Marketing Environment Analysis

Analyzing the Marketing Environment

• A company’s marketing environment consists of

actors and forces outside marketing that affect
marketing management’s ability to build and
maintain successful relationships with target
customers.

Companies need to constantly watch and adapt to

the changing environment.
• Marketers need to be environmental trend trackers and
opportunity seekers.

2 special aptitudes of Marketers which equip

them for the task :

• Major tools : Marketing research and Marketing

intelligence.

• Time spent in customer and competitor environments.

 Marketing Information System ( MIS)
A MIS consists of people, equipment and procedures to gather,

sort, analyze, evaluate, and distribute needed, timely and accurate

information to marketing decision makers.

It relies on :

• Internal company records

• Marketing intelligence activities

• Marketing research
 Internal Records

• The Order – to payment Cycle

• Sales Information Systems

• Databases ( Customer, product and salesperson combined)

• Data Warehousing and Data Mining

 Sources of the MIS

• Sales force
• Distributors, retailers and other intermediaries
• Hiring of external experts to collect intelligence
• Network internally and externally
• Customer Advisory panels
• Government data
• Outside suppliers like Ac Nielsen- ORG MARG or TAM Media
Research
 Marketing Intelligence from the Internet

• Customer Goods and Services Review Forums

• Distributor or sales Agent feedback sites

• Combo sites giving customer reviews & expert opinions

• Customer complaint sites

• Public blogs
 Marketing Environment

Micro environment : Company, suppliers, marketing

intermediaries, customer markets, competitors and publics.

Many of these actors can be controlled /influenced by the

company with its own actions, and hence can also be called
controllable factors.
Macro environment : Consists of larger societal factors
that affect the microenvironment :

Demographic ,economic, natural, technological, political

and cultural forces which cannot be controlled by the
company , at least in the short run. These are the
uncontrollable factors.
 The Company’s Microenvironment

Marketing Management’s task is to build

relationships with customers by creating customer
value and satisfaction.
 Major actors in the Marketer’s Microenvironment

To succeed marketers would need to build

relationships with :

Other company departments( Internal environment)

Suppliers ( Important link in the company’s value delivery

system)

Marketing intermediaries ( Resellers, physical

Distribution firms, marketing service agencies, and
financial intermediaries). Currently viewed as partners.
Customers ( Consumer markets, business
markets, reseller markets, Government markets,
international markets)

Competitors

Various publics constituting the company’s

value delivery network ( Financial, media,
government, citizen – action, Local, general,
internal)
The Company
 Suppliers

They provide the resources needed by the company to produce

goods and services. Supplier problems can seriously affect
Marketing. Marketing Managers must watch supply
availability and costs.

Supply shortages or delays, labour strikes and other events

can cost sales in the short run. Rising supply costs may force
price increases that can harm the company’s sales volumes.

Today suppliers are treated as partners in creating and

delivering customer value.
 Marketing Intermediaries

• Marketing intermediaries help the company to

promote, sell, and distribute its goods to final buyers.

• They include resellers, physical distribution firms,

marketing services, agencies, and financial
intermediaries.
• Resellers are distribution channel firms that help the company
find customers or make sales to them.

• These include wholesalers and retailers, who buy and resell

merchandise. Selecting and working with resellers is not easy.

• No longer do manufacturers have many small, independent

resellers from which to choose. They now face large and
growing reseller organizations. These organizations frequently
have enough power to dictate terms or even shut the
manufacturer out of large markets.
• Physical distribution firms help the company to stock
and move goods from their points of origin to their
destinations.

• Working with warehouse and transportation firms, a

company must determine the best ways to store and
ship goods, balancing factors such as cost, delivery,
speed, and safety. 
• Marketing services agencies are the marketing
research firms, advertising agencies, media firms,
and marketing consulting firms that help the
company target and promote its products to the right
markets.

• When the company decides to use one of these

agencies, it must choose carefully because these
firms vary in creativity, quality, service, and price.
 
• Financial intermediaries include banks, credit
companies, insurance companies, and other
businesses that help finance transactions or insure
against the risks associated with the buying and selling
of goods.

• Most firms and customers depend on financial

intermediaries to finance their transactions.
• Like suppliers, marketing intermediaries form an
important component of the company's overall value
delivery system. In its quest to create satisfying
customer relationships, the company must do more
than just optimize its own performance.

• It must partner effectively with marketing

intermediaries to optimize the performance of the
entire system.
• Today's marketers recognize the importance of working
with their intermediaries as partners rather than simply
as channels through which they sell their products.

• For example, Coca-Cola signed a 10-year deal with

Wendy's that will make Coke the exclusive soft drink
provider to the fast-food chain, picking up more than 700
Wendy's franchises that were previously served by Pepsi.

• In the deal, Coca-Cola promised Wendy's much more that

just its soft drinks. It pledged the powerful marketing
support that comes along with an exclusive partnership
with Coke.
Pros and cons of franchising ?
 Customers

• The company needs to study its customer markets

closely. There are five types of customer markets:

•  Consumer markets consist of individuals and households

that buy goods and services for personal consumption.

• Business markets buy goods and services for further

processing or for use in their production process,
whereas reseller markets buy goods and services to resell
at a profit. 
• Government markets are made up of government agencies
that buy goods and services to produce public services or
transfer the goods and services to others who need them.

•  International markets consist of these buyers in other

countries, including consumers, producers, resellers, and
governments. Each market type has special characteristics
that call for careful study by the
Types of Customer Markets
 Competitors
• The marketing concept states that to be successful, a
company must provide greater customer value and
satisfaction than its competitors do.

• Thus, marketers must do more than simply adapt to

the needs of target consumers. They also must gain
strategic advantage by positioning their offerings
strongly against competitors' offerings in the minds
of consumers.
• No single competitive marketing strategy is best for all
companies. Each firm should consider its own size and
industry position compared to those of its competitors. Large
firms with dominant positions in an industry can use certain
strategies that smaller firms cannot afford.

• But being large is not enough. There are winning strategies for
large firms, but there are also losing ones. Small firms can
develop strategies that give them better rates of return than
large firms enjoy.
Publics
 Publics

The company's marketing environment also includes

various publics. A public is any group that has an
actual or potential interest in or impact on an
organization's ability to achieve its objectives.

There can be 7 kinds of publics

Financial publics: influence the company's ability to

obtain funds. Banks, investment houses, and stockholders

are the major financial publics. 

Media publics: carry news, features, and editorial opinion.

They include newspapers, magazines, and radio and

television stations. 
Government publics: Management must take government

developments into account. Marketers must often consult the company’s

lawyers on issues of product safety, truth in advertising, and other matters. 

Citizen action publics :A company's marketing decisions may be

questioned by consumer organizations, environmental groups,

minority groups, and others. Its public relations department can help it stay I

n touch with consumer and citizen groups. 

Local publics: include neighborhood residents and community organizations.

Large companies usually appoint a community relations officer to deal with the

community, attend meetings, answer questions, and contribute to worthwhile

causes. 

General public: A company needs to be concerned about the general public's

attitude toward its products and activities. The public's image of the company

affects its buying. 

Internal publics: include workers, managers, volunteers, and the board of

directors. Large companies use newsletters and other means to inform and

motivate their internal publics. When employees feel good about their

company, this positive attitude spills over to external publics

The Company’s macroenvironment
 Analyzing the Macroenvironment
Successful companies recognize and respond profitably
to unmet needs and trends and distinguish between a:

Fad : Unpredictable, short lived and without social,

economic and political significance eg The Rubix cube,
the Hula Hoop

Trend : More predictable and durable than a fad.

eg A trend towards health.

Megatrend : A large. social, political and technological

change. Slow to form but a 7 -10 year movement .eg
Urbanization
 Putting it all together through an example

• Explosive population growth ( demographic) leads to

more resource depletion and pollution ( natural)
which leads consumers to call for more laws
( political – legal), which stimulates new
technological solutions and products (technological)
that, if they are affordable, ( economic) may actually
change attitudes and behaviour ( socio – cultural)
The External Environment
The Company’s Macro and Microenvironment
 PESTLE Analysis (Video )

• Political

• Economic

• Socio Cultural

• Technological

• Legal

• Environmental
 Demographic Environmment

• Demography is the study of human

populations in terms of size, density, location,
age, gender, race, occupation, and other
statistics.

• The demographic environment is of major

interest to marketers because it involves
people, and people make up markets.
• The world population is growing at an explosive rate.
It now totals more than 6.8 billion people and will
exceed 8.1 billion by the year 2030. Major
contributors are countries in the Indian sub continent.

• The explosive world population growth has major

implications for business. A growing population means
growing human needs to satisfy.

• Depending on purchasing power, it may also mean

growing market opportunities. However, the world’s
large and highly diverse population poses both
opportunities and challenges.
 Implications for business

Changes in the world demographic environment have major

implications for business. Eg in China where government regulation 25
years ago ( in order to combat skyrocketing population ) restricted
families to one child each.

This had resulted in the creation of little emperors and little empresses
doted upon owing to the “six pocket syndrome”– attention and luxuries
showered upon them by 2parents and 4 doting grandparents.
 Consequences

• “China’s birth-rate is too low and needs to rise as the

nation faces serious challenges including a shrinking
labour force and rapidly ageing population”, the
government said in a blueprint outlining population
policies up to 2030.
 Change in Policy

The easing of the one-child policy, which was amended in early

2016 to allow all Chinese families to have two children, helped
push the number of births in the country to 17.86 million in 2016,
an increase of 7.9 percent over 2015, according to state media
reports citing China's National Health and Family Planning
Commission. The figure was the highest since 2000.
• The Indian subcontinent also has a proportionately large
population of children. In Pakistan young people 14 years
and younger comprise close to 40% of the population, out of
which nearly 14% are 4years old or younger.

• There is a 173 million strong young people presence as a

business opportunity for Marketers. Thus, P & G launched its
world famous disposable diapers brand in Pakistan in Aug
2000. At that time cloth nappies were in general use.
 P & G’s strategy was :

a ) Directed towards mothers of new - borns through hospital

education programmes.

b) Since a significant percentage of births were in homes

instead of hospitals, Pampers also tried to reach families that
lived in low income, hard to reach areas through mobile
clinics that provided baby care education.

The strategy has been highly successful and P& G has

garnered significant market share.
• Thus, Marketers keep close track of demographic
trends and their markets, both at home and abroad.

• They track changing age and family structure,

geographic population shifts , educational
characteristics, and population diversity.
 Important demographic trends in the sub
continent

• Increasing population

• A Growing middle class

• Growth in the Rural population

• A Changing family system

• The changing role of women

• A better educated, more white collared , more

professional population

• Increasing diversity
 Increasing population

• Main characteristic of the Asian population is the rapid

growth in the urban population. According to Haruhiko
Kuroda, President of the Asian Development Bank.

• 1.1 billion people in Asia will move to cities in the next

20 years .He adds that by 2030 half of the population of
the continent will live in cities.
In India nearly 2/3rds of the total population increase over the
next 20 years will occur in urban areas. The population in
urban areas will rise from 29 % today to 37 %.( From 318
million to 523 million).

Urban India is already more populous today than the US and

will exceed the current population of the EU by 2025.
 A growing middle class

The Indian population consists of several income

groups divided in to 5 by Mckinsey Global Institute
( MGI) based on their real annual disposable incomes

( Study made in 2007)

• Deprived households ( Annual disposable income ( ADI)
of less than 90,000 per annum)

• Aspirers ( ADI between 90,000 to 2,00,000)

• Seekers ( ADI between 2,00,000 to 5,00,000 )

• Strivers ( ADI between 5,00,000 to 10,00,000)

• Global Indians ( Over 10,00,000 )

• Deprived households : Poorest economic class. Mostly
unskilled or semi – skilled workers working on daily wages,
may not have all year round employment.

• Aspirers : Spend almost half their income on basic necessities.

Small time retailers, small farmers, and low- skilled industrial
workers.

• Seekers : White collar employees, mid-level government

officials, newly employed young post graduates, medium –
scale traders and business people.
• Strivers : Established professionals like lawyers, CAs, MBAs,
senior government officials, medium scale industrialists in
towns, rich farmers in villages.

People in this category and above are generally considered

successful and well – established in Indian society. They have
a stable source of income and amenities or luxuries such as
their own home, car, TV, refrigerator and air- conditioner at
home.
• The middle class is defined as a combination of Seekers and
Strivers falling between the income bracket of 2,00,000 to
10,00,000.

• The middle class consists of 7 million households today and is

forecasted to have 87 million households by 2025. These
households are enjoying an increase in annual income by 4.9
per cent. If an Average household is pegged at 4.4 family
members this adds up to 384 million people.
• Global Indians : This is the creamy layer and consists of senior
corporate executives, large business owners, topmost
professionals, politicians, film actors and big farmers.

• Of late this has been joined by upwardly mobile mid- level

executives of MNCs , investment bankers, and graduates from
IITs and IIMs. Made up of globe trotters who enjoy a very high
standard of living.
 Home exercise for all groups

Research and update the classification given by Mc

Kinsey in 2007 in 2 slides:

a) Re – classify /Re- name groups as well as incomes

(if you feel it necessary) to make it a useful
segmentation for today’s Indian Marketer

b) Justify your grouping/income

One team member to present in next Monday’s class

 Rural Population

• India has about 639,000 villages where 743 million people

reside accounting for about 72% of India’s population.

• About 62% of villages have less than 1000 people. And only 3
% have a population of more than 5000 people.

• Most villages with less than 500 people do not have any
shops.

• Young adults between 20 -35 constitute 25 % of the rural

population and the age group 5 to 14 accounts for another
25%.
 Growth in the Rural population

• The MGI Consumer demand model has forecasted that the

population in Rural India will be 906 million by 2015.

• The demand in Rural India is expected to grow at an annual

compound rate of 5.1% during the next 15 years.

• By 2025, rural consumption will nearly triple creating a

market of over 26 trillion rupees. This BOP will see
consumption growth on a per household basis.
 Main constraint for Marketers in Rural Markets

The main constraint for Rural Marketers Is not purchasing power

alone but a combination of several other factors such as lack of
proper infrastructure such as roads and telecommunication
connectivity, reliable supply of electricity which affects
distribution infrastructure such as cold storage.
• With G.O.I developing this infrastructure the rural market will
come closer to the urban market. There are similar challenges
for marketers in Pakistan and Bangladesh.

• Unilever subsidiaries have drawn on successful elements of

Project Shakti of HUL in India empowering women
entrepreneurs and launched similar programmes in these
countries.
 A Changing family system

• Today’s India is rapidly abandoning the traditional joint

family system, partly out of necessity. Both husband and
wife work. They may not live with their parents.

• The nuclear family takes the help of baby sitters and

crèches to look after the kids when parents are out
earning. The dual income single kid ( DISK) family has
created a dent in the social fabric of Indian society.
• The + ive side is the increase in family income and hence
increase in consumption and demand. The young couple, no
longer supervised, have freedom and can eat whatever they
want and spend in whichever way they wish to, living life
their own way.

• India has moved into an era where the wife and mother – in -
law are both working and may no longer be available to the
new generation of kids in the family.

• Also, the husband and wife , both being career – oriented,

marriages have become more fragile. As a result, the urban
nuclear family is splitting
• Growing number of nuclear families has led to the problem of
old, retired and sometimes invalid parents. Young couples ,
busy making their own careers, either in the country or abroad
are too busy to look after their parents.

• Thus, how to take care of the rising number of older people is

emerging as a major concern. (Only 4% of the 80 million Indians
aged over 60 receive a pension).
 The changing role of women

• Till 3 decades ago the primary role of women in the

subcontinent was to look after the house. Very few
would study beyond high school and complete their
graduation .Today more and more women, even in rural
India, are completing graduation and even post-
graduation.

• Women have emerged to work shoulder to shoulder with

men in education, companies, space research
organizations , banks etc. Many women head
organizations.
A better educated , more white collared , more professional
population

Provision of education has been one of the topmost priorities and

social objectives of GOI.As a result of government spending, the
Indian population is becoming better educated.

This increase in number of educated people will increase the

demand for quality products, books, magazines, travel, personal
computers, mobile phones and Internet services.

The workforce is also becoming more white collar . Job growth is

now strongest for professional workers and weakest for
manufacturing workers.
 Increasing Diversity

• Countries vary widely in their ethnic and racial make –up. The
US is a melting pot of many nationalities and cultures. In
contrast Japan has almost all Japanese.

• With increasingly diverse markets, most large companies are

targeting specially designed products , ads and promotions to
one or more ethnic groups.
 Political and Social Environment

• The political environment consists of laws,

government agencies and pressure groups that
influence or limit various organizations and
individuals in a given society.

• Owing to ever increasing globalization companies are

now affected by the socio-political environment not
only of their own country but also of other countries
with whom they trade.
 Economic Environment

Economic environment consists of factors that affect

consumer purchasing power and spending patterns :

• Industrial economies are richer markets

• Subsistence economies consume most of their own

agriculture and industrial output.

• In between are developing economies which can offer

outstanding marketing opportunities for the right kinds of
products.
• India’s growing middle class and rapidly rising incomes make it
an attractive market for many. European, North American and
Asian automakers are introducing smaller, more affordable
vehicles in India since only 1 in 7 Indians owns one.
• The last few years have seen many ups and downs in the
economic landscape of the world and also in countries in the
Indian subcontinent.

• The global financial crisis of 2007-2009 swept away many of

the gains made by economies in several years of steady
growth. These economic trends have impacted heavily on the
consumption of goods and services across the subcontinent.
 Major economic events and trends

• The US economic crisis of 2007-2009 was triggered off by

subprime housing loans extended by overambitious bankers
to consumers who did not have the capacity to service them.

• When real estate prices collapsed in the US many customers

defaulted on these loans. Many of these loans had been
repackaged by banks and sold onwards to investment
bankers, insurance companies and other financial institutions
in the US and also all over the developed world.
• These eventually led to the collapse of Wall street icons such
as Lehman Brothers , Merrill Lynch and others. Some like AIG
were bailed out by huge injections of money from the US
government.

• Most stock markets in the world including the Indian

subcontinent crashed and lost billions of rupees in
capitalization. Banks stopped lending and there was a huge
liquidity crunch. Ford , General Motors received bailouts from
the US Government. But the developed world went into a
major recession.
 When America sneezes the rest of the world catches a cold

Countries like Pakistan, Sri Lanka and the Maldives were most hit.
India with a robust economy fared better. Even so demand for
housing, construction ,IT, and consumer durables was hurt. GDP for
2008 was downgraded two points to 7 percent and forecasts for
2009 were pegged at5 %.

This significant drop in GDP growth rates in the subcontinent has

impacted the consumption of many products and services.
• However, these Governments have successfully used fiscal
and monetary instruments to revive their economies.

• Marketers brought in new low- priced versions of their

products , providing trade and customer discounts and by
using finer segmentation and targeting of consumers. Citibank
in Pakistan lost buyers for its very successful consumer credit
portfolio. In the US even Apple sales growth and stock
performance took a beating.
Changing Income Distribution and Consumer spending patterns

• Food, housing and transportation use up the

maximum household income. But consumers at
different income levels have different spending
patterns, noticed by Ernst Engels about a century
and a half ago. Engels studied how people shifted
their spending as their incomes rose.
• Engels found that as family income rises the percentage spent
on food declines .

• The percentage spent on housing remains the same ( Except

for utilities such as gas, electricity, and public services, which
decrease)

• Both the percentage spent on most other categories and that

devoted to savings increase. Engel’s Laws ( 1857) have been
generally supported by late studies.
• Prior to the recent global crisis many sub continent countries
were enjoying an enviable economic development. They are
expected to regain their earlier pace of development in a few
years. The sustained growth has changed the income
distribution of household significantly, giving rise to a growing
and more affluent urban middle class.

• In Pakistan, as well as India, the distribution of income has

led to a tiered market. ( Thus Mercedes Benz eyes the
moneyed class, Tata Motors targets those with modest
means. The Nirmas and the Ghadis go for the least affluent
sections).
 SOCIO - CULTURAL ENVIRONMENT

• The socio -cultural environment is made up of

institutions and other forces that affect a society’s
basic values, perceptions, preferences and
behaviours.
 Major trends observed today

• Persistence of core beliefs and values passed on from

parents to children .Eg Most Asians believe in working, getting
married, giving to charity and have strong faith in religion.

• These beliefs are and reinforced by schools, religious

institutions, business and government.
• Secondary beliefs and values are more open to change.

• Thus believing in marriage is a core belief. Getting married

early is a secondary belief.

• Or believing in religion is a core belief. Believing your dress

must reflect your religosity is a secondary belief.
•
• Marketers have some chance of changing secondary
beliefs but very unlikely to change core beliefs.

• Thus a family planning marketer would argue more

effectively that people should marry late rather than
not get married at all.
 Shifts in Secondary Cultural Values

• In India colonial rule left its imprint upon dress codes,

leisure activities, and job preferences.

• In addition, exposure to T.V., cinema , books and

magazines has had its effect cultural values and
outlook of younger people in the subcontinent.
 Other opportunities for Marketers

A ) People’s views of themselves

Eg For one who considers himself an adventurous

type, Master Card says” There are some things in life

that money can’t buy. For everything else there’s

Master card”.
B) People’s views of others - tendency to” cocoon” has been
noticed in past decades. People don’t want to go out so much
with others. They want to enjoy home comforts from a
networked home office, to home entertainment centres, to
finding a quiet spot to plug into their iPods while they check
into their favourite web hangouts.

Thus DVD players, broadband, video games, Netflix, Prime

Video have proliferated. Less demand for theatre going and
greater demand for home improvement.
C) People’s views of Organizations

Many people see organizations not as a source of satisfaction

but a necessary chore to earn money to enjoy their non work
hours. Hence organizations need to find new ways to win
consumer and employee confidence through marketing
themselves better.

“Customer engagement” is the new mantra

D) People’s View of Society eg Marketing keeping the

patriotic angle in mind eg done by political parties,
Bollywood films and Marketers using Independence day
themes, channels etc.
E) People’s View of Nature - eg Marketing natural,
organic, nutritional products, fuel efficient cars and
alternative to those following Lifestyles of Health and
Sustainability ( LOHAS.)

F) People’s View of the Universe : Renewed belief in

spirituality , yoga etc. Affects Books that people read
and services they buy. Also permeates TV. Eg Baba
Ramdev ,Aaastha channel
• Changes in tariffs , quotas,or even sentiments of civil society
might have a direct impact on their profitability or even
survival.

• Marketers need to be keenly conscious of the changing

sociopolitical environment to seek out opportunities and
handle potential threats.
 Technological Environment

• The technological environment is the most dramatic force

now shaping our destiny.

• Take antibiotics, robotic surgery, miniaturized electronics,

laptops and the Internet to name a few wonders.

• On the dark side, nuclear missiles, chemical weapons,

assault rifles.

• Also, technology has given us mixed blessings such as the

automobile, TV, credit cards.
• Our attitude towards technology rests upon whether we are
more impressed with its wonders or blunders.

• RFID .( Radio frequency identification) is the new kid on the

block). This can be embedded in the products you buy.
Beyond benefits to consumers – such as showing product
deals, suggesting accompanying for his use, totalling his
purchases and automatically charging them to his credit card.

• Scanning the RFID chip also gives producers and retailers an

amazing way to track their products electronically anywhere
in the world.
• New technologies create new products and
opportunities. However, every new technology
replaces an older technology.

• Transistors hurt the vacuum tube industry xerography

hurt the carbon paper business

• CDs hurt phonograph records

• Digital photography hurt the film business.

• When old industries fought or ignored new technologies, their
businesses declined. Thus modern marketers must keep a
hawk eye on the technological environment.

• Companies that do not, will find soon their products updated

and they will miss new product and market opportunities
• Today’s research is carried out by research teams not by lone
inventors. Many companies are adding marketing people to R
&D teams to obtain a stronger marketing orientation.

• The challenge in any innovation is to make it not only

technical but commercial. – to make it a practical, affordable
version of the product
As products and technology become more complex the public
needs to know these are safe. Thus government agencies
investigate and ban potentially unsafe products. Eg in India, the
Food and Drugs Administration (FDA)has set up complex
regulations for testing new drugs.

The Consumer Protection Acts sets safety standards for

consumer products and penalizes companies that fail to meet
them. Hence higher research costs and longer times between
new product ideas and their introduction. Marketers need to be
aware of these while applying new technologies and developing
new products
 Legal Environment -Major trends

• The world including India has seen increasing legislation to

cover competition, fair trade practices, environmental
protection, product safety, truth in advertising, consumer
privacy, packaging and labeling, pricing and other important
areas.

• Overlaps between local , state and national laws make

interpretation of laws a difficult task. Also, regulations change
and marketers must keep abreast of these changes
 Broad purpose of laws

a) To protect companies from each other.

b) To protect consumers from unfair business

practices

c) To protect the interests of society against

unrestrained business behaviour.
 Various enforcement agencies exist

In the US you have federal regulatory agencies such

as :

• Federal State Commission

• Food and Drug Administration
• Federal Communication Commission
• The Federal Energy Regulatory Commission
• The Federal Aviation Administration
• The Consumer Product Safety Commission
• The Environmental Protection Agency
In India, food companies need special
approval to launch duplicate brands, such as
another cola drink or a brand of rice.

A legislation passed in 2001 makes it

mandatory for packaged food manufacturers
to have green dots and red dots on vegetarian
and non vegetarian products respectively
Thus Marketers need to know about major laws
protecting competition consumers and society. They
need to understand these laws at the local, state,
national and international levels.
 Non Tarrif barriers in trade

• Although WTO has been very active in reducing tariff

and non tariff barriers in international trade,
pressures from civil society groups in the developed
world have resulted in a set of hurdles for companies
operating in the sub continent.

• This is in the form of social compliance regulations

which exporting companies have to adhere to.
• These do not take into account the ground realities
of developing countries and also increase costs for
them .

• They also indirectly hurt the intended beneficiaries.

Marketers must pre – empt the concerns of
international buyers before a crisis situation is
reached.
 NATURAL ENVIRONMENT
• The natural environment includes the natural resources that are
needed as inputs by marketers or that are affected by marketing
activities.

• Industries cluster in a region based on natural resources.

Concentration of industries can be a cause for concern and a
threat to the environment.

• Air and water pollution have reached dangerous levels in many

cities round the world. World concern continues to escalate
about possibilities of global warming and many
environmentalists fear we will soon be buried under our own
trash.
 Trends in the Natural Environment

• Shortages of raw materials

• Increased pollution

• Increased government intervention

 Green movement

• Concern for the environment has spawned the so

called Green Movement. Companies are today
developing strategies and practices that support
environmental sustainability – an effort to create a
world economy that the planet can support
indefinitely.

• Eg, GE uses “Ecomagination” to create products for a

better world- cleaner aircraft engines, cleaner
locomotives, cleaner fuel technologies.
• Other companies are developing recyclable or bio-
degradable packing, recycled materials and
components, better pollution controls and more
energy efficient operations. eg HP is pushing
legislation to force recycling of old TVs, computers
and other electronic gear.

• Companies are today looking to do more than just

good deeds. They increasingly recognize the link
between a healthy ecology and a healthy economy.
They are learning that environmentally responsible
actions can also be good business.
Ethics in the Environment : Increased emphasis on
Ethics and socially responsible action

Many companies are today encouraging their

managers to look beyond what the regulatory system allows
and simply “do the right thing”.

Many industrial and professional trade organizations have

suggested codes of ethics and companies have developed
policies and guidelines for complex social responsibility
issues.

With internet marketing and tele calling privacy issues have

also come into play. Consumer advocates and policymakers
have also stepped into the picture to deal with these.
 Cause related Marketing

• To exercise social responsibility and build more positive images

many companies have linked themselves to worthwhile causes.

Eg :

Buy a pink mixer from Kitchen Aid and support breast cancer

Purchase Ethos water from Starbucks and help children round

the world.

• Purchase CRY cards and money will be used for the protection of
children’s rights
 Cause related marketing

Has stirred some controversy. Critics claim that Cause

related marketing is more a strategy for selling than a
strategy for giving. However, if handled well , cause related
can greatly benefit both the company and the cause.

The company gains an effective marketing tool while

building amore positive public image. The charitable
organization or cause gains greater visibility and important
new sources of funding and support.
 Moral of the story

• While a company would have little success in trying

to influence geographic population shifts or the
economic environment or major cultural values, a
smart marketing manager will take a pro-active
rather than a reactive approach to the marketing
environment