Unit 2: Marketing Environment

Marketing Environment
Meaning
• The actors and forces outside marketing that
affect marketing management’s ability to build
and maintain successful relationships with
target customer.
• It is made of:
 Micro Environment(actors close to the
company)
 Macro environment(involves larger societal
forces)
 Micro Environment
Company
• Organization consists of BOD and functional
managers
• Marketing plans are drawn up as per the
philosophy of top management
• Marketing decisions like new products, expansion,
etc depend on the support of top management. It
depends upon finance, managerial skills,
organization’s strength and weakness.
 Micro environment
Company(ctd…)
• Marketing plans should be in harmony with
policies of other departments such as
production, purchase, finance, personnel, etc
• For ex: quality depends upon production
policies
• Advertising and sales depends on budget.
 Micro environment
Suppliers
• Supply raw materials, plant and equipment, HR and
technologies.
• There strategies affects ours.
• If they increase prices , we have to revise price
structure.
• Decisions like make or buy depends upon suppliers.
• Good relations are required for successful
marketing
 Micro environment
Intermediaries
• Wholesalers, retailers, agents, ware houses,
ad agencies, etc.
• This is a choice of channel of distribution.
 Micro environment
Customers
• Purchase requirements vary from customer to
customer
• Individual customers are influenced cultural,
social and psychological factors.
• They are large in number, scattered, poorly
informed, buy in small quantities and frequently
and are guided by personal considerations.
 Micro environment
Customers(ctd…)
• Industrial producers are limited in number,
geographically concentrated, buy large
amount.
• Dealers buy for resale
• Government buys for public welfare, defence,
etc.
 Micro environment
Competitors
• Supply similar products or substitute products
• Competitors adopt different actions for getting
greater share of markets.
 Micro environment
Public
• Financial public: financial institutions, investment
houses, insurance co.
• Govt. public
• Citizen action public: consumer organizations,
environmental groups, etc.
• General public
• Internal public: employees, board, labor unions,
• Media public
 Macro Environment
Economic
• Economic forces influence both marketers and
the consumers
Economic forces include:
• competition – monopoly, oligopoly
• Buying power
• Willingness to spend
Economic condition include:
• Economic development
• National income
• Standard of living
• Sate of agriculture
• Business cycles
• Price levels
• Interest level
• Fiscal policies
Marketers have to take into consideration the
changes taking place in agriculture and industry.
Demography
• Demography gives ‘consumer profile’
• It is the study of population in respect of its size,
density, location, age, race, occupation, marital
status, education, family composition, sex
composition etc.
• Education(illiterates, dropouts, matriculates,
graduates, professional degrees, post graduates)
• Mexico is a nation of young population
• Japan – ‘old generation’
• America was a ‘melting bowl’ now it is a ‘salad
bowl’
Demography(contd..)
• Changing demographics on subject of
marriage(divorcing and separating, choosing
not to marry, choosing to marry later, having
children and not marrying)
• Changing role of women
• Increasing diversity
• Growing middle class(urbanization, family
breakdown, working women)
• It helps in – market segmentation, demand
forecasting, determination of market potential.
Technology
• It has a definite impact on buyers and marketers
decisions
• It provides mechanical, physical and numerous
other processes which help in attaining higher
standard of living
• It has adverse effects like pollution,
unemployment, increasing crime rate etc.
• Marketers must be aware of new developments
in technology
• technological developments may put some
people out of business and at the same time,
open up new business opportunities to others
• Technology(contd…)
• For example: introduction of synthetic fabrics
drove away sheep raisers and cotton growers out
of business
• Improved standard of living and given leisure time
• Improved communication and transportation
• It has given wonders in health sector as well
• Most of the products we use today were not there
some years ago
• Organization need to closely watch the pace of
technology in production, communication,
packaging, etc.
• Natural and ecological factors
• These also affect the pattern of industries and
marketing
• Industries create pollution of water, air and
environment
• These days packaging in plastic bags and bottles
might create a lot of problems
• Some governments have banned the use of
plastic bags
Political and legal factors
• Marketing is influenced by monetary , fiscal,
import and export policies.
• Laws (product standard, import/export,
restrictions, patent, copyright, trademark, tariff,
non-tariff barriers)
• Power blocs(cigar and sugar of Cuba is restricted
to US)
• Pressure group(consumerist, feminist, activists)
• Regional groupings(WTO, SAFTA, ASEAN, NAFTA)
• It changes the foreign trade structure of nations
Social and cultural
• Advertisements and culture
• Some ads are banned
• Festivals like Dashain, Tihar, Chhat, Id, Loshar,
Christmas
• Influences way of dressing, choice of color,
food habit, housing, internet practice
• Because of westernization family life has been
affected
• People are becoming materialistic