Global Marketing

Environment

Session – II Global Marketing

Marketing Environment: An Overview

• Consists of all factors external to an organization

• Affect the organization’s marketing activities.
• Largely uncontrollable, although marketers can
influence some of them.
For example,
– cannot control population trends, economic
conditions, or laws once passed,
– but it can have some influence on political processes,
technological developments, and competitive
situations.
Why Study It?

• identifying the important elements of the

marketing environment for their
organization
• assessing current and likely future
relationships between these factors
• developing effective strategies for a
changing environment
• Has become more complex as it change
rapidly and unpredictably
Why Study It?
• creates opportunities or threats in two basic
ways
– changes in the marketing environment can directly
affect specific markets (can make markets larger or
smaller or create new)
– changes in the marketing environment can directly
influence specific marketing activities

• Bottomline:
marketers need to understand the marketing
environment to be able to make good decisions
Identifying Market Opportunities and Threats

• use environmental scanning

– to identify important trends, and
– determine if they represent present or future
market opportunities or threats

• consists of identifying relevant factors and

assessing their potential impact on the
organization’s markets and marketing activities

• simpler to say than do

Environmental Scanning Approach
How to analyze market environment?
• One way to deal with a volatile marketing
environment is to use the seven key marketing
perspectives
• These perspectives are at the interface between
the controllable marketing circle and the
uncontrollable marketing environment
• The perspectives work both ways:
– they guide both a marketer’s outward
evaluation of the environment, and
– inward response to the environment through
marketing decisions
Marketing Environment
Social Environment

• Includes all factors and trends related to

groups of people, including their number,
characteristics, behavior, and growth
projections
• 2 important components of the social
environment:
– The demographic environment, and
– The cultural environment
Demographic Environment

• refers to the size, distribution, and growth rate of

groups of people with different characteristics.
• people from different countries, cultures, age
groups, or household arrangement often exhibit
different purchasing behaviors
• Global perspective requires that marketers be
familiar with important demographic trends
around the world
Demographic Environment
• Global population size and growth
– one indication of potential market opportunities.
– tremendous disparity in population size and
growth rates across countries
– population statistics make it clear that marketers
cannot rely on population growth in developed
countries alone for general increases in market
size
– largest growth markets, measured by population
size, are in the developing countries
The most populous countries
Demographic Environment

• Global Demographic Characteristics and

Trends
– Most marketers target subgroups within these
large populations.
– Trends in population subgroups are therefore
typically the most useful to marketers
• growth of the urban population
• aging of the population
• nature of household units
Cultural Environment

• refers to factors and trends related to how

people live and behave.
• Cultural factors, including the values,
ideas, attitudes, beliefs, and activities of
specific population subgroups, greatly
affect consumers’ purchasing behavior.
• Thus, marketers must understand
important cultural characteristics and
trends in different markets
Cultural Environment

• Cultural Diversity
– Different cultural groups retain many of their
habits, attitudes, interests, and behaviors even
though they may migrate to other parts of the
world
– Its not a melting pot but a mosaic
– Successful marketers understand the delicate
balance between important cultural differences
and similarities that unite different cultures
Cultural Environment

• Changing Roles
– As more women enter the workforce and
household compositions change, typical
household roles are altered
• Emphasis on health and fitness
– pursuit of a healthier lifestyle includes eating
more nutritious foods, exercising regularly,
participating in various sports activities, and
focusing on wellness
Cultural Environment

• Desire for convenience

– Changes in household composition and a
general shortage of time underlie an
increased desire for convenience
• Consumerism
– is the movement to establish and protect the
rights of buyers
– need to adopt an ethics perspective will gain
more prominence
– Increased environmentalism
Economic Environment

• includes factors and trends related to income

levels and the production of goods and services
• Economic trends affect the purchasing power of
markets
• Economy is strong enough to provide sufficient
purchasing power for consumers to satisfy their
wants and needs
• Economic trends in different parts of the world
can affect marketing activities in other parts of
the world
Economic Environment

• Some of the economic indicators which

are of importance to global marketers
– GDP
– Economic activity per person
– Economic growth
– Innovation in economy
Politico-Legal Environment

• encompasses factors and trends related to

governmental activities and specific laws and
regulations that affect marketing practice
• closely tied to the social and economic
environments
• important for marketers to understand specific
political processes, laws, and regulations, as
well as important trends in each of these areas
Global Political Trends
• international political events greatly affect
marketing activities
• One significant trend is a move from
government-dominated economies and socialist
political systems toward free market economies
• Another is movement toward free trade and
away from protectionism
• Free trade trend goes beyond trading blocs and
encompasses a global perspective
• Use of embargoes or sanctions by the UN or
individual governments to limit trade to specific
countries
Legislation

• must deal with laws at the international,

federal, state, and local levels
• Typically fall into two categories:
– Those promoting competition among firms,
and
– Those protecting consumers and society
Regulation and Regulatory Agencies

• Most legislations are enforced through

regulations developed by a variety of agencies,
and marketers must often work with them
• Often these regulations are not same at all
levels of governance
• As more firms participate in the global
marketplace, the need for international
regulations is emerging.
• One example is the International Standards
Organization’s 25-page set of quality standards
called ISO 9000.
Technological Environment
• includes factors and trends related to
innovations that affect the development of new
products or the marketing process
• Rapid technological advances make it
imperative that marketers take a technology
perspective
• can provide opportunities for
– new-product development,
– affect how marketing activities are performed,
or
– both
Competitive Environment

• consists of all the organizations that

attempt to serve similar customers
• Two types of competitors are of major
concern:
– brand competitors and
– product competitors
Institutional Environment
• consists of all the organizations involved in
marketing products and services
• include marketing research firms, advertising
agencies, wholesalers, retailers, suppliers, and
customers
• Trends in the institutional environment include
reengineering, restructuring, the virtual
corporation, horizontal organizations, and
empowerment
• The potential marketing implications of
organizational changes are illustrated by the
total quality management (TQM) and downsizing
trends
Assignment 1

• Scan through newspapers, TV programs,

journals or any other literature, and find
out atleast one event/items related to each
category of marketing environment and its
implications