Marketing Environment: Macro & Micro Factors Affecting Business

MARKETING ENVIRONMENT MACRO & MICRO FACTORS AFFECTING BUSINESS

Marketing Environment • All the actors and forces influencing the company’s ability to transact business effectively with it’s target market. • Includes: • Microenvironment - forces close to the company that affect its ability to serve its customers. • Macro environment - larger societal forces that affect the whole microenvironment.

The Marketing Environment Demograph ic Company

Economi c

Cultura l

Publics

Company

Competitors

Suppliers

Customers

Political

Intermediaries

Technologica l

Natural

The Macroenvironment

Demographic Socio-Cultural

Economic

Forces that Shape opportunities and pose threats to a Company

Natural

Political Technological

The Company’s Macroenvironment Demographic

nitors population in terms of age, sex, race, occupation, location and other statis

Economic Factors that affect consumer buying power and patterns.

Natural Natural resources needed as inputs by marketers or that are affected by marketing activities

Technological Forces that create new product and market opportunities

Political Laws, agencies and groups that influence or limit marketing actions

Socio-Cultural

rces that affect a society’s basic values, perceptions, preferences, and behavior

Demographic Environment

nitors population in terms of age, sex, race, occupation, location and other statis

Population Growth Population Age Mix Gender Breakup of population Literacy level

Key Indian Demographic Trends Changing Age Structure Population is getting younger

Changing Family Structure

Marrying later, fewer children, working women, and nuclear family households

Geographic Shifts

Moving to the metros & mini-metros

Increased Education Increased college attendance and white-collar workers

Economic Environment

Economic paramete rs

Key Economic Concerns for Marketer s Changes In Consume r Spending Patterns

Changing income distributi on

RISE IN AFFLUENCE Income Class

1995-96 2006-07 (Households) (Households)

The Rich (over

1.2

5.2

Consuming Class

32.5

75.5

54.1

81.7

Aspirants (16,000-22,000)

44

20.2

Destitute

33

16.5

Rs.215,000)

(45,000-215,000)

Climbers (22,000-45,000)

(Rs. 16,000)

Natural Environment More Government Intervention

Anti Pollution pressures

Factors Affecting the Natural Environment

Increased Costs of Energy

Shortages of Raw Material

Technological Environment Rapid Pace of Change

High R & D Budgets

Issues in the Technological Environment

Focus on Minor Improvements

Increased Regulation

Political Environment

Increased Business Legislatio n

Key Trends in the Political Environme nt

Greater Concern for Ethics

Protectin g consumer

Socio-Cultural Environment

The influences in a society and its culture that change people’s attitudes, beliefs, norms, customs, and lifesty Tastes & Preferences We Have: 30 languages,200 mother tongues, 2000 dialects Complex Culture & Sub Culture Cultural transition Move from Traditionalism to Westernization

The Microenvironment Company

Publics

Forces Affecting a Company’s Ability to Serve Customers

Competitors

Suppliers

Intermediaries Customers

The Company’s Microenvironment Company’s Internal Environment Functional areas such as top management, finance, and manufacturing, etc.

Suppliers .

Provide the resources needed to produce goods and services.

Marketing Intermediaries Help the company to promote, sell, and distribute its goods to final buyers.

Customers Five types of markets that purchase a company’s goods and services.

Competitors Those who serve a target market with similar products and services.

Publics

Group that perceives itself having. an interest in a company’s ability to achieve its objectives.

. Suppliers

Provide the resources needed to produce goods and services Important link in the value delivery system

Treated 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

Customer Markets International Markets

Consumer Markets

Company Government Markets

Business Markets Reseller Markets

Competitors Competitors

Those who serve a target market with similar products and services.

. Includes substitutes besides scanning direct competitor

. Must understand competitor’s strengths

Competitive strategies should emphasize firm’s distinctive competitive . advantage in marketplace

Types of Types Of Publics Publics .