The process of gathering information regarding the company’s external environment, analyzing it, and forecasting the impact of whatever trends the analysis suggests.

1. Dynamic Marketing
Environment

2. Outline
• Concept of Environmental Monitoring
• How external environmental forces such as
Demographics, Economic conditions,and Social and
Cultural trends can affect an organization’s marketing.
• How external forces such as markets, as well as
suppliers and intermediaries that are specific to a
given firm, can affect its marketing.
• How non marketing resources within a firm can affect
its marketing

3. ENVIRONMENTAL MONITORING
The process of gathering information regarding
company’s external environment, analyzing it
and forecasting the impact of whatever trends
the analysis suggests.

4. Macro influences
• Affect all the firms
• Demographics
• Economic conditions
• Competition
• Social and Cultural
• Political and Legal
• Technology
• Micro Influences
• So called because they
affect particular firm.
• Suppliers
• Marketing Intermediaries
• Customers.
Demographics
Refers to the characteristics of the population.
External Environment Forces

5. Economic conditions
People alone cannot make a market. They must
have money
to spend and willingness to spend.
Economic environment is a significant force that
affects the
marketing activities of just about any organization.
1. Stages of the Business Cycle:
Prosperity: is a period of economic growth.
Organizations expand their marketing programs,
add new products and enter
new markets.

6. Points to be considered by the
marketers are
• Population distribution
• Marked difference in the particular age group
than others
• Eating habits, dressing, lifestyle, other habits
etc.
• Culture, habits and preferences
• Marketing activities are designed to meet
the needs of these markets.

7. • Recession: is a period of retrenchment for
consumers and businesses. Organizations
tighten their economic belts.
• People can become discouraged, scared and
angry. This will
• affect their buying behavior.
• Recovery: is the period when economy is
moving from recession to prosperity.
Unemployment decrease and disposable
income increase. Companies expand their
marketing programs.

8. • Inflation: A rise in the prices of goods and services
represents
• inflation. Consumer buying power declines. Inflation
affects consumer psychology and marketing
programs.
• Periods declining prices is called deflation some times
termed as disinflation, where firms cannot increase the
prices due to
• consumer resistance.
• Interest Rates: Factor that influences marketing
programs. When interest rates are high consumers
donot make long term purchases such as housing

9. Competition
Three types of competitions:
• Brand competition:
Comes from marketers of directly similar products.
•Substitute products:
Satisfy same needs. Eg. Wood lamination instead of
carpeting.
•Every company is rival:
For same consumer limited buying power.
Firms should strive to gain differential advantage than
the competition instead of differential disadvantage.
Differential advantage attracts customers where as
differential disadvantage drives them away.

10. • Social and Cultural Forces
• Life styles, values and beliefs are changing much more quickly than
they used.
• Greening of America: Quality is being emphasized rather than the
quantity. “Not more but better”. Environmental consciousness is
increasing.
• Soya bean in crayons rather than paraffin wax.
• Recyclable containers usage is increasing.
• Environmentally friendly products market is growing
• steadily
• People in favor environmentally friendly products donot buy
• them

11. • Changing Gender Roles:
• Women in work force is increasing so as the number of two
income house holds. Jobs recreation and buying behavior is
increasing.
• Women are buying more athletic shoes than men
• women’s attitude towards career shopping and products
• continue to evolve.
• Frozen and prepared food market is growing.
• Trend of paste spices market is evolving our country.
• Changing gender role has affected men as they share the
• house work with women.

12. Premium of time:
• People are working longer time than their parents.
• Over loaded work due to down sizing.
• Continuing education, personal fitness and various
professional activities.
• Time short people have more income and less time and
need convenience.
• Product planning should consider to provide covenience
to these people.
Physical Fitness and Health:
• Participation in fitness activities
• Changing dietary habits
• Awareness of diseases is increasing and people becoming
health conscious

13. Political and Legal forces:
• Monetary and fiscal policies:
•Marketing efforts are affected the money supply and
tax legislation and govt. spending.
Social legislation and regulation:
• Legislation affecting environment
• Anti pollution law.
Government relationship with industries:
Subsidies, tax exemption on imports and exports.
Legislation related specifically to marketing:
There are two main types of legislation involved in
marketing
Primary legislation - Acts of Parliament or Statutes
Secondary legislation - Statutory Instruments (SIs,
which are often called Codes, Orders, Regulations,
Rules).

14. • Technology
• Impact on our life styles, consumption patterns and
our
• economic well being.
• Technological breakthroughs can affect marketing in
three
• ways.
• Starting entirely new industries
• Radically altering, destroying the existing industries.
• Stimulating markets and industries not related to new
• technology.

15. External Microenvironment
Three external Micro environmental forces:
• Firm’s suppliers
• Intermediaries
• Firm’s market
The Market: is really what marketing is all about - how
to reach it, serve it profitably and in a socially
responsible manner.
A market is people or organizations with needs to
satisfy, money to spend and the willingness to spend.
Three specific factors to consider:
• People organizations with needs
• Their purchasing power
• Their buying behavior

16. Suppliers: supply the goods or services required by the
manufacturer to produce. That is why suppliers play a
vital role. Organizations need to have good relationship
with the suppliers.
Marketing Intermediaries: Directly aid in flow of goods
services from marketing organization to market.
Middlemen
Transportation
Ware housing
Financing
Intermediaries operate between company and its market
and company and its suppliers - Channels of distribution
Marketing intermediaries can do a better job than the firm

17. Organization’s Internal environment:
•Internal forces controllable by the
management. Internal influences include
production, financial and personal activities.
•Non marketing forces are company’s location, its
Research and development strength and over all
image of the firm.
•Coordination between executives of different
departments is essential.