This document analyzes the marketing environment and provides examples of key factors that must be considered. It discusses both the microenvironment including suppliers, customers, competitors, and publics. It also examines the macroenvironment such as demographic trends, economic conditions, natural resources, technology, political landscape, and cultural values that influence marketing strategies. Understanding how these various forces interact is important for adapting to changes in the external environment.
2. Xerox invented photocopying and for decades
flat out dominated the industry it had created.
But Xerox’s harrowing experience provides a
cautionary tale of what can happen when a
company – even a dominant market leader -
fails to adapt its changing marketing
environment.
3. Xerox has rethought,
redefined, and
reinvented itself. The
company now
―connects closely with
customers in a content
rich digital
marketplace.‖
4. Two disciplined methods
Marketing Intelligence: The systematic Collection and
analysis of publicly available information about
consumers, competitors and developments in the
marketing environment.
Marketing Research: The systematic Design,
collection, analysis and reporting of data relevant
to a specific marketing situation facing an
organization.
5. Marketing Environment?
The actors & forces outside marketing that affect
marketing management’s ability to build and
maintain successful relationships with target
customers.
6. Actors close to the company that affect its ability
to serve its customers.
MICRO ENVIRONMENT
8. The Company
Top Management
Finance
Research & Development
Purchasing
Operations
Accounting
9. Suppliers
Provide resources needed by the company to
produce its goods & services.
Treated as Partners in creating & Delivering
customers value.
13. Publics
Any group that has an actual or potential interest in
or impact on an organization’s ability to achieve its
objectives.
Financial Public
Media Public
Government Public
Citizen Action Public
General Public
Internal Public
17. Demographic Environment
The study of human populations in terms of size,
density, location, age, gender, race, occupation and
other statistics.
18. Demographic Environment
Increasing Population
―1 Bn population in Asia will move to cities in next 20
years.‖ Haruhiko Kuroda, President Asian Development
Bank.
Rapid growth in urban population in Asia
In India, urban population to rise to 523 million by
2025
Source: Marketing Whitebook 2007-08, Businessworld, p.84
19. Demographic Environment
Growing Middle class
McKinsey Global Institute (MGI) has divided the Indian
population into 5 economic classes
Division based on real annual disposable income
20. MGI division of Indian Population
Deprived households
have an annual disposable income of less than Rs
90,000. The poorest economic class
Mostly unskilled or semi‐skilled workers on daily wages
Aspirers
have an annual disposable income in the range of Rs
90,000 to Rs 200,000
Spend most of their income on basic necessities
Small‐time retailers, small farmers, etc.
21. MGI division of Indian Population
Seekers
have an annual disposable income between Rs 200,000
and Rs 500,000.
Mostly white‐collar employees, mid‐level government
officials, newly employed postgraduates, medium‐scale
traders.
Strivers
have an annual income ranging from Rs 500,000 to Rs
1,000,000. Have a stable income source and access to
amenities
Mostly professionals such as lawyers, CAs, senior
government officials, rich farmers
22. MGI division of Indian Population
Global Indians
have an annual disposable income in excess of Rs
1,000,000 Creamy layer in society
Globe‐trotters with a high standard of living
23. Demographic Environment
Growth in the rural population
A changing family system
The changing role of women
Increasing diversity
24. Economic Environment
Factors that affect consumer buying power and
spending patterns.
Global Financial Crisis
Changing Income Distribution and consumer spending
patterns.
Ernst Engel—Engel’s Law
As income rises: The percentage spent on food declines
The percentage spent on housing remains constant
The percentage spent on savings increases
25. Natural Environment
Involves the natural resources that are needed as
inputs by marketers or that are affected by
marketing activities.
Shortages of raw materials
Increased pollution
Increase government intervention
Environmentally sustainable strategies
27. Political Environment
Laws and Government agencies that influence and
limit various organizations and individual in a given
society.
Laws covering issues like
Competition
Fair Trade practices
Environmental Protection
Product Safety
Consumer Privacy etc.
