Understanding Marketing Environment

Course Objective
The objective is to develop an
understanding of the basic concepts of
Marketing, its functions and its relevance
for Manager.
 Course Outcomes
1. To understand the scope of Marketing, Marketing Mix,
Marketing Environment, Market Segmentation, Targeting and
Positioning.
2. To understand the Product and Pricing Decisions, New Product
Development Process, Pricing Process, Policies and Strategies.
3. To understand the Promotion and Distribution Decisions,
Channel Design, Selectionand Management of Intermediaries.
 Marketing Environment
• The marketing environment consists of actors and
forces that affect management’s ability to build and
maintain relationships with target customers.

• Environment offers both opportunities and threats.

 Characteristics of Environment
• Environment is complex
• Environment is Dynamic
• Environment is multifaceted
• Environment has far reaching impact
 Marketing Environment

• Includes:
– Microenvironment: actors close to the company
that affect its ability to serve its customers.
– Macroenvironment: larger societal forces that
affect the microenvironment.
• Considered to be beyond the control of the
organization.
Actors in the Microenvironment

COMPANYSUPPLIERS
ITSELF
MARKETING
INTERMEDIARIES

PUBLICS
CUSTOMER
S
COMPETIT
ORS
 The Company’s Internal Environment

• Company’s Internal Environment:

– Areas inside a company.
– Affects the marketing department’s planning
strategies.
– All departments must “think consumer” and
work together to provide superior customer
value and satisfaction.
 The Company’s Microenvironment

• Suppliers:
– Provide resources
needed to produce
goods and services.
– Most marketers treat
suppliers like partners.
 The Company’s Microenvironment

• Marketing Intermediaries:
– Help the company to promote, sell, and distribute its
goods to final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
Partnering With Intermediaries

Coca-Cola provides
Wendy’s with much more
than just soft drinks. It
also pledges powerful
marketing support.
The Company’s Microenvironment

• Customers:
– Five types of markets
that purchase a
company’s goods and
services
 The Company’s Microenvironment

• Competitors:
– Those who serve a target market with products and
services that are viewed by consumers as being
reasonable substitutes
• Publics:
– Group that has an interest in or impact on an
organization's ability to achieve its objectives
Types of Publics
 The Macroenvironment
• The company and all of the other actors
operate in a larger macroenvironment of
forces that shape opportunities and pose
threats to the company.
The Company’s Macroenvironment
 Environmental Sectors(Gen)
• The general environment is classified into the
sectors
 Political environment

It consists of factors in government, the law and

regulatory system. Political environment of a
country decide the political ideology
 Political Ideology of Govt.
 Political stability in the Economy.
 Foreign Policy of Govt.
 Defence & Military Policy.
 Centre state relationship.

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 Economic Environment:
• It is a factor concerned with the means of
production and distribution of wealth .
 Nature of economy: high income, middle income and
low income
 Structure of economy: primary , secondary , tertiary
 Economic policies: Industrial policy, trade policy
,monetary policy, fiscal policy
 Economic Conditions: boom , recession
 Income Distribution

Walt Disney markets two distinct Pooh bears to match its two-tiered
market.
 Social and cultural environment

D. Social and cultural environment: social and

cultural aspects of a society form its very
nature. How we behave, our relationships,
gender and ethnic group, our education and
the community in which we live in and how
we feel about ourselves are the elements of
social environment.
• Made up of attitude, desires, expectations,
education, beliefs & customs of people
• Changes gradually
• To forecast a change is difficult 21
 Socio-Cultural Environment
 Urbanization
 Religion
 Tastes & Preferences
 Customs & Tradition in Society
 Health & Quality of Life
 Language
 Demographic environment

Demographic environment : it refers to the

environmental factors concerning size, structure
and distribution of population. It further has
several sub factors:
a) Gender Differences: male and female products
b) Occupation: salaried people different from private
class
c) OTHERS :Age structure, Income distribution,Family size,Education, Social
class, Religion, Race, Nationality

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 Technological environment
E Technological environment: Consists of
factors related to knowledge applied to the
material and machines used in production of
goods and services
1. Sources of technology-company , external or
foreign
2. Cost of technology and transfer of technology
3. Technological development, rate of change of
technology
4. Impact of technology on human beings
Technological Environment

• Most dramatic
force now
shaping our
destiny.
 Technological Environment

• Changes rapidly.
• Creates new markets and
opportunities.
• Challenge is to make
practical, affordable
products.
• Safety regulations result in
higher research costs and
longer time between
conceptualization and
introduction of product.
 Legal environment

Legal environment: it consists of all legal factors

that govern the activities of business from pre-
formation stage till its closure. Generally a business
needs to understand country law only but in case
of foreign deals foreign laws must be understood.
Legal policies- formulation & implementation
Constitutional framework-directive principles,
fundamental rights, legislative powers of centre and
state
Policies related to licensing, financing of industries and
export import
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 Business Environment

• Global environment: it refers to those

international factors which are relevant to
business such as WTO principles and
agreements, other international conventions,
treaties, agreements, protocol etc

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 Natural Environment

• Involves the natural

resources that are
needed as inputs by
marketers or that are
affected by marketing
activities.
Factors Impacting the Natural Environment

Shortages of Raw Materials

Increased Pollution

Increased Government Intervention

Environmentally Sustainable Strategies

 Environmental Responsibility

McDonald’s has made a substantial commitment to the so-called “green

movement.”
 faq
• Macroenvironment?
• Fcators of Macroenvironment?
• Political Environment
• Social Environment
• Cultural Environment
• Supplier Environment
• Competitor
• Microenvironment
• Task/general Environment
 references
• Armstrong G., Adam S., Denize, S. and Kotler P.
(2012) Principles of Marketing, 5th Edition,
Sydney, Pearson/Prentice Hall., pp. 76-79
• Armstrong G., Adam S., Denize, S. and Kotler P.
(2012) Principles of Marketing, 5th Edition,
Sydney, Pearson/Prentice Hall., pp. 79-100