves effectively in the market and
differentiate from competitors.
2. Weaknesses:
Weaknesses are internal factors that put a company at a disadvantage compared to its competitors.
These can include limited resources, outdated technology, poor brand image, inefficient processes, or
lack of expertise in certain areas. Identifying weaknesses allows companies to focus on improving
those areas or finding ways to minimize their impact on overall marketing performance.
3. Opportunities:
Opportunities are external factors that can be leveraged to benefit a company's marketing efforts.
These can include emerging market trends, new customer segments, technological advancements,
changes in regulations, or gaps in the competition. By identifying opportunities, companies can
develop strategies to capitalize on them and gain a competitive edge.
4. Threats:
Threats are external factors that pose challenges or risks to a company's marketing performance.
These can include intense competition, economic downturns, changing consumer preferences,
disruptive technologies, or legal and regulatory constraints. Recognizing threats allows companies to
develop contingency plans, mitigate risks, or adapt their marketing strategies accordingly.
The SWOT analysis is typically represented in a four-quadrant matrix as follows:
Basics of Marke ng Research
Marketing research is a systematic process of gathering, analyzing, and interpreting data and
information to support marketing decision-making. It involves collecting relevant data about
customers, markets, competitors, and other marketing variables to gain insights and make informed
strategic and tactical decisions. Here are the basics of marketing research, as outlined by Philip
Kotler:
1. Defining the Research Problem:
The first step in marketing research is to clearly define the research problem or objective. This
involves identifying the specific information needed, understanding the purpose of the research, and
determining the scope and limitations of the study. A well-defined research problem ensures that the
research efforts are focused and relevant.
2. Developing the Research Plan:
The research plan outlines the overall approach and methodology for conducting the research. It
includes decisions on research design, data collection methods, sample selection, and measurement
instruments. The research plan should be designed to address the research objectives effectively and
efficiently while considering available resources.
3. Collecting Data:
Data collection involves gathering relevant information that is required to answer the research
questions. There are two types of data: primary data and secondary data. Primary data is collected
directly from original sources through methods such as surveys, interviews, observations, or
experiments. Secondary data is obtained from existing sources such as government publications,
industry reports, or previous research studies.
4. Analyzing and Interpreting Data:
Once the data is collected, it needs to be processed, analyzed, and interpreted to draw meaningful
insights. This involves applying statistical techniques, data visualization tools, and qualitative analysis
methods to identify patterns, trends, and relationships in the data. The analysis should be aligned with
the research objectives and provide actionable insights for decision-making.
5. Reporting and Presenting Findings:
The findings and insights derived from the data analysis need to be communicated effectively. This
involves preparing a comprehensive research report that summarizes the research process, presents the
findings, and provides actionable recommendations. The report should be tailored to the target
audience and clearly convey the key insights and implications for marketing decisions.
6. Implementing and Monitoring:
The final step is to implement the marketing strategies and tactics based on the research findings. It is
important to monitor the results and evaluate the effectiveness of the implemented strategies. Ongoing
monitoring and feedback loops help assess the impact of marketing actions and refine future decision-
making.
Ethics in Marke ng
Ethics in marketing refers to the moral principles and standards that guide ethical behavior in the
marketing profession. It involves conducting marketing activities in a manner that is fair, transparent,
honest, and respects the rights and well-being of consumers and other stakeholders. Philip Kotler, a
renowned marketing expert, emphasizes the importance of ethical marketing practices. Here are key
aspects of ethics in marketing:
1. Truth and Accuracy:
Marketing should be based on truth and accuracy, avoiding deceptive or misleading practices.
Marketers should provide clear and transparent information about products or services, avoiding false
claims or exaggerations. Honest representation of products and services helps build trust and
credibility with customers.
2. Consumer Privacy and Data Protection:
Marketers should respect and protect consumer privacy and handle personal data responsibly.
Collecting and using consumer data should comply with relevant laws and regulations, and marketers
should obtain consent when necessary. Protecting customer information helps maintain trust and
safeguards against misuse.
3. Avoiding Stereotyping and Discrimination:
Marketers should avoid stereotyping or discriminating against individuals or groups based on
characteristics such as race, gender, religion, nationality, or disability. Advertising and promotional
materials should be inclusive and reflect diverse perspectives, respecting the dignity and rights of all
individuals.
4. Fair Pricing and Value:
Marketers should set prices that are fair and reasonable based on the value offered to customers.
Unfair pricing practices, such as price gouging or deceptive pricing, should be avoided. Providing
value to customers through competitive pricing and quality products contributes to long-term
customer satisfaction.
5. Responsible Advertising and Promotion:
Marketers should ensure that advertising and promotional activities are responsible, honest, and
respectful. They should not make false claims, use manipulative tactics, or exploit vulnerabilities of
consumers, particularly children. Adherence to advertising standards and codes of ethics promotes
integrity in marketing communications.
6. Social and Environmental Responsibility:
Marketers should consider the social and environmental impacts of their activities and strive to
contribute positively to society. This includes supporting sustainability initiatives, ethical sourcing
practices, and socially responsible marketing campaigns. Responsible marketing helps build a positive
brand image and contributes to long-term business success.

Ethical marketing practices are essential for maintaining customer trust, building strong brand
reputation, and fostering long-term relationships with stakeholders. They align marketing activities
with broader societal values and contribute to the overall well-being of consumers and society as a
whole.
Rela onship Marke ng
Rela onship marke ng, according to Philip Kotler, is a strategic approach to marke ng that focuses
on building and nurturing long-term rela onships with customers. It emphasizes the importance of
customer reten on, loyalty, and sa sfac on as key drivers of business success. Here are the key
aspects of rela onship marke ng as outlined by Kotler:

1. Customer-Centric Approach:

Rela onship marke ng places the customer at the center of marke ng efforts. It recognizes the value
of understanding customers' needs, preferences, and behaviors to tailor marke ng ac vi es and
provide personalized experiences. By focusing on individual customers and their unique
requirements, rela onship marke ng aims to create mutually beneficial and long-las ng
rela onships.

2. Building Customer Loyalty:

Rela onship marke ng seeks to cul vate customer loyalty by developing strong emo onal
connec ons and fostering trust. It goes beyond transac onal interac ons and aims to create a bond
between the customer and the brand. Loyal customers are more likely to repurchase, provide
posi ve word-of-mouth, and become brand advocates, contribu ng to sustainable business growth.

3. Two-Way Communica on:

Effec ve communica on is a fundamental aspect of rela onship marke ng. It involves establishing
open channels of communica on that allow for dialogue and feedback. Marketers should ac vely
listen to customers, respond to their inquiries and concerns, and engage in ongoing conversa ons to
understand their needs and preferences be er. Two-way communica on helps build trust, resolve
issues, and strengthen rela onships.

4. Customer Reten on and Repeat Business:

Rela onship marke ng focuses on retaining exis ng customers and encouraging repeat business. It
recognizes the value of customer life me value (CLV) and aims to maximize the revenue generated
from long-term customer rela onships. By providing excellent customer experiences, personalized
offerings, and proac ve customer support, rela onship marke ng aims to reduce customer churn
and increase customer loyalty.

5. Rela onship Development and Customiza on:

Rela onship marke ng involves con nuously developing and nurturing customer rela onships over
me. It seeks to understand customers' evolving needs and preferences and adapt marke ng
strategies accordingly. Customiza on and personaliza on play a crucial role in rela onship marke ng,
allowing marketers to deliver tailored solu ons and experiences that meet individual customer
requirements.

6. Cross-Selling and Up-Selling:

Rela onship marke ng recognizes the poten al for addi onal revenue by cross-selling and up-selling
to exis ng customers. Marketers can leverage their understanding of customer preferences and
behaviors to recommend complementary products or higher-value op ons. By iden fying and
fulfilling addi onal needs of customers, rela onship marke ng seeks to increase customer
sa sfac on and generate incremental sales.
Holis c Marke ng
Holis c marke ng, as described by Philip Kotler, is an integrated approach to marke ng that
considers the en re business and its various components in cra ing marke ng strategies. It
recognizes that marke ng goes beyond tradi onal promo onal ac vi es and encompasses all
aspects of the organiza on that impact customer value and sa sfac on. Here are the key aspects of
holis c marke ng according to Kotler:

1. Integrated Marke ng:

Holis c marke ng emphasizes the integra on and coordina on of all marke ng ac vi es to deliver a
consistent and seamless customer experience. It involves aligning marke ng strategies, messaging,
and communica ons across different channels and touchpoints. Integrated marke ng ensures that
all customer interac ons reflect the brand's posi oning and value proposi on.

2. Internal Marke ng:

Holis c marke ng recognizes the importance of internal stakeholders, including employees, in

delivering a superior customer experience. Internal marke ng focuses on crea ng a customer-centric
culture within the organiza on, aligning employee values with the brand's promise, and empowering
employees to deliver excep onal service. Engaged and mo vated employees contribute to customer
sa sfac on and brand advocacy.

3. Rela onship Marke ng:

Holis c marke ng emphasizes building and nurturing long-term rela onships with customers. It
recognizes the value of customer loyalty, repeat business, and posi ve word-of-mouth. Rela onship
marke ng involves understanding customer needs, providing personalized experiences, and
maintaining open lines of communica on. Building strong customer rela onships leads to customer
reten on, advocacy, and increased customer life me value.

4. Socially Responsible Marke ng:

Holis c marke ng acknowledges the importance of social and environmental responsibility. It

considers the impact of marke ng ac vi es on society, communi es, and the environment. Socially
responsible marke ng involves ethical prac ces, sustainability ini a ves, and contribu ng to the
well-being of stakeholders. By demonstra ng social responsibility, organiza ons enhance their
reputa on and build stronger connec ons with customers.

5. Performance Marke ng:

Holis c marke ng focuses on measuring and evalua ng marke ng performance based on key
performance indicators (KPIs) aligned with organiza onal goals. It involves analyzing customer data,
monitoring marke ng metrics, and assessing the effec veness of marke ng strategies and
campaigns. Performance marke ng enables data-driven decision-making, op miza on of marke ng
efforts, and con nuous improvement.
6. Customer Value Crea on:

Holis c marke ng centers around crea ng customer value by understanding and fulfilling customer
needs and preferences. It involves delivering products, services, and experiences that exceed
customer expecta ons. Customer value crea on includes offering superior quality, convenience,
customiza on, innova on, and support throughout the customer journey. By consistently delivering
value, organiza ons build strong customer rela onships and achieve a sustainable compe ve
advantage.
Rural Marke ng
Philip Kotler, a renowned marketing expert, has provided insights into rural marketing and the unique
considerations involved in reaching and serving rural markets. Here are some key points on rural
marketing according to Kotler:
1. Understanding Rural Consumers:
Rural marketing begins with a deep understanding of rural consumers and their unique characteristics,
needs, aspirations, and preferences. Kotler highlights the importance of conducting market research to
gain insights into the rural consumer's mindset, behavior, and purchasing patterns. This understanding
helps in developing targeted marketing strategies.
2. Tailoring Products and Services:
Rural markets often have specific requirements and preferences that differ from urban markets. Kotler
suggests adapting products and services to suit rural needs and affordability levels. This may involve
customizing product features, packaging, pricing, and distribution methods to align with rural market
demands.
3. Distribution Strategies:
Rural areas often have limited access to formal retail channels and infrastructure. Kotler emphasizes
the need to develop effective distribution strategies that overcome these challenges. This may involve
establishing rural distribution networks, leveraging local partnerships, or exploring alternative
distribution channels such as rural fairs, haats (local markets), or mobile vans.
4. Communication and Promotion:
Rural marketing requires tailored communication strategies to reach and engage rural consumers
effectively. Kotler suggests using vernacular languages, local media channels (radio, print, outdoor),
and community influencers to deliver marketing messages. Additionally, promotions and advertising
should be designed to resonate with rural values, traditions, and aspirations.
5. Building Trust and Relationships:
In rural markets, trust plays a significant role in consumer decision-making. Kotler emphasizes the
importance of building trust through consistent product quality, reliable after-sales service, and ethical
business practices. Establishing long-term relationships and maintaining a strong presence in rural
communities are vital for success in rural marketing.
6. Socio-Cultural Sensitivity:
Rural markets have distinct socio-cultural dynamics that marketers must consider. Kotler highlights
the need for marketers to respect and appreciate local customs, traditions, and beliefs. Strategies
should be sensitive to local cultural nuances and avoid any actions that may be seen as disrespectful or
offensive.
7. Rural Development Initiatives:
Kotler emphasizes the role of marketers in contributing to rural development. He suggests integrating
social responsibility initiatives into marketing strategies, such as supporting education, healthcare,
infrastructure development, and environmental sustainability in rural areas. Aligning marketing efforts
with rural development goals can enhance brand reputation and create a positive impact.