Marketing Environment 1

Marketing Environment Presented By Vishal Sharma

What is Marketing Environment  To

analyze the internal and external factors which influence the company.  Environment forces are dynamic and change brings uncertainties, threats and opportunities.

Firm

Internal Factors

External Factors

Internal Factors Human Resources

Production Facility

Internal Factors

R&D

Company Location

Financial Capability

Company Image

External Factors External Environment

Micro

•Suppliers •Marketing Intermediaries •Customers

Macro •Demographic •Legal •Political •Technological •Socio-cultural •Economic •Natural

Internal vs. External Factors 

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These are inherent factors of the firm. Can be controlled by the management.

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It effects whole industry rather than single firm. Can not be controlled by the management. Can be divided into Macro and Micro factors.

Competition  It

has significant effect on the marketing environment.  Market dynamics changed due to the competition.

Types of Competition 1.

Monopoly :

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Only one firm controls over the supply & price of the product. No close substitute. Eg British East India Company created monopoly in trading

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2. Oligopoly:    

few seller actions of one player affect other. usually sell the branded product Eg:OPEC(The Organization of the Petroleum Exporting Countries )

Types of competitive structure 3. Monopolistic Competition: Comparatively large no. of competition  Has relatively small market share.  Adopt differentiation strategy to capture the market.(substitutes) Eg: Restaurants,clothing 

4. Pure competition:    

Large no. of seller Offer similar product Anybody can enter and go out from the market Eg:Agricultural products

Macro environmental factors 1. Demographic factors  It       

deals with the study of the characteristics of human population. Age Sex Growth Density Distribution Gender Marital status

 Demographic

variables help in distinguishing the consumer groups according to the specific needs, wants and usage rates.

Macro environmental factors 2. Political Environment 

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Government policies influence the marketing decisions and strategies of a firm. Organization should closely monitor the environment of the country. There can be 2 types of politics : Domestic politics : subsidy given to Tata’ nano car. International politics:rise of trade blocs:EU

Macro environmental factors 3. Economic Environment   

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5. 6. 7. 8.

Economic condition of the country. Like income and purchasing power etc. PPP (purchasing power parity) helps in determining the relative purchasing power of two country. Consumer buying trends reflect the general economic condition. It includes : Business cycle Buying power Financial sources Willingness to spend

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Business cycle : life cycle of the business.

b)

Growth stage :    

Employment rate is high Income is high Consumer spends more to fulfill the demand Consumer have lot of confidence on economy

Strategy of the company : Expand the product offering Increasing their distribution Promotional budget Set high price to the product

b) Recession Stage : 

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Jobs are reducing consequently people spends less money. Consumer buying decision depend on price.

Strategy of marketer : Reduce the price of the product , for this reduces the cost

c) Depression stage:  

Rate of unemployment is very high, wages are low Customer lacks of confidence in the economy

d) Recovery stage :  Company moves from recession or depression to growth  Unemployment rate begins to decline  Purchasing power increasing  Unwillingness to buy reduces

Life cycle of the Business Recession

Growth or prosperity

Depression

Recovery

2. Buying power : it depends on availability of financial sources and the state of the economy. 3. Financial source: can be 3 types:  Income – Earned by us over fixed period of time  Credit – Obtain by the banks and credit card  Wealth – Generated through savings, gifts etc.

Macro environmental factors 4. Socio Cultural factors It refers to attitudes, beliefs, norms, values and lifestyle of individual in a society.

Macro environmental factors 5. Technology 

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It is used to perform a task in effective and efficient manner. Marketer should know the type of technology or R & D used by a company. It impacts on product : Product – can be designed ( ATM, PC to Laptop) Price – reduce the cost of price Promotion- with buyers, distributors, people through e-mail and other various of media.

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Advertising- can create a creative ad Distribution – online booking can be made

Macro environmental factors 6. Natural Factors 

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We should maintain the ecological balances. Components of nature are : Resources : company should use limited resources and develop alternatives.

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Weather : according to the climate consumer’s demand is changed.

3. Pollution : Individual are using recycle bags paper bags instead of polythene bags.

4. Government intervention : Government policies regarding the natural varies nation to nation.

Macro environmental factors 7. Legal Factors 

2. 3. 4.

Marketing activities greatly influences by the legal activities of a particular country. Consumer Protection act State regulatory agencies Non- government regulatory agencies : e.g. IRDA