2. Marketing Environment
Philip Kotler :
“ A company marketing environment
consists of the actors and forces that
affect the company’s ability to develop
and maintain successful transactions
and relationships with its target
customers.”
Dr.S.G.Kulkarni 2
3. Marketing Environment
Micro environment Macro environment
Controllable Partially Uncontrollable
Co Organization Suppliers Demographic
Management Customers Economic
Resources Dealers Ecological
M Mix Competitors Technological
Community Political
( Social groups) Sociological
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4. Marketing Environment
The inputs concerned with micro
environment are –
Company organization
Suppliers
customers
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5. Marketing Environment
The outputs concerned with macro environment
are –
► Political
► Economical
► Technological
Macro environment factors may be –
Controllable or partially - controllable
Dr.S.G.Kulkarni 5
6. Micro environmental factors
Company :
Company organization consists of Board of
Directors and functional managers.
Marketing plans are drawn up as per the
philosophy of Top management
Marketing decisions like new products,
expansion, etc depend on the support of top
management. It depends upon finance,
managerial skills, organization’s strengths and
weaknesses.
Dr.S.G.Kulkarni 6
7. 1. Company - continued
Marketing plans should be in
harmony with policies of other
departments such as production,
purchase, finance, personnel, etc
For ex: quality depends upon
production policies
Advertising and sales promotion – on
budgets
Dr.S.G.Kulkarni 7
8. 2. Suppliers
• Supply raw materials, plant and
equipments, human resources,
technology
• Their strategies affect ours
• If they increase prices, we have to
revise price structure
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9. 2. Suppliers - continued
• Decisions like ‘ make or buy’ depend upon
suppliers
• Depends upon
– Right supplier
– Right place
– Right time and lead time
– Right price
– Right quantity
– Right quality
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11. 3. Intermediaries
Wholesalers, retailers, agents, transporters,
warehousers, ad agencies, etc.
This is a choice of channel of distribution
Dr.S.G.Kulkarni 11
12. 4. Customers
Purchase requirements vary from customer
to customer
Individual customers are influenced by
cultural, social and psychological factors
They are large in number, scattered, poorly
informed, buy in small quantities and
frequently and are guided by personal
considerations
Dr.S.G.Kulkarni 12
13. 4. Customers
Industrial producers are limited in number,
geographically concentrated, buy in large
in bulk, demand is derived, buy on
reciprocal basis, depend on lease hold.
Dealers buy for resale.
Government buys for public welfare,
defence
Dr.S.G.Kulkarni 13
14. 5. Competitors
Supply similar products or substitute
products
Competitors adopt different actions for
getting greater share of markets
All firms compete with each other for
consumers buying power.
Dr.S.G.Kulkarni 14
15. 6. Public
Financial public: financial institutions,
investment houses, insurance co,
Government public:
Citizen action public: consumer organizations,
environmental groups, minority groups, etc
General public: public image
Internal public: employees, Board, labour
unions, press and media
Dr.S.G.Kulkarni 15
16. Macro environment
1. Economic
Economic forces influence both
marketers and the consumers
Economic forces include –
Competition – monopoly, oligopoly
Buying power
Willingness to spend
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17. Macro environment
1. Economic - continued
Economic conditions include
Economic development
National income
Standard of living
State of agriculture
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18. Macro environment
1. Economic - continued
Business cycles
Interest rate
Price levels
Fiscal policies
marketers have to take into
consideration the changes taking place
in agriculture and industry
Dr.S.G.Kulkarni 18
19. 2. Demography
Demography gives ‘consumer profile’
It is the study of population in respect of its
size, density, location, age, race,
occupation, marital status, education, sex
composition etc
All these factors influence marketing
decisions
Dr.S.G.Kulkarni 19
20. Acronyms used in respect of age
SKIPPIES
MOBY’s
DINKS
PUPPIES
WOOFS
Dr.S.G.Kulkarni 20
21. 2.Demography - continued
School Kids with Income and Purchasing
Power
Mother Older, Baby Younger
Double Income, No Kids
Poor Urban Population
Well Off Older Folks
Dr.S.G.Kulkarni 21
22. 2.Demography - continued
► Mexico is a nation of young population
► Japan – ‘old generation’
► America was a melting bowl. Now it is a
‘Salad bowl’ with Chinese, Filipinese,
Japanese, Asians, Koreans
► Ads – show women as decision makers due
to increase in education
Dr.S.G.Kulkarni 22
23. Demography - continued
Education
► Illiterates
► High school drop outs
► Matriculates
► Graduates
► Professional degrees
► Post graduates
Dr.S.G.Kulkarni 23
24. 2.Demography - continued
Buying habits are determined by
income, education, age, family
composition and other demographic
factors
It helps in - Market segmentation,
demand forecasting, determination of
market potential
Dr.S.G.Kulkarni 24
25. 2.Demography - continued
India’s population is roughly 108 crores
75% of population lives in villages
Rural marketing offers immense
opportunities and challenges to a creative
marketer
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26. 2.Demography - continued
You find that the demand is increasing not
only for farm products, but also for non-
farm products
Dr.S.G.Kulkarni 26
27. Technology
It has a definite impact on buyers and
marketers decisions
It provides mechanical, physical and numerous
other processes which help in attaining higher
standard of living
It has adverse effects like pollution,
unemployment, increase in crime rate, etc
Marketers must be aware of new
developments in technology.
Dr.S.G.Kulkarni 27
28. Technology-continued
Technological developments may put
some people out of business and at the
same time, open up new business
opportunities to others
For ex: introduction of synthetic fabrics
drove away sheep raisers and cotton
growers out of business
Dr.S.G.Kulkarni 28
29. Solar pocket calculators and hand
cameras
CDs and Video tapes
Virtual reality applications in Marketing is
a new application due to technological
progress
Dr.S.G.Kulkarni 29
30. Technology-continued
Technological developments have
improved the standard of living and
given more leisure time
Improvements in communication,
transportation
Technology has given wonder drugs like
Ampicilliin, by- pass surgery,
Dr.S.G.Kulkarni 30
31. Technology-continued
Technology grows out of research
made by business, universities
Most of the products that we talk today
were not there a few years back. For
example, Computers, Photostat, laser
technology, scanners.
Dr.S.G.Kulkarni 31
32. 3. Natural factors and ecological factors - also
These also affect the pattern of industries
and marketing
Industries create pollution of air, water and
environment
The package in the form of plastic bags
and bottles create a lot of problems
Some governments have banned the use
of plastic bags.
Dr.S.G.Kulkarni 32
33. Political factors
Marketing is affected by monetary, fiscal,
import and export policies
Some of the Acts applicable are as follows:
Essential Commodities Act
Prevention of Food Adulteration Act
Trade and Merchandise marks Act
Packaged Commodities Act
Companies Act
Dr.S.G.Kulkarni 33
34. Political factors - continued
Political and legal factors are inter connected
Discontinuation of – CCI, FERA, IDRA
Introduction of SEBI, FEMA, VAT
Rules allow private participation in transportation
, telecom, airlines
Dr.S.G.Kulkarni 34
35. Social-Cultural environment
Advertisements and culture
Some ads are banned on TVs
Festivals like Ganesh festival, Diwali, Id-
Milad, Christmas,
Dress styles are different
School uniforms
Dr.S.G.Kulkarni 35
36. Cultural factors - continued
• Food habits
• Internet practice
• Fast foods – Pizza hut, Ken Fried Chicken
Dr.S.G.Kulkarni 36
37. Cultural factors - continued
• There are several movements like trade
union movement, consumer movement,
women's lib, deprived classes movement ,
etc.
• These have their own expectations from
the market. If they are against their ideas,
they boycott the products
Dr.S.G.Kulkarni 37
38. Cultural factors - continued
Cause related Marketing
1980 saw the advent of “ cause related
marketing”
The distinctive feature of case-related
marketing is the firm’s contribution to a
designated cause being linked to customers’
engaging in revenue-producing transactions
with the firm
Example: CRY, AWWA, WWF cards
Dr.S.G.Kulkarni 38
39. Cultural factors - continued
• Cultural and ethical forces are of vital
importance
Dr.S.G.Kulkarni 39
40. Responding to the marketing environment
There are two general approaches to
respond to marketing environmental
forces, viz., Passive approach and
Aggressive approach
Dr.S.G.Kulkarni 40
41. 1) Passive or reactive approach
Under this approach the marketing
strategy is subject to micro environment
with macro environment
Environmental objectives of 2010 are
set in 2000 and strategies are
developed in 1998 and the
organizational structure is established
in 1995
Dr.S.G.Kulkarni 41
42. 1) Passive or reactive approach - continued
• Stable environment is very rare. Turbulent
environment is common
• Marketing environment should be scanned
systematically. These guide marketing
opportunities
• Marketing strategy normally follows passive
approach that is coordinating micro
environment with macro environment
Dr.S.G.Kulkarni 42
43. 1) Passive or reactive approach - continued
• India has opportunities for handcraft
goods, ready made garments, fast food
products, software development, call
centres and those areas which are labour
intensive
Dr.S.G.Kulkarni 43
44. 2) Aggressive approach
Marketing manager tries to influence
environmental forces so as to create
market opportunities.
A firm can be able to influence the shape
of legislation through lobbying
A single organization cannot influence –
population, economic condition
Dr.S.G.Kulkarni 44
46. Indian Marketing environment
Prosperity in rural area
Overflowing unaccounted money everywhere
Inflationary condition [ inflation is a permanent
guest]
Aggressive advertising on TV inspiring children
and women. Consumer is a ‘King’
Dr.S.G.Kulkarni 46
47. Indian Marketing environment - continued
Middle class explosion - ‘Consumption
community’
Better educated and exposed to the life styles
of the rich
Their aspirations have been constantly growing.
They often spend more than what they earn
Dr.S.G.Kulkarni 47
48. Middle class explosion
Their expenditure on non-food items is continuously
Our market is on par with UK, France, West Germany
More disposable income
Spend more on non food items
Invest in stock market
Dr.S.G.Kulkarni 48