The Marketing Environment Prof. Kunal Gaurav Dhruva College of Management Hyderabad
Marketing Environment <ul><li>The marketing environment consists of the forces that are external to the marketing function...
Marketing Environment <ul><li>The overall marketing environment consists of the task environment and the broad environment...
ME: External Vs. Internal <ul><li>Internal forces are inherent to the firm and can be controlled by the management. Extern...
 
Macro Environment: Demographic Environment <ul><li>Demographics is a branch of sociology that deals with the study of the ...
Macro Environment: Political Environment   <ul><li>Government policies shape the economic conditions and trade relationshi...
Macro Environment: Economic Environment <ul><li>The economic performance of a country is measured by its Gross Domestic Pr...
Macro Environment: Socio-Cultural   Environment <ul><li>Socio-cultural forces refer to the attitudes, beliefs, norms, valu...
Macro Environment: Technology   <ul><li>Technology is regarded as the use of scientific knowledge and tools to solve speci...
Macro Environment: Natural Environment <ul><li>It is man’s duty to maintain the ecological balance. Technological developm...
Macro Environment: Legal Environment <ul><li>The laws and regulations of a country have a major impact on the way a compan...
Competitive Forces  <ul><li>It’s a situation, where two or more parties are fighting for the same resources. </li></ul><ul...
<ul><li>Monopoly:  It is a structure where one firm completely controls the supply of a product, which has no close substi...
<ul><li>Monopolistic competition:  In this structure, many firms compete with one another. Each firm has a relatively smal...
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Marketing 4

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Marketing 4

  1. 1. The Marketing Environment Prof. Kunal Gaurav Dhruva College of Management Hyderabad
  2. 2. Marketing Environment <ul><li>The marketing environment consists of the forces that are external to the marketing function of an organization but influence its marketing abilities, in dealing with customers. </li></ul><ul><li>Environmental forces are dynamic and any change in them brings uncertainties, threats and opportunities for the marketers. </li></ul><ul><li>An analysis of the external environment and identification of opportunities and threats is extremely important for the survival of a firm in the long run. Managers, who fail to recognize the changes, leave their companies vulnerable.  </li></ul>
  3. 3. Marketing Environment <ul><li>The overall marketing environment consists of the task environment and the broad environment. </li></ul><ul><li>The task environment includes the immediate actors involved in producing, distributing, and promoting the offering, including the company, suppliers, distributors, dealers, and the target customers. </li></ul><ul><li>The broad environment consists of six components: demographic environment, economic environment, natural environment, technological environment, political-legal environment, and social-cultural environment. </li></ul>
  4. 4. ME: External Vs. Internal <ul><li>Internal forces are inherent to the firm and can be controlled by the management. External factors cannot be controlled and usually affect the industry as a whole, rather than individual players.  </li></ul><ul><li>The external forces are divided into microenvironment and macro-environment.   </li></ul>
  5. 6. Macro Environment: Demographic Environment <ul><li>Demographics is a branch of sociology that deals with the study of the characteristics of human population such as size, growth, density, distribution, gender, and marital status. </li></ul><ul><li>Marketers are keenly interested in studying the demography, ethnic mix, educational levels, and standard of living of different cities, regions and nations because changes in demographic characteristics have a bearing on the way people live, spend their money and consume. </li></ul>
  6. 7. Macro Environment: Political Environment <ul><li>Government policies shape the economic conditions and trade relationships and are influenced by the political environment. Government policies influence the marketing decisions and strategies of a firm. </li></ul><ul><li>Organizations try to maintain good relations with elected political officials because of the following factors: </li></ul><ul><ul><li>Politicians are less likely to vote for laws that negatively affect the firms that support them, </li></ul></ul><ul><ul><li>Politicians exercise power over trade relations and they can create a favorable environment for international trade, and </li></ul></ul><ul><ul><li>They influence government spending and can help in acquiring trade contracts. </li></ul></ul>
  7. 8. Macro Environment: Economic Environment <ul><li>The economic performance of a country is measured by its Gross Domestic Product (GDP).  The gap in GDP between rich and poor countries has increased primarily due to higher population growth in poor countries. </li></ul><ul><ul><li>General economy </li></ul></ul><ul><ul><li>Business cycle - Growth/Prosperity, Recession, Depression , Recovery. </li></ul></ul>
  8. 9. Macro Environment: Socio-Cultural Environment <ul><li>Socio-cultural forces refer to the attitudes, beliefs, norms, values, and lifestyles of individuals in a society. These forces can change the market dynamics and marketers can face both opportunities and threats from them. </li></ul><ul><li>For example, as the lifestyles of people have changed significantly in the last one-decade, with both husband and wife in a family earning, the market for readymade foods and garments has increased significantly. </li></ul>
  9. 10. Macro Environment: Technology <ul><li>Technology is regarded as the use of scientific knowledge and tools to solve specific problems and perform tasks in an effective manner. </li></ul><ul><li>Technology can be regarded as both beneficial as well as dangerous for the very existence of mankind depends on the use or abuse of technology. </li></ul>
  10. 11. Macro Environment: Natural Environment <ul><li>It is man’s duty to maintain the ecological balance. Technological developments have led to ecological imbalances. </li></ul><ul><li>Examples are, global warming, Ozone layer depletion, and increase in harmful gases due to pollution. </li></ul><ul><li>Many companies have now realized their responsibility towards maintaining the ecological balance. Refrigerator manufacturing companies are indicating on the packaging that their products are CFC (Chloro Fluoro Carbon) free. </li></ul>
  11. 12. Macro Environment: Legal Environment <ul><li>The laws and regulations of a country have a major impact on the way a company conducts its business. </li></ul><ul><li>Marketing activities in particular are greatly influenced by legislation. </li></ul><ul><li>Ignorance of law is considered no excuse. Therefore, marketers must be updated with the important rules, regulations and Acts that have a significant effect on their businesses. </li></ul>
  12. 13. Competitive Forces <ul><li>It’s a situation, where two or more parties are fighting for the same resources. </li></ul><ul><li>The number of firms in an industry or those supplying substitute products affects the strength of competition. </li></ul><ul><li>Common competitive structures are: monopoly, oligopoly, monopolistic competition, and pure competition. </li></ul>
  13. 14. <ul><li>Monopoly: It is a structure where one firm completely controls the supply of a product, which has no close substitute. Due to the absence of competition, the firm controls the supply and price of the product, and can erect barriers for potential competitors. </li></ul><ul><li>Oligopoly: It is a structure in which a few sellers control the major supply of the product. Entry barriers in such industry structures are high and the actions of one player affect other players significantly. Companies operating in an oligopoly structure usually sell branded products. Marketing and advertising are the key features of such markets. </li></ul>
  14. 15. <ul><li>Monopolistic competition: In this structure, many firms compete with one another. Each firm has a relatively small market share. Marketers try to differentiate their offer from that of the competitors by varying their marketing mix to capture the market. They strive to make their products and services appear unique to the customer. </li></ul><ul><li>Pure competition: It is an ideal structure in which a large number of sellers compete to offer homogenous/relatively similar products. No single player can influence the supply or price of a product. Entry barriers in such an industry structure are negligible. Anybody can enter into such markets. </li></ul>
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