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1] MARKETING ENVIRONMENT
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MARKETING ENVIRONMENT
Marketing Environment can be defined as the internal or external
factors that affects the marketing strategies of a particular organization or
goods and services.
It basically refers to factors and forces that affect a firms ability to build
and maintain successful relationships with customers.
There are three levels of Marketing Environment, which are as follows:
Micro Environment- small forces within a company that affect its ability
to serve its customers.Meso Environment- the industry in which a company operates and the
industrys market.
Macro Environment- larger societal forces that affect the micro
environment.
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MARKETING
ENVIRONMENT
DEMOGRAPHICENVIRONMENT
ECONOMIC
ENVIRONMENT SOCIAL-
CULTURALENVIRONMENT
NATURAL
ENVIRONMENT
TECHNOLOGICAL
ENVIRONMENT
POLITICAL
ENVIRONMENT
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DEMOGRAPHIC ENVIRONMENTWORLDWIDE POPULATION GROWTH:
The world population is growing at an explosive
rate. It is expected to exceed 7.9 billion by the year
2025. Moreover, population growth is higher in
countries which can least afford it. A growing
population does not mean growing markets, unless
these markets have sufficient purchasing power.Nonetheless, companies that carefully analyze their
markets can find major opportunities.
POPULATION AGE M IX:
National population vary in their age mix. Some
have a very young population while some have highdensity of old population. A company will market its
products specifically to the greater population in a
specific country. For example, marketers will target
youth segments where the population is young.
Population mix can also be on the basis of literacy.
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ECONOMIC ENVIRONMENT
I NCOME DISTRIBUTION:
In an economy, developed or developing, the
income of people are unevenly distributed. Some fall
in the low level income category, while some in the
high level income category. Generally, in adeveloping nation, the population with a low level
income is much higher than the high level. Therefore,
marketers carefully analyze under which income
criteria does their target segment fall and hence,
undertake their marketing strategies. Economic
Marketing Environment refers to the purchasing
power of potential customers and the ways in which
people spend their money.
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SOCIAL - CULTURAL ENVIRONMENT
Society shapes the beliefs, values, and
norms that largely define consumer tastes
and preferences. People absorb, almost
unconsciously, a world view that defines
their relationships to themselves, to others,to organizations, to society, to nature, and
to the universe. The diversity in the world
is not only restricted to topography but also
in the languages, cultures as well asreligious beliefs. In this era of
globalization, organizations cater to the
culture of each country where it functions
or operates.
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NATURAL ENVIRONMENTThe deterioration of the natural
environment is a major global problem.
There is great concern regarding green
house gases, depletion of the ozone layer,
global warming and shortages of water. It
impacts the marketing in a large way asconsumers often appear conflicted about
product decisions that affect the natural
environment.
Corporate Environmentalism can be
defined as the recognition of the
importance of environmental issues facing
the firm and the integration of those issues
into the firms strategic plans.
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TECHNOLOGICAL ENVIRONMENT
One of the most dramatic forces shapingpeoples lives is technology. Through the
years technology has released such
wonders like penicillin, open-heart surgery,
submachine gun, etc. It also released
mixed blessing such as cell phones and
video games.
Every new technology is a force for
creative destruction. The number of majornew technologies discovered affects the
economys growth rate. Marketers should
monitor the regular trends in technology.
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POLITICAL ENVIRONMENT
The political and legal environment consistsof laws, government agencies, and pressure
groups that influence and limit various
organizations and individuals. Sometimes
these laws also create new opportunities forbusiness.
Two major trends in the political environment
are:
Increase in business legislation
Growth of special interest groups
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2] GLOBAL MARKETINGENVIRONMENT
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The Demographic Environment
The World population is showing explosive growth (totaled 6.1billion in2001 and will exceed 7.9 billion by the year 2025).
Growth rate : Developed Nations - 0.6%
Developing Nations - 2%
Young population is more in Developing Nations and in SouthAsia. So, marketers caters more to the youth segment.
Literacy rate is growing at a high rate. Hence the consumers arenow more aware with new products and services.
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Economic Environment
As per World Bank, GDP of South Asia is estimated at1.1Trillion (2.3%of worlds GDP)
Growing at 8.6%per annum.
But Per Capita GDP is low.
Income level is rising but still large number of population is
under low level category.
Most of the countries are now turning into free economy byaccepting liberalization.
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Natural Environment
In western Europe, green parties have vigorouslypressed for public action to reduce industrialpollution.
In the United States, Sierra club and Friends or theEarth carry these concerns into political and socialaction.
The Soap Industry increased its productsbiodegradability.
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Technological Environment
Accelerating pace of change.
Unlimited opportunities for innovation.
Varying R&D Budgets.
Increased regulation of technological change.
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Political-Legal Environment
Increase in Business Legislation.
Less govt. intervention.
Growth of Special interest Groups.
Safety
Information
Choice
Representation
Redressal
Consumer Education
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3] INDIAN MARKETINGENVIRONMENT
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Characteristics of 21st Century
knowledge and information based society
Global networking.
High mobility of population from rural to urban areas.
Increasing productivity.
Reliance on innovation and creativity
Conscious society-customer aware of his rights andobligations.
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Emerging Trends
Emergence of trade blocked.
Population explosion.
Rapid technological changes.
Social changes.
Literacy levels.
World as a global economic village.
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Market Scenario
The entire world is a boundary less global villagedue to it telecom and transport revolution.
Customers needs, wants, desires, values and ethicsare changing day by day.
Customers want more options and alternatives.
There is a shift from sellers market to buyersmarket.
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Organisations have to look for their competitiveedges and develop on their strengths and explore
new opportunities.
Organisations have to offer value added focused
services to attract customers.
CONT
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India's Strengths-marketing Prospective
Huge resources both human and natural.
Inflation under check.
Stability of government irrespective of ideology.
Capable of providing food to many nations.
Matured democracy.
Global it hub.
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Weaknesses Population growth unchecked.
Fiscal deficit.
Inadequate infrastructure
Slow judiciary.
Complicated procedures and systems.
Unexpected high level of unethical practices.
R&D base is very low.
27% population below poverty line.
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4] PESTEL ANALYSIS
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ORGANIZATION
Political
Economic
Legal
Social
Technological
Environmental
PESTEL ANALYSIS
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What is PESTEL Analysis?
PEST stands for the analysis of the external factors which is
beneficial when conducting research before beginning a newproject or to help conduct market research. It is a tool for
analyzing organizations macro environment .
The origin of this framework is difficult to establish however
some data is available which refers to the ETPS environment by
Francis J. Aguilar. Later it was reorganized as STEP by Arnold
Brown(1967).Later in 1980s several authors included variations from
taxonomy classifications and thus formed PEST or PESTLE
Analysis framework.
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POLITICAL FACTORS
Government policies
Government terms and change
Trading policies
Pressure groups
Funding, grants and initiatives
Wars and conflict
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ECONOMIC FACTORS
Home economy situation and trends.
Overseas economies and trends.
General taxation.
Taxation specific to product/services.
Seasonal/weather issues.
Market and trade cycles.
Industry-specific factors .
Market routes and trends.
Customer/end-user drivers.
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SOCIAL FACTORS
Life trends.
Demographics.
Consumer attitudes and opinions.
Media views.
Law changes affecting social factors.
Brand, company, technology image.
Consumer buying patterns .
Fashion and role models .
Ethnic/religious factors
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TECHNOLOGICAL FACTORS
Competing technology development.
Technological advancements.
Research and development funding. Associated/dependent technologies .
Replacement technology /solutions.
Maturity of technology.
Information and communications.
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ENVIRONMENTAL FACTORS
Environmental legislation.
Public awareness of environmental issues.
Political agenda on the environment.
Consumer buying patterns.
CSR awareness and expectations.
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LEGAL FACTORS
Current Legislation
Future Legislation
European/ International legislation
Regulatory bodies and processes.
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PESTEL ANALYSIS
ofRETAIL INDUSTRY
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RETAIL INDUSTRY
Retail consists of the sale of goods or merchandise from a fixed
location, such as a department store, boutique or kiosk, or by mail, insmall or individual lots for direct consumption by the purchaser.
Retailing may include subordinated services, such as delivery.
Purchasers may be individuals or businesses. In commerce, a
"retailer" buys goods or products in large quantities frommanufacturers or importers, either directly or through a wholesaler,
and then sells smaller quantities to the end-user. Retail establishments
are often called shops or stores. Retailers are at the end of the supply
chain. Manufacturing marketers see the process of retailing as a
necessary part of their overall distribution strategy. The term "retailer"
is also applied where a service provider services the needs of a large
number of individuals, such as a public utility, like electric power.
PESTEL ANALYSIS OF RETAIL INDUSTRY
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PESTEL ANALYSIS OF RETAIL INDUSTRY
Environmental regulations and protection.
Tax policies.
Interest rates & monetary policies.
Contract enforcement law.
Consumer protection.
Employment laws.
Government organization / attitude.
Competition regulation.
Political Stability.
Safety regulations.
POLITICAL ECONOMICAL
Economic growth
Interest rates & monetary policies
Government spending
Unemployment policy
Taxation
Exchange rates
Inflation rates
Stage of the business cycle
Consumer confidence
SOCIAL TECHNOLOGICAL
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Income distribution
Demographics, Population growthrates, Age distribution
Labor / social mobility
Lifestyle changes
Work/career and leisure attitudes
Entrepreneurial spirit
Education
Fashion, hypes & Living conditions
Health consciousness & welfare,
feelings on safety
SOCIAL
Government research spending
Industry focus on technological effort
New inventions and development
Rate of technology transfer
Life cycle and speed of technological
obsolescence
Energy use and costs
Changes in Information Technology
Changes in Internet
Changes in Mobile Technology
TECHNOLOGICAL
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Consumer buying behavior.
Buying pattern
Socio cultural effect on purchasing.
ENVIRONMENTAL
Retail industry sourcing and overseas
Corporate Social Responsibility.
Tax issue.
M & A expansion and consolidation.
LEGAL
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INTRODUCTION
Liberalization of economy for a country refers to set itfree it from direct or physical controls imposed by the
government.
Economic reforms were based on the assumption thatmarket forces could guide the economy in a more effectivemanner than government control.
Examples of one of other undeveloped countries likeKorea, Thailand, Singapore, etc. that had achieved rapideconomic development as a result of liberalization were keptin consideration.
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A Balance of Payments crisis in 1991 which pushed the
country to near bankruptcy.
The Rupee devalued and economic reforms were enforcedupon India.
India central bank had refused new credit and foreign
exchange reserves had reduced to the point that Indiacould hardly finance three weeks worth of imports.
CAUSES OF INDIAN LIBERALIZATION
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Elimination of industrial licensing and registration.
Liberalizing the MRTP act.
Freedom for expansion and production.
Increase in the investment limit of the small industries.
Freedom to import capital goods.
Freedom to import technology.
Free determination of interest rates.
ACTIONS TAKEN DURING LIBERALIZATION
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Gigantic Annual growth in GDP.
A rate of growth that will double average income in adecade.
Rapid Growth in all manufacturing as well as servicesectors.
Exports of information technology enabled servicespredominantly strong.
ECONOMIC IMPACT OF LIBERALIZATION
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Increase in rate of economic growth.
Increase in competitiveness of industrial sector.
Reduction in poverty and inequality.
Fall in fiscal deficit.
Control on prices.
Decline in deficit of BOP.
Increase in Efficiency.
POSITIVE IMPACT OF LIBERALIZATION
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Less importance to agriculture.
Pressure by IMF and World Bank.
More depending on Foreign Debt.
Dependence on Foreign technology.
Undue importance to Privatization.
Problem of Unemployment.
NEGATIVE IMPACT OF LIBERALIZATION
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Indian economy had experienced major policy changesin early 1990s.
The new economic reform, popularly known as,
Liberalization, Privatization and Globalization (LPGmodel) aimed at making the Indian economy as fastest
growing economy and globally competitive.
The series of reforms undertaken with respect toindustrial sector, trade as well as financial sector aimedat making the economy more efficient.
INTRODUCTION
C C S
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The rate of growth of the GDP of India has been on the
increase from 5.6 % during 1980-90 to 7 % in the 1993-
2001 period.
The cumulative FDI inflows from 1991 to September2006 were Rs.1, 81,566 crores (US $ 43.29 Bn).
In respect of market capitalization, India is in the fourth
position with $ 894 Bn after the US ($ 17,000 Bn)
The foreign exchange reserves of India have enlarged.
EFFECTIVE IMPACTS
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Campus Overview
907/A Uvarshad,
Gandhinagar
Highway, Ahmedabad
382422.
Ahmedabad Kolkata
Infinity Benchmark, 10th
Floor, Plot G1,
Block EP & GP,
Sector V, Salt-Lake,
Kolkata 700091.
Mumbai
Goldline Business Centre
Linkway Estate,
Next to Chincholi Fire
Brigade, Malad (West),
Mumbai 400 064.
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