Marketing Environment

Marketing Environment
• The marketing environment can be
defined as “all the variables or factors
that directly or indirectly influence
marketing activities.”

• There are two key perspectives on the

marketing environment,
– MACRO ENVIRONMENT.
– MICRO ENVIRONMENT.
 Macro Environment
• They are uncontrollable factors
• These factors affects the working of all the
firms in the industry
• It affects the business in the long run
 Macro Environmental Analysis
• It includes
• Demographics
• Political environment
• Economic environment
• Socio-cultural environment
• Technological environment
• Legal environment
• Natural environment
 Micro Environment

• They are specific to a particular

business/firm.

• These are controllable factors.

• It acts on a short term basis.

 Micro Environmental Analysis
• It includes
• Company
• Suppliers
• Market
• Market intermediaries
• Customers
• Competitors
• Public
 Macro Environment
• Demographics
• Demography is the study of human population and
its distribution.
• Demographic analysis deals with
elements such as
– Age
– Sex
– Education
– Occupation
– Income
– Urban and rural population
 Macro Environment
Political environment
• Political pressure groups influence and limit
organisation

• Special Interest groups and political action

committees put pressure on business organisation
to pay more attention on
» Consumer rights
» Minority rights
» Women's rights etc
 Macro Environment
Economic environment
• Mere presence of people does not constitute
market.
• They want people with money to spend and their
willingness to spend.

• The available purchasing power in an economy

depends on current income, cost of living, interest
rates, prices, savings circulation of money, credit
availability etc
 Macro Environment
Socio-cultural environment

• The institutions and other forces that affect

a society’s basic values, perceptions,
preference, and behaviors.

• Role of Men and Women

• Health and Fitness
• Convenience
• Impulse Buying
 Macro Environment
Technological environment

• Technology has changed the way people

communicate with the advent of the internet and
telecommunication system.

• Marketer should monitor the following trends in

technology;
» the pace of change
» the opportunities for innovation
» varying R&D budgets
» increased regulation of technological change
 Macro Environment
Legal environment

• Firms prefer to work in a country where there is a

sound legal system

• Marketers must have a good working knowledge of

major laws protecting customers, Competition and
organisation

– Eg: MRTP (Monopolies and Restrictive Trade practices

Act), consumer protection Act, Intellectual property rights,
FEMA( foreign exchange management Act), Labour Laws
etc….
 Macro Environment
Natural environment

• The deterioration of the natural environment is a

major global concern

• Marketers need to be aware of the threats and

opportunities associated with four trends in the
natural environment;
» the shortage of raw materials, especially water;
» the increased cost of energy;
» increased pollution levels;
» changing role of government.
 Micro Environment
• The micro Environment refers to the forces that
are close to the company and affect its ability to
serve its customers .

• It includes factors such as:

• Company
• Suppliers
• Market
• Market intermediaries
• Customers
• Competitors
• Public
 Micro Environment
COMPANY

• Refers to the internal environment of the

company.

• Understanding company’s own strengths and

weakness should be the goal of firm’s internal
analysis and also includes all departments

• Each of the departments has an impact on

marketing decisions.
 Micro Environment
COMPETITORS:

• It include companies with similar offerings for

goods and services.

• To remain competitive a company must consider

• who their biggest competitors?
• competitor’s marketing activities such as their products,
pricing, distribution system, promotion and programs and so
on.
 Micro Environment
SUPPLIERS:

• Provide resources needed to produce

goods and services
• Most marketers treat suppliers like
partners
 Micro Environment
MARKET:
• Market is to be studied in terms of its
• Actual and potential size
• Its growth prospects
• The price sensitivity of market
• The exixting distribution system of
market…
 Micro Environment
MARKET INTERMEDIARIES:

• Marketing intermediaries refers to

resellers, physical distribution firms,
marketing services agencies, and financial
intermediaries.
• These are the people that help the
company promote, sell, and distribute its
products to final buyers.
 Micro Environment
CUSTOMERS:
– The main aim of the business is to create and
retain the customer.
– The marketers have to analyze
• Who are our existing and potential customers?
• What benefits the customers looking for?
• Who are the customers?
• What are their buying patterns?
 Micro Environment
• Public

– Marketers have to carefully study the opinion,

values, belief and attitudes in order to design
the proper marketing strategy.
Marketing Mix
 Marketing mix
• The term Marketing Mix refers to the four
major areas of decision making in the
marketing process that are blended to
obtain the results desired by the
organization.

• The four elements of the marketing mix

are referred to the four Ps of marketing.
 Marketing Mix
• The credit of introducing the concept of
‘Marketing Mix’ goes to Professor N.H.Borden
of Harvard Business School of America.

• Marketing mix is the combination of elements

that you will use to market your product. There
are four elements:
• Product
• Place
• Price
• Promotion.
 Definition
• According to PHILIP KOTLER, “The
firm’s task is to find the best solution for its
marketing decision variables; the settings
constitute its marketing mix.”
 PRODUCT
PRODUCT

MARKETIN
MARKETIN
PLACE
PLACE PRICE
PRICE
GGMIX
MIX

PROMOTIO
PROMOTIO
NN
 Product Mix
• A product mix is the set of all products and
items that a particular seller offers for sale.

• The components of product mix are:

» Product line and Product Range
» Product Design
» packaging
» Product quality
» Labeling
» Branding
» After sale services and Guarantees
 Price Mix:
• Price is the value of a product expressed in terms of
money.

• The variables that significantly influence the price of a

product are:
 demand of the product
 cost,
 competition
 government regulation.

• The components of price mix are:

 Pricing policies and strategies.
 Terms of credit.
 Margin.
 Promotion Mix:

• Promotion is a communication process that takes

place between a business and its various publics.

• Promotion is the activities that communicate the

merits of the product and tries to persuade the target
market to buy it.

• The components of promotion mix are:

» Personal Selling.
» Advertising.
» Sales Promotion.
» Trade fairs and Exhibition.
» Public Relations.
 Place Mix:

• Place mix or distribution mix is the physical

distribution of products at the right time and at the
right place from the producers to the consumers.

• It refers to finding out the best means of selling,

sources of selling (wholesaler, retailers, and agents),
inventory control, storage facility, location,
warehousing, transportation, etc.

• The components of place mix are:

– Transportation
– Warehousing
– Channels of Distribution
The 4P’s and 4C’s of Marketing

4 P’s 4 C’s

Product Customer solution

Price Customer cost

Place Convenience

promotion Communication
Market Segmentation
 Market Segment

• Market segment consists of a group of

customers who share similar needs,
preferences and buying habits
 Market Segmentation
• It is a process of dividing the total market
for a good or service into several smaller
groups such that the members of each
group are similar with respect to the
factors that influence the demand.
 Importance of Segmentation
• To meet consumer needs more precisely
• Better Allocation of Resources
• Better Assessment of the competition
• Enhanced profits for business
• Better opportunities for growth
• Retain more customers
 Bases for market segmentation
• Geographic Segmentation
• Demographic Segmentation
• Psychographic Segmentation
• Behavioral Segmentation
 Bases for Consumer Market Segmentation

Market
Segementation

Demographic
Age, Psychographic Behavioral
gender,
Geographical Life style, Occasions,
income,
Regions, cities,
occupation,
personality, Benefits,
states, countries values, Usage rate,
religion,
social class, beliefs Loyalty status
family size
 Bases for Segmentation in
Industrial Markets
• Industrial markets can be segmented on
characteristics such as:
– Location
– Company type
– Behavioral characteristics
» Usage rate
» Buying status: potential, first-time, regular, etc.
» Purchase procedure: sealed bids, negotiations
 Undifferentiated Marketing
• One product for all the market
• Eg: staple foods , sugar, salt etc……

Firm Market
Marketing mix
 Differentiated Marketing
• One product to one segment
• Eg: Maruti Suzuki is offering different cars
for different segments

Marketing mix-1 Segment-1

Firm Segment-2
Marketing mix-2

Marketing mix-3 Segment-3

 Concentrated marketing
• One product to one particular market niche
• Eg: Rolls Royce , Audi cars aim its
vehicles at the premium segment

Segment-1
Firm Segment-2
Marketing mix
Segment-3
 Niche marketing
• Segment further divided into sub
segments to cater unsatisfied needs of
small group is called as niche.
• Eg: designer dress material for marriages
and other party occasions
Segment-1
Firm 2.2 Segment 2.1
Marketing Mix
Segment-3
Requirements
Requirements for
for Effective
Effective Segmentation
Segmentation

Measurable
Measurable • Size, purchasing power, profiles
of segments can be measured.

Accessible
Accessible • Segments must be effectively
reached and served.

Substantial
Substantial • Segments must be large or
profitable enough to serve.

Differential
Differential • Segments must respond
differently to different marketing mix
elements & actions.

Actionable
Actionable • Must be able to attract and serve
the segments.
 Target market
• Target market is one which the company
serves or decides to serve.

• A Target market is a group of people at

whom the organisation specially intends to
aim its marketing efforts.
 Evaluating Market Segments
Segment Size and Growth
Analyze sales, growth rates and expected
profitability for various segments.

Segment Structural Attractiveness

Consider effects of: Competitors, Availability of
Substitute Products and, the Power of Buyers &
Suppliers.

Company Objectives and Resources

Company skills & resources relative to the segment(s).
Look for Competitive Advantages.
Different Pattern For Target Market
Selection
• Single- segment concentration
– Mercedes concentrates on upper income group
• Selective specialization
– Radio broadcasters appeal to both younger and older
listeners
• Product specializations
– Maruti car
• Market specialization
– Insurance industries
• Full market coverage
– Coca-Cola in soft drink market
Product Differentiation
 Product Differentiation
• Differentiation is the process of creating a
different and distinguished offering by a
company through a number of available
tools, which adds meaningful value to the
offering
• Criteria for differentiation
• Important
• Superior
• Profitable
• Affordable
 Differentiation strategies
• Product differentiation
• Service differentiation
• Personnel differentiation
• Image differentiation
– Identity
– image
 Positioning
• Positioning means creating a specific
place/ idea for/ about your product in the
consumer's mind.

• It means how you want your consumers to

perceive that product.
 Positioning examples
• XYZ product is the best/ fastest/ easiest/
most powerful' in the market

• XYZ product is the 'cheapest' in the

market or XYZ product is the 'number one'
in the market.
 Definition
• According to PHILIP KOTLER,
“Positioning is the act of designing the
company’s image and value offer so that
the segment’s customers understand and
appreciate what the company stands for in
relation to its competitors,”
 Positioning Strategies
• Product Attributes

• Benefits, Problem Solutions & Basic Needs

• Price & Quality
• Specific Use
• Against Other Products
• Product User
• Against a Competitor
 Positioning Errors
• Under positioning
• When the brands position is so vague that its seen as just
another entry in to the market place
• Over positioning
• Buyers may have a narrow image of brand and they may
think its unaffordable to them
• Confused positioning
• Confused image of brand as a result of changing brand
position too frequently
• Doubtful positioning
• Buyers find it hard to believe the brands claim
 The stages of the Segmentation,
targeting and positioning process
• Situation Analysis 1.Identify
Identify the the organisations
organisations current
current position,
position,
capabilities,
capabilities, objectives
objectives and constraints
and constraints
Identify2.
the segmentation variables and
• Market segmentation segment the
Identify
market
the segmentation variables
and segment the market
3. Develop
Develop profilesprofiles
of eachofsegment
each segment

• Market targeting 4.Evaluate

Evaluatethethepotential
potentialattractiveness
attractivenessofof
each segment each segment
Select5.the
Select
targetthe target segment
segment

6. Identify
Identify thethe positioning
positioning concept
concept in each
in each
• Product positioning target segment target segment
7.Select the appropriate positioning concepts
Select the appropriate positioning concepts

8. Develop
8. Develop thethe marketing
marketing mixmix strategy
strategy
• The marketing mix