The document discusses the marketing environment and its various components. It defines the marketing environment as the combination of internal and external forces that influence marketing activities. It can be categorized into the micro and macro environment. The micro environment includes internal factors like the company, suppliers, intermediaries, customers, competitors, and publics that are close to the company and can be controlled. The macro environment includes external uncontrollable factors like demographic, economic, natural, technological, political, and cultural forces that shape opportunities and threats. Understanding these environmental forces is important for marketers to develop effective strategies.

1. Marketing
Environment
1

2. Marketing Environment- Concept and Meaning
• Marketers operate in an increasing connected world.
They must be good at customer relationship
management and partner relationship management in
order to connect effectively with customers, other in the
company and external partners.
• However, to do this effectively, marketers must
understand the major environmental forces that
surround all of these relationships.
• Marketing environment is the combination of various
actors and forces that affect the performance of
marketing activities of a firm.
• It includes various internal and external actors and
forces that directly or indirectly influence the growth
and expansion of marketing firm in positive or negative
manner. 2

3. Marketing Environment- Meaning
• These forces or actors presents firms various opportunities
or threats as well as strengths or weakness.
• If these forces or actors expose marketing firms with
opportunities or strengths – it is said marketing firm
affected firm in positive manner, when firm is exposed
with threats and weakness, it is the case that firm is
negatively exposed.
• In conclusion, marketing environment consist of various
controllable and uncontrollable forces and actors that directly
or indirectly influence or affect the ability of firm to build
and maintain successful relationship with target
customers.
• Company, Suppliers, Marketing Intermediaries, Customers,
Competitors, Publics, political envn, economic envn, socio-
cultural envn, technological environment etc. are some of the
forces or actors of marketing environment. 3

4. Marketing Environment
• Marketing environment can be categorized in to micro and
macro environment.
• Understanding of marketing environment is essential for
managers who want to build a superior relationship with
customers and achieve the goal of profit generation
because forces or actors present in marketing environment
provides firms opportunities, threats, strengths and
threats.
• And managers who are aware about the presence of forces
or actors present in environment can develop plans and
policies for grabbing opportunities, maximizing strengths,
as well as countering the threats and minimizing
weakness.
• Thus, the proper monitoring and scanning of these
environmental forces determines the achievement of
organizational objectives and goals.
4

5. Characteristics
of Marketing
Environment
Dynamic
Complex
Long
Term
ImpactMulti
Dimensio
nal
Macro &
Micro
Related
with
SWOT
5

6. Dynamic
• Marketing environment is ever
changing.
• It never remains same. It keeps on
changing with the change in the
time, attitude, choice, likes and
dislikes of the customer.
• Policies, social and technology are
important factors, which are
responsible for the changing
marketing environment.
6

7. Complex
• There are different components of
the marketing environment. These
environmental components are
classified as the internal and
external components.
• Such components affect the
marketing activities.
• It is very difficult to make the
prediction that which factors have
the effect on marketing.
• To get the clear relationship within
these factors is very complicated.
7

8. Long -Term
impact
• Macro factor of marketing
environment like economic,
political, technological, socio-
cultural etc, provides long term
impact to an organization.
8

9. Multi
dimensional
• Marketing environmental affect
positively and negatively.
• Some organizations are affected
positively by some factor of
environment likewise some are
negatively affected by this factor so
we can say that it is multifaceted or
multidimensional.
9

10. Micro and macro
• Marketing environment consists of
micro an macro factors.
• The company, suppliers, marketing
intermediaries, customers,
competitors and publics are the
factors of micro environment.
• Demographic , economic, natural,
technological, political, and cultural
environment are factors of macro
environment. 10

11. Complex
• There are different components of
the marketing environment. These
environmental components are
classified as the internal and
external components.
• Such components affect the
marketing activities.
• It is very difficult to make the
prediction that which factors have
the effect on marketing.
• To get the clear relationship within
these factors is very complicated.
11

12. Related with
SWOT
• Internal or micro environmental
factors provide strength and
weakness to the organization and
external or macro environmental
factors provides strength and
weakness to the organization.
12

13. Marketing
Environment
Micro
Environment
Macro
Environment
13

14. Micro Environment
14

15. • Micro environment of marketing refers to the actors or
forces close to the company that affect its ability to serve its
customers.
• Micro marketing environment are also known as internal
marketing environment, which are under the control of
marketing firms.
• The components or actors of micro marketing environment
provides strengths and weakness to the firms.
• In order to build relationships with customers by creating
customer value and satisfaction marketing managers need
to work closely with other departments of organization,
suppliers, marketing intermediaries, customers competitors
and various publics, which are the actors or components of
micro environment. 15

16. Components of
Micro
Marketing
Environment
The company
Suppliers
Intermediaries
Customers
Competitors
Publics
16

17. The Company
 In designing marketing plans,
marketing management takes
other company groups into
account- group such as top level
management, finance, R&D, HR,
purchasing, accounting.
 All these group within
organization form internal
environment.
17

18. Suppliers
 Suppliers form an important link in the
company’s overall customer value delivery
system.
 They provide the resources needed by the
company to product its goods and services.
 Suppliers problems can seriously affect
marketing.
 Marketing managers must watch supply
availability-supply shortages or delays,
labor strikes, and other events can cost
sales in the short run and damage customer
satisfaction in long run.
18

19. Marketing
Intermediaries
• Marketing Intermediaries are people,
group or institutions who help
business organizations promote,
distribute and sell products to the
final consumers.
• They include resellers, physical
distribution firms, marketing service
agencies and financial
intermediaries.
19

20. Customers
• Customers are those parties who purchase
products for various purposes.
• There are four types of customers:
consumers-buys goods for consumption
purpose, business buyers- buys goods for
further processing or for use in their
production process, resellers- buys
products to resell at a profit and
government buys goods for public welfare.
• Each type of customers have special
characteristics that call for careful study by
the seller.
20

21. Competitors
• The marketing concept states that to be
successful, a company must provide
superior customer value and satisfaction
that its competitors do.
• Competitors are those business
organizations who product similar
goods as our customer do and serve
same class or segment of customers.
• Companies must gain strategic
advantage by positioning their offerings
strongly against competitors offerings in
the mind of customers.
21

22. Publics
• The company’s marketing
environment also includes various
publics.
• A public is any group that has an actual or
potential interest in or impact on an
organization’s ability to achieve its
objectives.
• There are seven types of publics: financial
publics, media publics, government
publics, citizen action publics, local
publics, general publics, internal publics.
22

23. Macro Environment
23

24. Macro Environment
• Macro environment refers to all the external and
uncontrollable forces that influence an organization.
• They are the forces that shape opportunities and pose
threats to the organization.
• For a company to sustain and succeed in an ever-
changing marketing environment, it is important to
understand the dynamics of macro environment.
• The major components of macro environment are as
follows:
24

25. 1. Demographic environment
• Demography is the study of human population in terms
of size, density, location, age, gender, race, occupation,
and other statistics.
• The demographic environment is of major interest to major
interest to marketers because it involves people, and people make
up markets.
• Marketing activities are highly influenced by demographical factors
of certain location.
• the explosive world population growth has major implications for
business. A growing population means growing human needs to
satisfy. Depending on purchasing power , it may also mean growing
market opportunities.
• Thus, marketers keep close track of demographic trends and
developments in their markets, both at home and abroad. They track
changing age and family structures, geographic population shifts,
educational characteristics and population diversity.
25

26. Demographicenvironment Components
i. Population size:- People make up market for the products. The market segments
having large size of population are attractive for the marketers. International
marketing has been attracted towards the markets of India and China due to the large
size of population. Some developed countries especially European countries are
worried about negative growth rate of population. Many primary schools in Norway
have been closed due to lack of children. In such situation negative growth rate in
population erodes marketing opportunities for child related products like toys,
diapers etc.
ii. Growth of population:- Growth of population helps to expand the size of market for
a product or goods but, growth in population in poor countries contracts the market.
If the rate of population growth goes on increasing, then the demand for the products
also goes on cumulating. On the other hand if the growth rate is small, this means the
market for the company's products is also small.
iii. Migration:- Migration is a process in which people go from one place to another for
their settlement. When people migrate they take their consumption behavior with
them. They want to get the same products that they used to consume before
migration. This creates marketing opportunities for certain type of products. After
many people migrated from Hills to Terai, the demand for colorful dresses has been
increase considerably in the market of Tarai. 26

27. Demographicenvironment Components
Iv Urbanization:-Urbanization brings a change in the life-style of people.
Even the people coming from village to town start buying modern goods
to adjust themselves in urban life style. People living urban area are
fashion conscious. So they buy incredible varieties of goods. This leads
to increase in the demand for products and creates opportunities for
marketer.
v. Age mix:- Consumers of different age groups demand for different types
of product. The demands for products made by young aged people and
old aged people do not match. Likewise youngster and old aged people
exhibit different types of buying behavior. Youngsters make emotional
buying whereas old aged people make rational buying.
vi. Household:- Changing trends of joint family to single family directly
affect the marketing activities to the marketing manager. For example 50
kg pack of rice is change in to 5 kg pack of rice.
vii.Level of education:- Educated customer emphasis on quality of the
product rather than price but uneducated people emphasis on price
rather than quality so marketing activities are affected by level of
education of the target customer.
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28. 2. Economic environment
 Markets require buying power as well as people. The
economic environment consists of factors that affect
consumer purchasing power and spending patterns.
 This environment influence resource allocation, cost, profit
and consumers spending significantly.
 For example, a rise in the inflation rate of any economy
would affect the way company price their products and
services. It would affect purchasing power of consumer and
change demand and supply models for that economy.
 A marketing program is affected by such economic factors
like the current and anticipated stage of the business cycle,
inflation, and interest rate.
28

29. EconomicEnvironment Components
i. Economic system:-
 The success or failure of marketing highly depends on economic
system. Generally there are three types of economic system. They are
free market economy, centrally planned and mixed economy. In
free market economy private sector exercises or participates in the
market freely. In centrally planned economy freedom for private
sector is rare. Public enterprises play a dominant role in centrally
planned economy. In mixed economy both private sector and public
sector play have equal opportunity.
ii. Business Cycle:-
 The business cycle goes through four stages namely prosperity,
recession, depression, and recovery. Marketing activities are
differently affected in different business cycle. Marketer can get
opportunities in prosperity stage rather than other stage. Recession
provides challenge to the marketing manager. 29

30. EconomicEnvironment Components
iii. Income distribution:-
 Income of the country and its proper distribution provides impact to the marketer.
On the basis of income distribution per capita income in different countries of the
world is different. In developed countries per capita income is high; in under-
developed and developing countries, it is low. So high per capita income people
involve marketing activities but other can not involve on it. So income of the country
and its distribution provides opportunities and threats to the marketing manager.
iv. Purchasing power:-
 Purchasing power of buyers directly affects marketing activities. It is the result of
income, economic system, inflation, and level of employment. High purchasing
power customers focus on quality and high price but low purchasing power
customer emphasis on low price product. So, marketing mix is affected by consumer
purchase capacity.
v. Inflation:-
 A general rise in the prices of goods and services is called inflation. When the price
rise at a faster rate than personal income, consumer- buying power decline. Inflation
rates affect government policies, consumer psychology and marketing activities.
During inflation, money loses its worth. Goods become unnecessarily expensive. So
consumers do not buy the durable items and have to reduce their consumption level.
30

31. EconomicEnvironment Components
vi. Credit availability:-
 Availability of credit increases buying capacity of consumers. In
Nepal, banks and finance companies have introduced hire purchase
schemes. They offer expensive and durable items or goods on the
installment basis. This has expended the market for consumer
durable items like motorcycle, motorcar, television, refrigerator etc.
vii. Regional economic group:-
 The regional economic groups provide protection and facilities to
their member country. ASIAN, EU, LAFTA, SAARC, SAFTA etc are the
major regional economic groups. Their economic policy and tax
directly affect to the marketer to perform the marketing activities.
Viii Economic policies and condition:-
 Monetary policy, fiscal policy, and industrial policy consist under
economic policies. They also affect marketing decisions.
31

32. 3. Natural environment
Natural environment involves the natural resources that are
used by the marketers as inputs.
Natural environment of marketing consists of all geographical
and physical forces such as natural resources, location,
topography, and climate. Marketer receives resources from
nature.
But now a day marketers are found using natural resources
unwisely. Scientists are giving warning that if the current trend
of using such resources continued in the next few decades then
the resources will be exhausted completely.
So, marketing managers are required to do marketing activities
considering various aspects of natural environment.
Natural environment is very important in a country like Nepal
where both opportunities and threats result from the country,
climate and location.
32

33. NaturalEnvironment Components
i. Natural Resources:-
 Marketing firms perform production activities getting raw materials from
nature. They extract some resources like oil, gas mineral and forest from
nature.
 Some country are rich in some are poor in terms of natural resources.
Easy availability and optimum use of natural resources help to reduce
production cost and price of product. This is opportunity for the business.
Scarcity of resources increase production cost and price of product which
is challenge for the marketing.
iii. Topography:-
 Topographical position of Nepal is very difficult. It creates problems in
transportation of raw materials and finished products.
 It plays an important role in marketing, particularly, in transportation of
raw material and finished goods.
 Distribution of products becomes easier and cheaper in plains than in
hills and mountain. Geographical Variation of target market provides
opportunities and threats to the marketing manager.
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34. NaturalEnvironment Components
iii. Climate:-
 Consideration of climate is essential to the marketers for doing their
activities. Mild and temperate climate is more suitable for marketing than
hot or very cold climate. The needs and wants of customers vary
according to climate of the country. In Nepal, different types of climate
can be found in different places. Marketing manager consider the target
market climate and perform marketing mix activities according to the
climate.
iv. Development of environmentalism:-
 Industrial development in the country is essential for its socio economic
growth. But some industrial activities inevitably damage the quality of
natural environment in different ways such as air pollution, water
pollution, soil pollution, acidic rain and so on. By this reason consumer
are consciousness towards the nature and environment which directly
affect the marketing activities.
v. Situation of Ecology:-
 Natural situation like pollution, natural disaster , earthquake , thunder's
etc creates impact on marketing activities. 34

35. 4. Technological environment
 Technology is very powerful since it can create or destroy the
entire business industry. Emergence of new technology can be
both beneficial and dangerous for an organization.
 If an organization can not adopt itself according to the
changing technology, it makes them weak to compete. If it
adopts the changing technology then, it can remain strong in
market against their competitors.
 Apart from these, technology has a great impact on our
lifestyle, our consumption patterns, and on our economic well-
being. Technology has made it possible to develop different
types of goods like airplane, plastics, television, computers,
vehicles etc.
 Technology influences marketing development in the field of
communication. Technology has given momentum to the
business transactions. Internet has profound effect on
marketing.
35

36. TechnologicalEnvironment Components
i. Levels of technology
 The types and levels may be low-level technology, advanced level of technology,
labor based technology, capital based technology and so on.
 In labor based technology, must of the works are carried out by the labor whereas
in case of capital based technology more capital are utilized to get the desire
output.
 The quality of the product producing by using advance technology is high whereas
quality of the product producing by using low level technology is low. Production
cost is also differing according to the use of level of technology.
ii.Technological Change
 Technology is dynamic. Its pace of change is very fast. Marketers should adopt
changing technological environment.
 As change of technology is rapidly, a marketer should carefully watch the pace of
technology change to compete with the rivals. A firm cannot control the
technology trends but it has to adopt the change. This will help to gather
opportunities by introducing new and innovating technologies.
36

37. TechnologicalEnvironment Components
iii. Research and development budget
 Research and development budget plays an important role in
marketing. Research and development is the main basis for new
innovation and new product development.
 If the organization can allocate the research and development budget
than it gets market opportunity otherwise it cannot get new market
opportunities.
iv. Technology Transfer
 Technology transfer is the transfer of new technology from the
originator to a secondary users, especially from developed to
developing countries in an attempt to boost their economies.
 It can be transferred from company to company or nation to nation.
The various methods of transferring the technology are globalization,
project, trade, technical assistant, training and publication etc. Such
technology transfer affects the marketing activities.
37

38. 5. Socio - cultural environment
 Human is the social animal and like to live in the society. They
perform various activities while they are in the society. These social
activities that people performs in the society are called culture.
 In other words socio-cultural environment is the aggregate of social
and cultural forces. Socio-culture environment is made of institutions
and other forces that affect society's basic value, perception,
preference and behavior.
 These socio-cultural forces are changing in nature. Various factors of
socio culture environment are customs, language, tradition, religion,
attitude, belief, value, housing, work of art etc.
 All these factors highly influence the marketing activities due to
difference in consumption behavior, like and dislike of the customer
and their choice. The marketer must meet these changing forces.
38

39. Socio-culturalEnvironment Components
i. Life style
 Life style of people changes with the changing society. The life style of
people is expressed through the way they act, behave and speak. The
change in the ways of living also affects marketing. Luxurious lifestyle or
fashionable life style would increase demand and wants in market.
ii. Family and social class
 A family is a very important part of society. it is the predominant
component of socio-cultural environment. Needs, wants and demands
of the family changes with time and Size of the family which affects
marketing activities. Society is classified into high, middle, and low class.
People behave according to their class and have greater impact in
marketing activities.
iii. Attitude
 An attitude is an expression of favor or disfavor toward a person,
time, leisure, work guests business or event. It can be positive or
negative. It is the outcome of education, beliefs, and values. Attitude of
the people affects behavior of person, activities, and belief. Attitude thus
has greater impact on marketing. 39

40. Socio-culturalEnvironment Components
iv. Religion
 people's activities are largely directed by their religious belief. People's needs, wants,
and interest vary from religions, to religions. It has greater impact on marketing
activities. So, to succeed in the market a marketer should well address the religious
faith of people. For example in Hindu religion, customer may purchase the products
on the special occasion like Dashain and Tihar whereas a Christian will purchase high
during the Christmas.
v. Language and Education
 Language is a media to convey message from one person to another. Language differs
from country to country. Language thus has great impact on marketing activities and
business organization directly. Similarly, managing the economic and business
activities requires talented manpower. They must be rational in decision making. Well
educated people perform marketing activities rationally whereas illiterate people are
less rational towards marketing activities.
vi. Beliefs
 Belief is a state of the mind, treated in various academic disciplines, especially
philosophy and psychology, as well as traditional culture, in which a subject roughly
regards a thing to be true. Beliefs of person or society also affect marketing decisions.
The Nepalese people believe in fate. They have the concept that success and failure
depends on the wish of God. The result of any efforts is looked as the result of God's
wish. Almost Nepalese do not buy new clothes on Monday. 40

41. 6. Political-legal Environment
 Political- Legal system is a broad term, which governs the
nation. It formulates all system for a nation.
 Political environment of a country has an important
impact on the marketing activities. laws and political
systems shape the economic activities in a country.
Political factors include tax policies, fiscal policy, trade
tariffs etc. that a government may levy around the fiscal
year and it may affect the business environment to a great
extent.
 A well –conceived regulation can encourage completion,
ensure fair market, fair trade, environment protection,
product supply, truth in advertisement etc.
41

42. Political-legalEnvironment Components
i. Laws
 Law determines the job, duties and authorities of every sector of the country.
Legal provision regarding product standard, movement of goods, import and
export restriction, patent and copyright, foreign regulation affects marketing
activities.
 Government formulates number of laws and acts to regulate the activities of
business organization. Import and export Act, company act, income tax act, value
added tax Act, Custom Act, Foreign investment Act, Private firm registration act
etc.
 Marketing manager must have proper knowledge of such Acts, and impacts on
business. It is because marketers cannot go against government Acts, rather they
need to strictly follow such Acts in course of doing their activities.
ii. Government Policies:-
 Government policies define the methods or plans of governing the nation.
Government makes different policies like monetary policy, fiscal policy, industrial
policy, and other trade related policies that affect marketing activities. Business
organization need stable government policies for their growth and development.
In Nepal, the government changes frequently and new policies are enacted after
the change in government. This causes various problems to the business
organization. 42

43. Political-legalEnvironment Components
iii. Pressure group
 Marketing activities are also influence by many pressure groups ( Consumerists,
environmentalists, feminists etc). These pressure groups want to optimize their own
interests. Pressure groups also pressurize the government for the enactment of strict
laws to control the activities of marketing firms. Environmentalists call for marketer
to undertake green marketing. Consumerists blame the marketers for unequal
distribution of goods in different markets. Feminist blame the marketers for excessive
use of female models in advertising campaigns. So, marketers are required to address
the pressure while carrying out their activities.
iv. Political stability
 The government stability gives the certainty of government policies. If there is no
stability of government policies will change frequently. Due to the changing policies
and strategies of government, no plan will be complete or successful. In such
condition the market will adversely be affected by the frequently changing
government. In other words, it will cause disturbance in the business performance.
v. Government agencies
 Government agencies are administrative units of government that are tasked with
specific responsibilities. Such agencies perform remaining under the rules and
regulation of government. Such agencies provide license, fix quotas, provide loan, and
provide relief to industries. Positive activities of government agencies towards
business sector provide opportunities to marketing and negative activities of
government agencies towards business sector provide threats to marketing. 43