Marketing Environment - Chap 2

Marketing Environment Dr.Sita Mishra

Learning Objectives  

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Describe the environmental forces that affect the company’s ability to serve its customers. Explain how changes in the demographic and economic environments affect marketing decisions. Identify the major trends in the firm’s natural and technological environments. Explain the key changes in the political and cultural environments. Discuss how companies can react to the marketing environment.

Marketing Environment 

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The marketing environment consists of actors and forces outside the organization that affect management’s ability to build and maintain relationships with target customers. Environment offers both opportunities and threats. Marketing intelligence and research used to collect information about the environment.

Marketing Environment  Includes: 

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Microenvironment: actors close to the company that affect its ability to serve its customers. Macro-environment: larger societal forces that affect the microenvironment. • Considered to be beyond the control of the organization.

The Company’s Microenvironment  Company’s Internal Environment:

Areas inside a company.  Affects the marketing department’s planning strategies.  All departments must “think consumer” and work together to provide superior customer value and satisfaction. 

Actors in the Microenvironment

The Suppliers Suppliers: Provide resources needed to produce goods and services. Important link in the “value delivery system.” Most marketers treat suppliers like partners.

Marketing Intermediaries: 

Help the company to promote, sell, and distribute its goods to final buyers • • • •

Resellers Physical distribution firms Marketing services agencies Financial intermediaries

Customers Customers: Five types of markets that purchase a company’s goods and services  Consumer market  Business market  Reseller market  Govt. market  International market

Competitors 

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Those who serve a target market with products and services that are viewed by consumers as being reasonable substitutes Company must gain strategic advantage against these organizations

Publics Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. 

The Macro-environment The company and all of the other actors operate in a larger macro-environment of forces that shape opportunities and pose threats to the company. “ It

is useless to tell a river to stop running; the best thing is to learn how to swim in the direction it is flowing”

The Company’s Macroenvironment

Demographic Environment Worldwide Population Growth Population Age Mix Ethnic Markets Educational Groups Household Patterns Geographical Shifts in Population Shift from Mass Market to Micromarkets

Economic Environment Income Distribution Subsistence economies (few opportunities for marketers) Raw-material-exporting economies Industrializing economies Industrial economies

Savings, Debt, & Credit Availability

Natural Environment

Shortages of Raw Materials Increased Pollution Increased Government Intervention Environmentally Sustainable Strategies

Technological Environment Accelerating Pace of Change

Unlimited Opportunities for Innovation

Issues in the Technological Environment

Varying R & D Budgets

Increased Regulation

Discussion Questions  Within the last ten years, which

technological force has had the greatest impact on marketing? In what areas of marketing has this impact been seen?  What technological force has impacted

you the most? In what ways has this occurred?

Political-Legal Environment Increase in business legislation  Protecting the welfare of consumers Under Consumer Protection Act,1986, six rights of the consumers are recognised:  Safety  Information  Choice  Representation  Redressal  Consumer education 

Cultural Environment  The institutions and other forces that affect

a society’s basic values, perceptions, preference, and behaviors.  Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and • government.  Secondary beliefs and values are more open to change.

Colgate-Palmolive’s Total Global Branding Strategy 

Colgate-Palmolive has had global success with its Colgate line of tooth-care products. The products and their packaging design do not vary from country to country; the only thing that changes is the language on the packages.

INDIAN MARKETING ENVIRONMENT Indian Population In the new millennium (in May’2000) India’s population has reached the billion mark – only the second country to do so. There are only four countries in the world that have a population exceeding that of Uttar Pradesh (157 million) India adds roughly 18 million people, the population of Australia, every year.

Indian Population : Age Structure Projection (Percentage of total population) Planning Commission Projection Age Group

Year 1997

Year 2002

Year 2007

Year 2012

Under 15 Years

37.2

33.5

30.0

28.2

15-59 Years

56.1

59.3

62.3

63.2

60 Years and above

6.7

7.2

7.7

8.6

INDIAN MARKETING ENVIRONMENT 

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Few Examples………… How some of the industry leaders lost their competitive advantage because they failed to perceive the environmental changes….? The decade of 1980s saw many of the industry titans losing their competitive advantage to relatively new entrants…….. (Contd..)

Few Examples…………  Hindustan Motors and Premier

Automobiles lost their pre-eminent position in the Indian market to Maruti Udyog’s Maruti 800.  Mahindra and Mahindra were shaken up by Maruti Udyog’s Gypsy.  Titan watches heralded a new era of watches and shook the giant HMT.  Hindustan Levers Surf was cornered by Nirma.

Few Examples…………  Television giants like NELCO, Crown,

Weston, Salora, Bush etc. lost out to absolutely new firms and brands like Onida and Videocon.  Videocon launched its washing machine in1998 and suddenly thereafter, one saw an explosion in the market with about half-a-dozen brands.