Prof Prashant Kumar Gupta
Jain College Of MBA and
Why To Study??
An understanding of macro and micro marketing
environment forces is essential for planning.
Helps a business to compete more effectively
against its rivals.
Assists in the identification of opportunities and
Enables an organization to take advantage of
emerging strategic opportunities.
Environment literally means the surroundings,
external objects, influences or circumstances
under which someone or something exists.
The environment of an organization is the
aggregate of all conditions, events and
influences that surrounds and affects it.
The external forces that directly and indirectly
influence an organization’s capability to
undertake its business.
The forces operating in a market place over
which a business has no direct control ,but
which shape the manner in which the business
function and is able to satisfy its customers.
Types Of Environment
Internal environment :
Forces and actions inside the firm that
affect the marketing operation composed of
internal stake holders and the other functional
areas within the business organization.
The forces close to the company that affects
its ability to serve.
It comprises all those organisations and
individuals who directly affect the activities
of a company.
Suppliers are either individuals or business houses.
They provide resources needed by the company.
The developments in the suppliers environment
have a substantial impact on the marketing
operations of the company.
Companies can lower their supply costs and
increase product quality to gain competitive
advantage in the market.
Supply shortages have to be fully monitored and
plans should be made to avoid it.
Help the company to promote, sell and
distribute its products to final buyers
Intermediaries take many forms.
Competitors are those who sell the goods and
services of similar description in the same
The company in order to come out successfully
has to adopt means which may help it to
Public is defined as any group that has an
actual or potential interest in or impact on a
company’s ability to achieve it’s objective.
The target market of the company is usually of
Government and other non- profit customers
Macro environment refers to those factors
which are external to company’s activities and
do not concern the immediate environment.
These are uncontrollable factors which
indirectly affect the concern’s ability to operate
in the market effectively.
The Demographic Environment
Study of human populations in terms of size,
occupation, and other statistics.
Important because it involves people, and
people make up markets.
Demographic trends include age, family
structure, geographic population shifts,
educational characteristics, and population
Currently 7 billion and expected to reach 8.1
billion by 2025
It means bigger market specially countries like
India, China, Africa, etc
But at the same time it can be harnessed only
when there is economic growth resulting into
higher purchasing power
Population Age Mix
India is a young country which will have a
median age of 30 in 2025.
Marketers need to identify the ‘Youth
About 74% Indians are literate. (Government’s
definition of being a literate is worth noticing).
But 82% of ‘Young India’ is literate.
Results are a big segment as consumers and
The Economic Environment
Economic environment consists of factors that
affect consumer purchasing power and
Under economic environment manager
generally studies:Trends of gross national product
Patterns of real growth in income
Variations in geographical income distribution.
Borrowing pattern ,trends and governmental
and legal restrictions.
Destitute: Annual household income of 16,000
Are not active participants for exchange of goods for
wide range of goods
Aspirants: Annual household income of 16,000 –
New entrants in the consumption market as real income
Climbers: Annual household income of 22,000 –
Have desire and willingness to by but limited cash
Consuming Class: Annual household income of
45,000 – 2,10,000
Majority of consumers, have money and willing to spend
Ernst Engel—Engel’s Law
As income rises:
Percentage spent on food declines
Percentage spent on housing remains
Percentage spent on savings increases
Percentage spent on luxury increases
Consists of institutions and other forces that
affect a society’s basic values, perceptions, and
behaviors like religion.
Core beliefs and values are persistent and
are passed on from parents to children and are
reinforced by schools, religion, businesses, and
Secondary beliefs and values are more
open to change and include people’s views of
themselves, others, organizations, society,
nature, and the universe
Socially responsible marketing is eliminating
socially harmful products.
Understanding the diversity is key to marketing
Product and Brand preferences have regional
Diversity affects the marketing communication.
Defines customers’ taste and preferences.
Involves the natural resources
that are needed as inputs by marketers or that
are affected by marketing activities
Natural Environment trends:Shortage of raw materials.
Limited quantities of non-renewable
Waste disposal, air/water pollutants.
Increased government intervention.
Kyoto and other initiatives.
80% people considered ‘The effect on
environment’ before buying a product in US.
More than 50% people asserted on purchase of
Responsible for breaking customer loyalty.
Many marketers used THE GREEN PITCH but
Lack of credibility
No willingness to pay extra for environment
Poor design and inappropriately placed
One of the most dramatic forces in changing
Creates new products and opportunities
Safety concerns increases costs
Challenge is to make practical, affordable
Big time gap between conceptualisation and
Consists of laws, government agencies, and
pressure groups that influence or limit various
organizations and individuals in a given society.
Key trends include:
Increased legislation to protect
businesses as well as consumers.
Changes in governmental agency
Increased emphasis on ethical
behavior and social responsibility.
Marketers must have good working knowledge
about laws related to competitors, consumers
Understand the Consumer Protection Act,
Ways To Respond To The
• React and
forces in the
to forces in