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MARKETING ENVIRONMENTMARKETING ENVIRONMENT
Dr M Manjunath Shettigar MA (con), MBA, MPhil, PhD
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It is useless to tell a river to stopIt is useless to tell a river to stop
running; the best thing is to learnrunning; the best thing is to learnhow to swim in the direction it ishow to swim in the direction it is
flowing.flowing.-Anonymous-Anonymous
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Purpose of environmental analysis
1. An understanding of macro and micro marketingenvironment forces is essential for planning.2. Helps a business to compete more effectively
against its rivals.3. Assists in the identification of opportunities and
threats.4. Enables an organization to take advantage of
emerging strategic opportunities.
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Marketing environment refers to thelarger context in which marketingexercise of the company is managed. It
includes: Microenvironment: factors & forces in the
immediate environment which affect thecompanys ability to serve its customers.
Macro environment: larger societal forcesthat affect the microenvironment.
onsidered to be beyond the control of theorgani!ation.
MarketingMarke
ting nvironmentnvironment
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Actors in theActors in theMicroenvironmentMicroenvironment
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Conditions with in the frm/ companyconstitutes the internal environment othe company, over which it has control
Marketing must consider other parts of the organi!ationincluding finance" #&$" purchasing" operations andaccounting
Marketing decisions must relate to broader companygoals and strategies
MicroenvironmentMicroenvironment1. h e c o m p a n y
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The Company
!arketing managers must "ork "ith alldepartments of a company
All #epartments have an impact on themarketing department$s plans and actions
%&hink 'ustomer(
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Provide resourcesneeded to producegoods and services.
Important link in the%value deliverysystem.
Most marketers treatsuppliers like partners.
!uppliers"! uppliers"
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Marketing IntermediariesMarket ing Intermediaries
!arketing intermediaries help the company promote) sell) and distribute its goods to the final buyers
&hey are middlemen *"holesalers) retailers) agents+)distributing agencies) market service agencies) etc.
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5 Types of Customers5 T ypes of Customers
1. 'onsumer markets
2. ,usiness markets *, to ,+3. -eseller markets4. overnment markets/. 0nternational markets
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CompetitorsCompetitors
&o be successful) a company must satisfyneeds and "ants of consumers better than
competitorsA company should monitor three variables"hen analyzing each of its competitors
hare of !arket hare of !ind hare of Heart
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#ompetitors$#om petitors$
!ust understand competitor$s strengths!ust differentiate firm$s products andofferings from those of competitors'ompetitive strategies should emphasizefirm$s distinctive competitive advantage inmarketplace
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%ypes of &ublics%ypes of &ublics
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%he #ompany's Macro environment%he #ompany's Macro environment
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Demographic EnvironmentDemographic Environment
#emography is the study of human populations interms of size) density) location) age structure)
gender) race) occupation) and other statistics
#emographics change over time and companiesmust keep up "ith them
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Economic EnvironmentEconomic Environment
'hanges in 0ncome 1 $s consumption
frenzy 2 $s %s5ueezed
consumer( 2 1 $s value marketing
0ncome #istribution 6pper class !iddle class 7orking class 6nderclass
Consists of factors that a ect consumerpurchasing power and spending
patterns.
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Global EconomicDevelopment
Global EconomicDevelopment
Changes in IncomeChanges in Income
Changing ConsumerSpending Patterns
Changing ConsumerSpending Patterns
e!Economic
Concerns for"ar#eters
e!Economic
Concerns for"ar#eters
conomic nvironmentconomic nvironment
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(Economic FactorsEconomic Factors*a+ ross national product.*b+ 8er capita income.*c+ ,alance of payments position.*d+ 0ndustry life cycle and current phase through "hich
the industry is passing. &he different phases of thislife cycle could be classified as recovery) boom)recession and depression.
*e+ &rends in the prices of goods and services9 specifically) "hether the inflationary or deflationarytrends are visible.
*f+ :iscal policies and prime rate of interest charged bycommercial banks.
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Natural Environment Natural Environment
0nvolves the naturalresources that are
needed as inputs bymarketers or that areaffected by marketing
activities .
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)atural)atural
nvironmentnvironment
)atural)atural
nvironmentnvironmentConservationOf ResourcesConservationOf Resources
EcotourismEcotourism
Recyc e andReduce !asteRecyc e and
Reduce !aste
Factors Affectingthe
"aturaEnvironment
Factors Affectingthe
"aturaEnvironment
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"atura Environment"atura Environment
;atural Environment< 0nvolves the natural resources that are needed
as inputs by marketers or that are affected bymarketing activities
&rends
hortages of ra" materials 0ncreased pollution 0ncreased government intervention
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%echnological nvironment%echnological nvironment
!ost dramaticforce no"shaping ourdestiny.
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Techno ogica ForcesTech no ogica Forces
hanges in technology maymake business obsolete' e.g." Pagers (mobile phones) * P" * # ( $s" $*$s) Postal services (fax machine'
Internet)
+ew opportunities,e.g."specialty online retailers"mass customi!ation
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Cu tura EnvironmentCu tura Environment
&he institutionsand other forcesthat affect asociety$s basicvalues) perceptions)
preference) and behaviors.
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Marketing ManagementMarketing Management
ThemselvesIdentify withbrands for self-expression
OthersRecent shift fromme to wesociety
OrganizationsTrend of decline intrust and loyalty tocompanies
ociety!atriotism on therise "#$
%aturelifestyles of healthand sustainability"&O'( $ consumersegment
)niverseIncludes religionand spirituality
*ultural +nvironment Includespeople,s views of
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Increasing$egislation
Increasing$egislation
ChangingGovernment
%genc!Enforcement
ChangingGovernment
%genc!Enforcement
cludes $aws& Government %gencies& Etc. that In'uenc( $imit )rgani*ations+ Individuals in a given societ!
c ludes $aws& Government %gencies& Etc. that In'uence( $imit )rgani*ations+ Individuals in a given societ!
IncreasedEmphasis on
Ethics (Sociall!
,esponsible%ctions
IncreasedEmphasis on
Ethics (Sociall!
,esponsible%ctions
#o itica Environment#o itica Environment
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&olitical %rends&olitical %rends
0ncreased legislation and regulationaffecting business
'hanging government Agency Enforcement
0ncreased emphasis on socially responsibleactions and ethics
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*egal and +egulatory*egal and +egulatory
nvironmentnvironment-aws and #egulations for safety
for consumer protection to protect special interests
$angers of litigation anyone can sue"and delay/derail business plans0
1xamples: 2ntitrust I in India
3air competitionPricing
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The Marketing Environment andThe Marketi ng Environment and
Competitor Ana ysisCom petitor Ana ysis
7=& analysis8E & analysis
:ive forces analysis
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$!OT ana ysis$!OT ana ysistrengths *internal+
7eaknesses *internal+=pportunities *e>ternal+&hreats *e>ternal+
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#E$T ana ysis#E$T ana ysis8olitical?legal factors
Economic factorsocio@cultural factors
&echnological factors
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#o itica % ega#o itica % ega!onopolies?competition legislationsEnvironmental protection la"s&a>ation policyEmployment la"s
overnment policyegislation
=thers
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Economic FactorsEconomic Factors0nflation
Employment#isposable income,usiness cyclesEnergy availability and cost=thers
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$ociocu tura factors$ociocu tura factors#emographics#istribution of income
ocial mobilityifestyle changes
'onsumerismevels of education
=thers
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Techno ogicaTech no ogica
;e" discoveries and innovations
peed of technology transfer -ates of obsolescence0nternet0nformation technology=thersB
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,ive forces analysis,ive forces anal ysis
:ive forces model is a environment analysis tooldeveloped by famous trategy uru MichaelPorter
&he / forces he speaks about are