Download The Marketing Environment

The Marketing Environment
Marketing Environment
Marketing Environment consists of
the actors and forces outside
marketing that affect marketing
management’s ability to develop and
maintain successful relationships with
its target customers.
Includes:
Microenvironment
Macroenvironment
Microenvironment- forces close to the
company that affect its ability to serve
its customers.
Macroenvironment- larger societal
forces that affect the
microenvironment
The Company’s Microenvironment
Company’s Internal Environment:
Functional areas inside a company that have an
impact on the marketing department’s plans.
In designing marketing plans, marketing
management takes other company groups into
account-groups such as top management, finance,
R&D, purchasing etc.
Marketing management must work closely with
other company departments. e.g. finance is
concerned with funding for marketing plans.
R & D focuses on designing safe and attractive
products.
Company’s Internal Environment
Finance
Top Management
Accounting
Marketing
Manufacturing
R&D
Purchasing
The Company’s Microenvironment
Suppliers: Provide the resources needed to
produce goods and services and are an
important link in the “value delivery
system”.
Marketing Intermediaries: help the
company to promote, sell and distribute its
goods to final buyers. They include
resellers, physical distribution firms,
marketing service agencies and financial
intermediaries.
The Company’s Microenvironment
Customers: Five types of markets that
purchase a company’s goods and
services.
Business Markets
Consumer Markets
Reseller Markets
Company
International Market
Government Markets
Competitors: Those who serve a
target market with similar products
and services against whom a
company must gain strategic
advantage.
Publics: Any group that perceives
itself having an interest in a
company’s ability to achieve its
objectives.
Type of Publics
Financial Publics: Banks, investment houses
which influence ability to obtain funds.
Media Publics: carry news, features, and editorial
opinion.
Government Publics
Citizen Action Publics: Consumer groups,
environmental groups etc
Local Publics: neighbourhood residents
General public
Internal Publics: include workers, managers and
board of directors.
Company’s Macro environment:
It includes all the external forces in a larger
macro environment which shape
opportunities and pose threats to the
company. These are:
Demographic forces
Economic forces
Natural forces
Technological forces
Political forces
Cultural forces
The Company’s Macro environment
Demographic: studies populations in terms
of size, density, location, age, gender,
race, occupation and other statistics.
Economic: Factors that affect consumer
purchasing power and spending patterns.
Natural: natural resources needed as
inputs by marketers or that are affected by
marketing activities.
The Company’s Macro environment
Technological: forces that create new
technologies, creating new product and
market opportunities.
Political: laws, agencies and pressure
groups that influence and limit
organisations and individuals in a given
society.
Cultural: institutions and other forces that
affect a society’s basic values, perceptions,
preferences, and behaviours.
Demographic Trends
Changing Age Structure (In US, population
is aging, in India young population)
Changing family structure: late marriage,
fewer children, working women, single
parent)
Geographic shift
Better educated, dual income
Increasing diversity (US, more of a “salad
bowl” than a melting pot)
Economic Environment
The economic environment consists of factors that
affect consumer purchasing power and spending
patterns.
Nations vary greatly in their levels and distribution
of income.
Some countries have subsistence economies,
while others are industrial economies.
Industrial economies constitute rich markets for
different kinds of goods.
Key Economic Concerns for marketers are:
Economic development
Changes in Income
Changing Consumer spending patterns.
Factors affecting Natural
Environment
Shortage of raw materials
Increased pollution
Governmental Intervention
Environmentally sustainable
strategies
Technological environment
Faster pace of technological change,
products are outdated at a rapid pace.
Almost unlimited opportunities being
developed daily in health care, space
industry, robotics, and bio-genetic field.
Challenge is not only technical, but also
commercial-make practical, affordable
versions of the product.
Increased regulation concerning product
safety, individual privacy and other areas
that affect technological changes.
Technological environment
The technological environment is perhaps the most dramatic
force shaping our destiny.
Technology has released wonders like antibiotics, organ
transplants, computers and internet.
It has also released horrors such as nuclear missiles,
weapons and rifles.
New Technology creates new markets and opportunities.
However, every new technology replaces existing
technology.
Television hurt transistors, photo copiers hit carbon-paper
business, digital cameras have replaced traditional cameras
etc.
When old industries ignored new technologies, their
business declined.
Thus marketers should watch the technological environment
closely.
Political Environment
Marketing decisions are strongly affected
by developments in the political
environment
Includes laws, Government agencies, etc
that influence & limit organisations/
individuals in a given society.
Increasing legislation
Increased emphasis on ethics and socially
responsible actions.
Cultural Environment
Cultural environment consists of
institutions and forces that affect a
society’s values, perceptions,
preferences and behaviours.
Changing values of society.
Impact of religious and cultural
values: example of McDonald in India,
Kelloggs.
Responding to the marketing
environment
Taking a proactive approach to
managing the microenvironment and
the macroenvironment by taking
aggressive actions to affect the forces
in the marketing environment.