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  • 1. MARKETING MANAGEMENT Chapter 2 UNDERSTANDING THE MARKETING ENVIRONMENT
  • 2. Definition and Concepts
    • “ A company’s marketing environment consists of the actors and forces outside marketing that affect management’s ability to build and maintain successful relationships with target customers.” (Philip Kotler)
    • The microenvironment consists of the following actors close to the company that affect its ability to serve its customers: (1) The company (2) The suppliers (3) The marketing intermediaries (4) The customer markets (5) The competitors (6) The public.
    • The macro environment consists of the following larger societal forces that affect the microenvironment: (1) Demographic (2) Economic (3) Natural (4) Technological (5) Political (6) Legal (7) Cultural.
  • 3. Microenvironment Macro environment
  • 4. Opportunities
    • Examples of Opportunities Posed by Marketing Environment in India
            • The New Economic Policies of the Government of India in general.
            • The New Industrial Policy.
            • Liberalisation of industrial licensing.
            • Foreign Exchange Regulation Act (FERA) and Monopolies and Restrictive Trade Practices Act (MRTP) liberalization.
            • Curtailment of and disinvestments in public sector.
            • The New Trade Policy – lowering of import tariffs, abolition of import licenses, convertibility of rupee, globalisation, etc.
            • Fiscal and monetary reforms, banking sector reforms, capital market reforms.
            • Removal or phasing out of subsidies.
            • Encouragement to foreign direct investment (FDI).
            • Dismantling of price controls and introduction of market-driven price environment.
  • 5. Threats
    • Examples of Threats Posed By Marketing Environment In India
            • Entry of Multi-National Companies (MNCs) into the Indian market on a large scale increases the competition for products and services.
            • ‘ Survival of the fittest’ rule forces many weaker and small-scale companies to close down due to non-viability.
            • Big players start buying smaller players through mergers and acquisitions.
            • Removal of subsidy affects profitability and viability of many industries. (Fertiliser industry is one such affected sector where units had to close down or stop products of certain products).
            • Banks and insurance sector came under competitive environment and were compelled to operate viably, at par with the private sector.
            • In general, many industrial units across India faced a destabilization consequent to the economic reforms. Their markets, market shares and profits came under severe pressure and viability became a big question.