Module 2

MARKETING ENVIRONMENT

Dr.S.G.Kulkarni

Marketing Environment
Philip Kotler :
A company marketing environment
consists of the actors and forces that
affect the companys ability to develop
and maintain successful transactions
and relationships with its target
customers.

Dr.S.G.Kulkarni

Marketing Environment
Micro environment

Macro environment

Controllable
Co Organization
Management
Resources
M Mix

Uncontrollable
Demographic
Economic
Ecological
Technological
Political
Sociological

Partially
Suppliers
Customers
Dealers
Competitors
Community

( Social groups)

Dr.S.G.Kulkarni

Marketing Environment
The inputs concerned with micro
environment are
Company

organization

Suppliers
customers
Dr.S.G.Kulkarni

Marketing Environment
The outputs concerned with macro
environment are
Political
Economical
Technological

Macro environment factors may be

Controllable or partially - controllable
Dr.S.G.Kulkarni

Micro environmental factors

Company :

Company organization consists of Board of

Directors and functional managers.

Marketing plans are drawn up as per the

philosophy of Top management

Marketing decisions like new products,

expansion, etc depend on the support of top
management. It depends upon finance,
managerial skills, organizations strengths
and weaknesses.
Dr.S.G.Kulkarni

1. Company - continued

Marketing plans should be in

harmony with policies of other
departments such as production,
purchase, finance, personnel, etc
For ex: quality depends upon
production policies
Advertising and sales promotion on
budgets
Dr.S.G.Kulkarni

2. Suppliers
Supply raw materials, plant and
equipments, human resources,
technology
Their strategies affect ours
If they increase prices, we have to
revise price structure
Dr.S.G.Kulkarni

2. Suppliers -

continued

Decisions like make or buy depend upon

suppliers
Depends upon

Right
Right
Right
Right
Right
Right

supplier
place
time and lead time
price
quantity
quality

Dr.S.G.Kulkarni

2. Suppliers -continued

Good relations are required for

successful marketing

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3. Intermediaries

Wholesalers, retailers, agents, transporters,

warehousers, ad agencies, etc.
This is a choice of channel of distribution

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4. Customers

Purchase requirements vary from

customer to customer
Individual customers are influenced by
cultural, social and psychological
factors
They are large in number, scattered,
poorly informed, buy in small
quantities and frequently and are
guided by personal considerations
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4. Customers

Industrial producers are limited in number,

geographically concentrated, buy in large
in bulk, demand is derived, buy on
reciprocal basis, depend on lease hold.

Dealers buy for resale.

Government buys for public welfare,

defence

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5. Competitors

Supply similar products or

substitute products
Competitors adopt different actions
for getting greater share of markets
All firms compete with each other
for consumers buying power.

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6. Public

Financial public: financial institutions,

investment houses, insurance co,

Government public:
Citizen action public: consumer organizations,

environmental groups, minority groups, etc

General public: public image
Internal public: employees, Board, labour
unions, press and media

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Macro environment
1. Economic

Economic forces influence both

marketers and the consumers
Economic forces include
Competition monopoly, oligopoly
Buying power
Willingness to spend

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Macro environment
1. Economic - continued
Economic conditions include

Economic development
National income
Standard of living
State of agriculture
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Macro environment
1. Economic - continued
Business cycles
Interest rate
Price levels
Fiscal policies

marketers have to take into

consideration the changes taking place
in agriculture and industry

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2. Demography
Demography gives consumer profile
It is the study of population in respect of its

size, density, location, age, race,

occupation, marital status, education, sex
composition etc
All these factors influence marketing
decisions

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Acronyms used in respect of age

SKIPPIES
MOBYs
DINKS
PUPPIES
WOOFS

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2.Demography - continued

School

Kids with Income and

Purchasing Power
Mother Older, Baby Younger
Double Income, No Kids
Poor Urban Population
Well Off Older Folks

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2.Demography - continued
Mexico

is a nation of young population

Japan

old generation
America was a melting bowl. Now it is
a Salad bowl with Chinese, Filipinese,
Japanese, Asians, Koreans
Ads show women as decision makers
due to increase in education
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Demography - continued

Education
Illiterates
High school drop outs
Matriculates
Graduates
Professional degrees
Post graduates
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2.Demography - continued

Buying habits are determined by

income, education, age, family
composition and other
demographic factors
It helps in - Market segmentation,
demand forecasting, determination
of market potential
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2.Demography - continued

Indias population is roughly 108 crores

75% of population lives in villages
Rural marketing offers immense
opportunities and challenges to a creative
marketer
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2.Demography - continued

You find that the demand is increasing not

only for farm products, but also for nonfarm products

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Technology
It has a definite impact on buyers and

marketers decisions
It provides mechanical, physical and numerous
other processes which help in attaining higher
standard of living
It has adverse effects like pollution,
unemployment, increase in crime rate, etc
Marketers must be aware of new
developments in technology.
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Technology-continued
Technological developments may put

some people out of business and at the

same time, open up new business
opportunities to others
For ex: introduction of synthetic fabrics

drove away sheep raisers and cotton

growers out of business
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 Solar pocket calculators and hand

cameras
CDs and Video tapes
Virtual reality applications in Marketing is

a new application due to technological

progress
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Technology-continued
Technological developments have

improved the standard of living and

given more leisure time

Improvements in communication,

transportation

Technology has given wonder drugs like

Ampicilliin, by- pass surgery,

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Technology-continued

Technology grows out of research

made by business, universities

Most of the products that we talk

today were not there a few years
back. For example, Computers,
Photostat, laser technology,
scanners.
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3. Natural factors and ecological factors - also

These

also affect the pattern of

industries and marketing
Industries create pollution of air, water
and environment
The package in the form of plastic bags
and bottles create a lot of problems
Some governments have banned the
use of plastic bags.
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Political factors
Marketing is affected by monetary, fiscal,
import and export policies
Some of the Acts applicable are as follows:
Essential Commodities Act
Prevention of Food Adulteration Act
Trade and Merchandise marks Act
Packaged Commodities Act
Companies Act

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Political factors - continued

Political

and legal factors are inter

connected

Discontinuation
Introduction

of CCI, FERA, IDRA

of SEBI, FEMA, VAT

Rules

allow private participation in

transportation , telecom, airlines
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Social-Cultural environment

Advertisements and culture

Some ads are banned on TVs
Festivals like Ganesh festival, Diwali, IdMilad, Christmas,
Dress styles are different
School uniforms

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Cultural factors - continued

Food habits
Internet practice
Fast foods Pizza hut, Ken Fried
Chicken

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Cultural factors - continued

There are several movements like trade

union movement, consumer movement,
women's lib, deprived classes movement ,
etc.
These have their own expectations from
the market. If they are against their ideas,
they boycott the products

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Cultural factors - continued

Cause related Marketing

1980 saw the advent of cause related

marketing
The distinctive feature of case-related
marketing is the firms contribution to a
designated cause being linked to customers
engaging in revenue-producing transactions
with the firm
Example: CRY, AWWA, WWF cards
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Cultural factors - continued

Cultural and ethical forces are of
vital importance

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Responding to the marketing environment

There are two general approaches to

respond to marketing environmental
forces, viz., Passive approach and
Aggressive approach

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1) Passive or reactive approach

Under this approach the marketing

strategy is subject to micro
environment with macro environment
Environmental objectives of 2010 are
set in 2000 and strategies are
developed in 1998 and the
organizational structure is established
in 1995
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1) Passive or reactive approach continued

Stable environment is very rare.
Turbulent environment is common
Marketing environment should be
scanned systematically. These guide
marketing opportunities
Marketing strategy normally follows
passive approach that is coordinating
micro environment with macro
environment
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1) Passive or reactive approach - continued

India has opportunities for handcraft
goods, ready made garments, fast food
products, software development, call
centres and those areas which are labour
intensive

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2) Aggressive approach
Marketing manager tries to influence

environmental forces so as to create

market opportunities.
A firm can be able to influence the shape
of legislation through lobbying
A single organization cannot influence
population, economic condition

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Indian Marketing environment

Prosperity in rural area

Overflowing unaccounted money everywhere
Inflationary condition [ inflation is a permanent

guest]
Aggressive advertising on TV inspiring children

and women. Consumer is a King

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Indian Marketing environment - continued

Middle class explosion - Consumption

community

Better educated and exposed to the life styles

of the rich

Their aspirations have been constantly growing.

They often spend more than what they earn

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Middle class explosion

Their expenditure on non-food items is continuously

Our market is on par with UK, France, West Germany
More disposable income
Spend more on non food items
Invest in stock market

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