1. MARKETING ENVIRONMENT
Slides Prepared and Presented
by
GURU RAJ

2. Some Important Terms Related to Company as
well as to Marketing Environment:
Market Segment:
A group of consumers who respond in a similar way to a given set of marketing efforts.
Market Segmentation:
Dividing a market in to distinct group of buyers who have different needs, characteristics
or behaviors and who might require separate products or marketing programs.
Target Market:
A set of buyers sharing common needs or characteristics that the company decides to
serve.
Market Targeting:
The process of evaluating each market segment's attractiveness and selecting one or more
segments to enter
Positioning:
Arranging for a product to occupy a clear, distinctive and desirable place relative to
competing products in the minds of target consumers.

3. Business Portfolio:
The Collection of the business and Products that make up the company.
Portfolio Analysis:
The process by which management evaluates the products and business that make
up the company.
Market Penetration:
A strategy for company growth by increasing sales of current product to current
market segment without changing product.

4. Market Development :
A strategy for company growth by identifying and new market segments for current
company products.
Product Development :
A strategy for company growth for offering modified or new products to current market
segment.
Diversification:
A strategy for company growth starting up or acquiring business outside the company’s
current products and markets.
Downsizing:
Reducing the business portfolio by eliminating products of business units that are not
profitable or no longer fit the companies overall strategy.

5. Marketing Environment
 Marketing Environment refers to processes
and factors which have decisive influence on
marketing objectives and policies of the firm.
 The actors and forces outside the marketing
that affects marketing management’s ability
to build and maintain successful profitable
relationships with target customers.

7. Marketing Environment
 Micro Environment  Macro Environment
 Controllable factors:  Uncontrollable
 Company Management, Factors:
Resources, Marketing Mix.
 Demographic
 Partially Controllable Forces:
 Suppliers  Economic
 Customers  Natural
 Public  Technological
 Competitors
 Political
 Marketing Intermediaries
 Community or Social Groups
 Cultural

8. Marketing Environment
 Micro Environment  Macro Environment
 The actors close to the  The Larger Societal Forces
company that affects its that affect Micro
ability to serve its environment-
customers-the company, Demographic, Economic
suppliers, Customers, Natural, Technological
Public, Competitors, Political, Cultural Forces.
Marketing Intermediaries,
Community or Social
Groups.

9. Micro
Environment
Of
Marketing Environment

10. Micro Environment
The Company:
Top management sets the company's mission,
objectives.
Designing Marketing Plans.
Integrated activity with other departments like: finance,
human resource, research and development.
“Think customer” philosophy.

11. Micro Environment
Suppliers:
Provide resources needed by the company to produce its goods and
services.
Supplier problems can seriously affect the marketing .
Marketing managers must watch supply availability and costs.
Supply shortages or delays, labor strikes, and others events can sales in
the short run and damage customer satisfaction in long run.
Rising supply costs may force price increases that can harm company’s
sales volume.

12. Micro Environment
Marketing Intermediaries:
Firms that help the company to promote, sell and
distribute its goods to final buyers.
Resellers: are the distribution channels firms that help
the company find customers or make sales to them.
Ex:
Financial Intermediaries:
Include banks , credit companies, insurance companies and other businesses that help
financial transaction or insure against the risk associated with the buying and selling of
goods .

13. Micro Environment
Competitors:
Customer satisfaction plays the key role.
Publics or Community or Social Groups.
Any groups that has an actual or potential interest in or
impact on an organization’s ability to achieve its
objectives.
There are different types of publics:

14. Micro Environment
Financial Publics:
this group influence s the company’s ability to obtain funds, Banks , investment
houses, stockholders are the major financial publics.
Media Publics:
this group carries news features and editorial opinion, it includes news papers, magazines and
radio and television stations.
Ex: THE TIMES OF INDIA, THE WEEK, etc

15. Micro Environment
Government Publics:
Management must take government developments in to account. Marketer must often
consult the company’s lawyers on issues of product safety, truth in advertising and other
matters.
Amir Khan – Brand ambassador of Ministry of Tourism & Hospitality promoting the
campaign of Indian tourism industry with the add
“ ATHITHI DEVO BHAVA”
Citizen-action Publics: A company’s marketing decisions may be questioned by consumer
organizations , environmental groups , minority groups, and others. Its PRD ( Public
Relations Department) can help it stay in touch with consumer and citizen groups.
Transfer of Tata Nano plant from singoor to Gujarat due to protest of the acquisition of the
land by farmers.
Local Publics: neighborhood residents and community organizations.
Ex: Brahmin Associations.
General Public: observing the process of the buying plays key role.
Internal Publics: Company employees.

16. Micro Environment
Customers:
based on the type of the markets i.e.
FMCG Market or Consumer Market
Business or Industrial Market s
Reseller Markets: retailer, wholesaler, dealer etc .
Government Markets
International Markets.

17. Macro
Environment
of
Marketing Environment

18. Macro Environment
Demographic Environment
Demography:
The study of human populations in terms of Size,
location, age, gender, race, occupation and other
statistics.
Increasing Population
A growing Middle Class: in India
Growth in the rural population
Changing Family System
The Changing the role of the women
A Better Educated, More White collared,
More professional population.

19. Macro Environment
A growing Middle Class in INDIA:
According to Mckinsey Global Institute (MGI) has divided the Indian
population in to Five Economic Classes on the basis of their real annual disposable
income.
Economic Classes Annual Income Profile
Source: The Bird of Gold- The Rise of Indian Consumer Market by MGI

20. Macro Environment
The growth of the Indian Rural Population:
The MGI India Consumer model has forecasted that population of rural India will
be 906 Million by 2015
The demand for rural India is expected to grow at 5.1 % during the next 15
years.
By 2025 rural consumption will nearly triple creating a market over Rs 26
trillion.
Today the main constraints of marketers in rural market are:
Proper Infrastructure such as road, telecommunication connectivity, and
reliable supply of electricity which affect distribution infrastructure such as
cold storages.
Changing Family System
Coming out from JFS: Joint Family System.
Adopting NFS and DISK Culture :
Nuclear Family System: Father, Mother and Children.
DISK: Dual Income( Both father and Mother) and Single Kid culture is more popularized
in India.

21. Macro Environment
Changing the role of WOMEN in India:
Minimum qualification is graduation or even post graduation.
Women= Men Philosophy,
33% Reservation by Government of India
Gender Discrimination is the past thing.
Many women head organizations and have men reporting to them
Ex: Indira Nooyi Kiran Bedi
CEO Pepsi Co.Ltd First Indian Women IPS officer
Shikha Sharma Aishwarya Rai
CEO Axis Bank.Ltd Miss World & Brand Ambassador to
Many MNCs
Chanda Kochar
CEO ICICI Bank Ltd

22. Changing the role of WOMEN in India: Macro Environment

23. Macro Environment
A better Educated more White Collared, More Professional Population :
Indian Population is becoming better educated.
The rising number of educated people will increase in the demand for quality products, books,
magazines, travel, personal computers & Internet services.
There are near 220 MBA Colleges in Karnataka state which are recognized by UGC &
NAAC(National Assessment Accreditation Council, New Delhi.) AICTE( All India Council
for Technical Education) AIMA ( All India Management Association) and Approved by
Ministry of HRD (Human Resource Development) Government of INDIA.
Source: MBA-PGCET 2010 List of Approved Institutions released by Government of
Karnataka .

24. Macro Environment
Economic Environment
Demand Determinants:
High rate of economic growth creates more employment, national income of
individuals and institutions improves standards of living .
Demand is determined by the level of income of the people their spending habits ,
earnings gives purchasing capacity to people.
Engle's law:
“ as the income rises the % of income spent on food declines and
non food items increases”
Items % of spending
Food & Beverages 58.8
Clothing and Footwear 11.4
Rent, Fuel and Power 10.6
Others 19.2
Business Standard Review s:Average Indian spending capacity

25. Macro Environment
Other Economic Factors like:
Inflation
Business cycle
Agriculture
Industrial Scenario
Plays Very Important role in making the marketing strategies
like:
NPD
MR
SCM
IMC.

26. Macro Environment
Natural Environment:
Natural Resources that are needed as inputs by marketers or that
are affected by Marketing Activities.
Marketer s should be aware of several trends in the marketing
environment, which involves:
Shortages of Raw Materials, which may leads to increase the
production cost.
Increased Population.
Increased Governments Intervention on NRM i.e. Natural Resource
Management.

27. Macro Environment
Environmental Sustainability:
Developing strategies and practices that create a world economy that
the planet can support indefinitely.
General Electric using its “ecomagination” to create products
for a better world – cleaner air craft engines, cleaner
locomotives, cleaner fuel technologies.
In 2005 GE launched its Evolution series locomotives , Diesel
Engines that cut fuel consumption by 5% and emissions by
40% compared to locomotives built just in a year earlier.
HP( Hewlett- Packard) pushing legislation to force recycling of old
TV’s, Computers and other Electronic Materials

28. Macro Environment
Technological Environment
Technology - Changing Peoples Destiny.
Forces that create new technologies , creating New Product( NPD)
and Market opportunities.
The growth of RFID(Radio Frequency Identification) transmitters or Smart Chips that can
be embedded in the products we buy.
Beyond benefits to consumers the RFID chips also give producers and retailers an amazing
new way to track their products electronically-any where in the world any time
automatically from factories to warehouses , to recycling centers.
One study has found that by using RFID,
Improves its inventory accuracy by 13% Saving and millions and millions of dollars.
Marketing through Social Networking:

29. Technology - Changing Peoples Destiny. Macro Environment

30. Macro Environment
Political Environment
Laws government agencies and pressure groups that influence and limit various
organizations and individuals given society.
On May 1998 India conducted Second Nuclear Bomb Test @ Pokhran, the event which
will give far reaching our national and international marketing scenario.
Swadeshi Jagaran Manch has been formed to boycott products of MNCs in India and
encourage 100% Indian goods.

31. Influence of Politics on Marketing Macro Environment

32. Macro Environment
Legal Environment
The central and state government have enacted a number of laws to regulated business
and commercial activities in the country. The marketing managers have to ensure that
all policies are within the statutory framework. Important statues are:
The Indian Sales of Goods Act 1930.
Indian Contract Act 1892.
Patent Act 1970.
The Essential Commodities Act 1951.
Trademarks And Merchandise Act.
Consumer Protection Act 1986.
Standard Weights and Measures Act Etc

33. Macro Environment
The Legal Environment Objectives:
Protecting the consumers from unfair practices.
Protecting companies from unfair competition.
Protecting social interest and to secure smooth business atmosphere

34. Legal Environment and Marketing Macro Environment

35. Macro Environment
Cultural Environment
Institutions and other forces that affect society's basic values , perceptions,
preferences and behaviors.
Elements of Cultural Environment:
Religion and Caste
Language
Festivals
Customs
Food Habits

36. Macro Environment
28 States
1618 Languages
6400 Castes
6 Religions
29 Major Festivals
&
1 Country

37. Culture & Marketing
Macro Environment

38. Marketing
Assignments Environment
Define the Following:
Marketing Environment
Micro Environment
Macro Environment
What are the Controllable Uncontrollable & Partially Controllable factors.
Explain SWOT analysis choosing your own company.
Mc Donald has opened its restaurant and Bangalore explain different components of
Micro Environment affecting Mc Donald.
Adlabs is planning to set up chain multiplexers in tier II Cities.
Explain micro environmental factors will affect his new venture.