ENVIRONMENT

ENVIRONMENT AND YOU

BUSINESS
Goal Oriented Entity
Economic Performance
Profitability
Social Performance
Satisfaction of all interested parties
The Dynamic Marketing Environment

MARKETING
ENVIRONMENT
BUSINESS
Dynamic
Strategy
Continuous
monitoring
Evaluating Strategy
Redesign
ENVIRONMENT
Dynamic
Complex
Business cant act as a
closed system
Internal Factors &
External Factors
Elements of a Modern Marketing
System
Marketing presents a never ending
series of threats and opportunities
The Marketing Manager major task is
that of trend trackers and opportunity
seekers
- Changes in Computer Hardware/Software
- Changes in Consumer Durables
- Car Industry etc.
A Marketer has to design their
marketing strategy based on the
current marketing environment

ENVIRONMENTAL SCANNING
Environmental analysis
Extensive insight
Current market conditions
Impact of external factors that are
uncontrollable by the marketers
Nature of Marketing Environment
All the actors and forces influencing the
companys ability to transact business effectively
with its target market.

Includes:
Micro environment - forces close to the
company that affect its ability to serve its
customers.
Macro environment - larger societal forces
that affect the whole microenvironment.

The Marketing Environment
Company
Demographic
Economic
Natural
Technological
Political
Cultural
Company
Customers
Intermediaries
Suppliers

Competitors
Publics
The Microenvironment
Company
Customers
Publics
Suppliers
Competitors
Intermediaries

Forces Affecting a
Companys Ability to
Serve
Customers

The Microenvironment
Companys Internal Environment- functional
areas such as top management, finance, and
manufacturing, etc.

Suppliers - provide the resources needed to
produce goods and services.

Marketing Intermediaries - help the
company to promote, sell, and distribute its
goods to final buyers.

Customers - types of markets that purchase
a companys goods and services.

Competitors - those who serve a target
market with similar products and services.

Publics - any group that perceives itself
having an interest in a companys ability to
achieve its objectives.

The Macroenvironment
Demographic
Technological
Cultural
Economic
Political
Natural



Forces that Shape
Opportunities
and Pose Threats
to a Company



Demographic - monitors population in terms of
age, sex, race, occupation, location and other
statistics.

Economic - factors that affect consumer buying
power and patterns.

Natural - natural resources needed as inputs by
marketers or that are affected by marketing
activities.

Technological - forces that create new product
and market opportunities.

Political - laws, agencies and groups that
influence or limit marketing actions.

Cultural - forces that affect a societys basic
values, perceptions, preferences, and behaviors.

The Macroenvironment
Demographic Environment
Size of the population
Its geographic distribution
Density
Mobility trends
Age Distribution
Birth
Marriages

The Macroenvironment
Key Demographic Trends
Changing household
Geographic population shifts
Better-educated, more private
workforce
Increasing Diversity
Indias Demographic Time Bomb
Every minute birth of 54 babies
Every week a population of
Chandigarh is added
Every eighth month one Australia is
added

The teenagers Market and working womens
market have created enormous marketing
opportunities in India

Examples: Mobile Phones, Twowheelers,
Cosmetics, Fast Food, Ready to Eat &
Electronics
The Macroenvironment
The Economic Environment
Consists of factors that affect consumer
purchasing power and spending patterns
Total buying power is a function of
current income, prices, savings, and credit
availability
The monetary policy changes, prevailing
interest rates, business cycles, changes in
income levels
Marketers should be aware of four main trends
in the economic environment:
Slowdown in real income growth
Continued Inflationary pressure
Low savings
Changing Consumer Expenditure Pattern
The Macroenvironment
The Natural Environment
Concern for the natural environment has grown
steadily, increasing the importance of these
trends:
Shortage of raw materials
Increased pollution
Increased governmental intervention

The Macroenvironment
Key Technological Trends
The technological environment is
characterized by rapid change.
New technologies create new
opportunities and markets but make old
technologies obsolete.
The U.S. leads the world in research and
development spending.

The Macroenvironment
The Political Environment
Includes laws, governmental agencies, and
pressure groups that impact organizations and
individuals. Key trends include:
Increased legislation to protect businesses
as well as consumers.
Changes in governmental agency
enforcement.
Increased emphasis on ethical behavior and
social responsibility.
The Macroenvironment
The Cultural Environment
Is composed of institutions and other
forces that affect a societys basic values,
perceptions, preferences, and behaviors.
Culture can influence decision making.
Core beliefs are persistent; secondary
cultural values change and shift more
easily.
The cultural values of a society are
expressed through peoples views.
Cultural values are expressed
via how people view:
The Macroenvironment
Themselves
Others
Organizations
Society
Nature
The Universe
Responding to the Marketing
Environment
Reactive: Passive Acceptance and
Adaptation
Companies design strategies that
avoid threats and capitalize upon
opportunities.
Proactive: Environmental Management
Responding to the
Marketing Environment
Environmental Management
Perspective
Taking a proactive approach to
managing the microenvironment
and the macroenvironment to
affect changes that are favorable
for the company.