Marketing Environment and Marketing System

Introduction: The environment consists of various forces that affect the company’s
ability to deliver products and services to its customers. There is Microenvironment
which consists of suppliers, distributors, customers, and competitors and Macro
environment consist of technology, trend, thinking, needs, and government. If any of the
factors go against it can be affected adversely.

Economic Forces: There are economic factors like:

Income: It is the most important factor also it determines the ability to buy. There has
been a recent increase in the dual earning families and hence the family income and the
buying power and demand has increased. Also, it has been experienced that higher the
income higher is the demand in life. Other factors also affect the spending like social,
cultural etc.

Inflation: It corresponds to an increase in the prices without the corresponding increase

in the wages resulting into lower purchasing power of consumer. Inflation rate decreases
the real wages also there is piling of goods by consumers to save them further. So, when
supply is low, demand is high also, because of the production costs sometime. Hence,
production system can constantly improve to have modernized output and improving the
efficiency and lowering the inflation.

Recession: It is a period when economies start to slow down and income, employment,
production tend to fall. The main causes of recession are slowdown in the high-tech
sector, rising fuel prices, excessive consumer credit and terror attacks.

To counter Recession we should work on:

 Improve the existing product to introduce new ones.

 Postpone the purchase of new equipment
 Promote value for Top of the line product.
 Companies should offer high quality goods at reasonable prices also extend credit
to them.
Interest Rate: It reflects the rate at which the companies take loan from the banks. If the
interest rates are lower they can install cheap capital and are able to produce products and
services at a lower cost.

Exchange Rate: It is related to imports and exports of a country. When you export in a
larger quantity to earn more profits in the international market than the imports your
country’s currency tends to become stronger and than a currency rate is determined.
When the multinational companies move from abroad and establish in India the exports
become costlier to importer and the country grows.

Technological factors: A stronger technology can counter inflation and recession and
reduce production costs and the productivity improves with efficiency and improve
productivity.

Technology can have following:

Technologies for Nations: There has to be a lot of research and development for
designing and making new products and services efficient enough for running the country
in a developed way.

Technologies for product and services: Technology only has created businesses like
automobiles, railways, telephones, computers etc. and the upcoming and vibrant existing
technologies like nanotechnology, mobile, genetic engineering.
Technologies for Business Model: Dell Company Business model for example uses
internet to reach the customers effectively, efficiently, inexpensively and does all on the
e-buy facility. There are teams developed to handle many affairs like email, chat rooms,
video conferencing etc.

Social- Cultural Factors: It considers attitudes, values, lifestyle of a society the

individual lives in. The societies are constantly changing and they can make a product
redundant if the things are against the use of a certain product.

Values: It considers the values of the society. Hence, all the products which have not got
much societal tolerance are made redundant. Nowadays, all the customers are developing
modern global outlook and have started appreciating and working for multinational
companies as they are in a process day in day out to move to international location having
different parameters. The trend is that companies and the environment around them has
become very competitive including are the buyers and the services.

Time-Starved Customer: Today lives have become really busy at work and people are
migrating to having a quick and easy lifestyle for buying and looking the world around
like buying from small shops instead of looking from large retail store in a commercial
location. There is work-life balance being talked about and people as well as companies
and societies are working to maintain and work for it.
Multiple Lifestyles: It is about the multiple choices of individuals who go around and
make their choice for buying from different stores, malls, fast-food joints etc. Hence, it is
difficult for marketers to identify what mix of products and services will a person or an
individual buy from. All the companies work for improving the services of their offerings
to help them grow.

The Changing Structure of Families: The families are constantly changing in their
structures and people choose from growing number of products and services. There is an
increase in dual income families i.e that the husband had been working in a job but wives
have started working as well defining more income for the families which gradually
increase the buying power of the house-holds. More independent women are making
decisions and the buying patterns; purchasing behavior also is under a gradual change.

Demographic Factors: It is a study of people in terms of age, gender, race, ethnicity

and location.

Adolescents: They are the new-age teens. Their buying pattern is a marketer’s delight.
They buy all what new age youngsters buy today and are a profitable target market.

Youth: They come in the age of 20-30 years old and spend a lot as they earn on their own
and want a young lifestyle full of enjoyment, travel, work etc.

People in age from 35 to 45: This is an age group where there is more work pressure,
children of the individuals need a lot of care and growth, family needs a lot of attention,
and the buying is about quick and fast household requirements.

People between 45 to 60: This is an age group when a lot of effort is required to maintain
job spend and think about higher education of the children and also prepare a lot about
future retirement plans.

People above 60: In this age group the children grow up and help the parent individuals.
Many live in the families and many live separately in separate set up.

Political- Legal Environment: It is a set up in which a country’s political legal

environment is a challenge for the growing companies and they survive with a lot of
consideration to the environment. It includes political stability, government’s intervention
in the Business, constitutional provisions affecting Business, government’s attitude
towards business and foreign policies. Every aspect of marketing-mix are subjected to
laws and restrictions. Managers today need to be cautious and confident to maintain the
companies out of trouble. All these become a challenging part to maintain the Businesses
and the company’s decisions to keep up a good work in the area and locate them for long
time.

Competitive Environment: In a competitive world it is the number of companies that a

company faces and its interdependence in the industry. Competition is having the
governments favors the MNCs instead of the companies which are local as they give
them more in terms of trade. Technology is outdating a lot of businesses as email, video
conferencing; chat etc will hit the hotel and tourism of the nation badly as the people will
stop relocating themselves for things like meetings and interviews.

Country Analysis: It is an assessment of country’s Business Environment. It consists of

strategy (goals), context (detailed picture) and performance (in consideration to how
companies have performed recently).

Identification of Strategy: It consists of the Goals (national, political, social, economic)

and Strategies (policies such as economic, political, social, monetary, fiscal, trade,
exchange rate) that a government builds for its final implementation.

Context: It consists of country’s resources (human resources, physical capital, natural

capital and technological skills) and players (Government Agencies or Non Government
Agencies).

Rules of the Game: There are written and unwritten rules of the game or
implementations of the policies. Hence, the main aim is to maintain the order and
stability in all the interactions of the organizations.

Performance: It means the evaluation of the country on basis of some standard. The
standard can be performance and goals of the country. Some policies become
intentionally strong impacting than others. All through the country analysis is a tool
which analyses the situation of the country.

Marketing System: Companies have left the old traditional marketing system and have
come out to direct sales as well as distributors, retail sales as well as direct mail, direct
mail as well as direct sales. IBM and Apple computers went through a lot of changes in
the supply system for establishing the dominant system even when the new suppliers
have come into being and made their way to cheaper and efficient computers. A Hybrid
marketing system has been adopted by the companies enlisted above which means a
share beyond the high tech into older industries like fabrics, metal fabrication, office
supplies, insurance services. This is a step to manage costs and market coverage. When
the companies invest in the marketing Hybridized system conflict can become a
challenging task to avert.

Customer Characterization: They can be characterized upon the following ways:

 Size
 Order size
 Their individual Decision Making Process
 Marketing P’s and required expertise by the customers.
 Geography
 Product type

Company with a successful Hybrid Marketing System will establish the following:

 Design and Management of the Marketing System

 Construct channels, fundamental blocks of Marketing System
 Anticipate, recognize, communicate and contain the conflicts of the Marketing
System
 Balance the boundaries of customer segments and target markets (as they may be
too loose or too strict limits).
 It will form the policies and organizational structure for new channels to grow,
minimize conflicts and reinforce segment boundaries.
 For each customer segment exploit IT, Managerial tools.