environmental analysis of industrial marketing

1. ENVIRONMENT ANALYSIS IN
BUSINESS MARKETING

2. THE MARKETING ENVIRONMENT
 The forces that directly and indirectly influence
an organization’s capability to undertake its
business.
 The trading 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.

3. COMPONENTS OF MARKETING
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.
• External environment
• Macro environment
• Micro environment

5. THE INTERNAL ENVIRONMENT
All factors that are internal to the organization are known
as the 'internal environment'. They are generally audited
by applying the 'Five Ms' which are Men, Money,
Machinery, Materials and Markets. The internal
environment is as important for managing change as the
external. As marketers we call the process of managing
internal change 'internal marketing.‘

6. THE INTERNAL ENVIRONMENT
It includes the following:
 The human resource department.
 The operations department.
 The accounting and finance department.
 The research and development department.
 Marketing and production

7. The company’s internal environment
Top management
Finance
R&D Purchasing
Manufacturing
AccountingMarketing
marketing
Human
resources

8. INTERNAL PROCESSES AND
PROCEDURES
•Allocation of responsibilities within the organization.
•Resources availability .
•The extent to which the major functional areas work
together supporting the marketing function to be
customer oriented .
•The culture of organization.
•The attitude of internal stakeholders.

9. External Environment
Analysis
 4 components
 Scanning – the study of all segments in the general
environment
 Monitoring – observing environmental changes to
see if an important trend is emerging
 Forecasting – the development of feasible
projections of what might happen and how quickly
as a result of the changes and trends detected
 Assessing – determining the timing and
significance of the effects of environmental
changes and trends on the firm
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10. External Environment Analysis
 Major part of external analysis is the
identification of opportunities and threats
 Opportunity
 Environment condition that, if exploited effectively,
helps a company achieve strategic competitiveness
 Threat
 Environment condition that may hinder a company's
efforts to achieve strategic competitiveness
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11.  The time horizon for environmental scanning
- strategic planning- short term, long term
 The responsibility for environmental analysis
- shared by corporate planning department
- senior line managers
- opinion from experts
 Sources of information and environmental factors
- Govt publications
- Trade journals
- Professional publications and the internet
- Other sources- sales rep, industrial customers,
dealers, distributors and trade associations

12. Micro environment
 The forces close to the company that affects its ability
to serve.
 It comprises all those organizations and individuals who
directly affect the activities of a company.
 All factors which impact directly on a firm and its
activities in relation to a particular market.
1. Customers.
2. Competitors – competitors strategies, objectives,
strength and weakness
Product mix, pricing distribution and so on.
3. Suppliers –interdependent relationship, commitment to
quality & service, other external factors.

13. Macro environment
Macro environment refers to those
factors which are external to company’s
activities and do not concern the
immediate environment.
It comprises general forces that affect all
business activities in market .

14. Macro environment
 Economic environment
 Demographic environment
 Natural environment
 Technological environment
 Government political and legal
 Cultural and social
 public

15. Economic environment
• The economic environment consists of factors that affect
consumers purchasing and spending power.
• Economic factors- business cycles, interest rates, currency rates,
fiscal policies, investment, industrial production and so on.
• Under economic environment manager generally studies
1.trends of gross national product
2.patterns of real growth in income
3.variations in geographical income distribution.
4.borrowing pattern ,trends and governmental and legal restrictions.
5.major economic variables

16. Demographic environment
 Demographic data helps in preparing
geographical marketing plans, household
marketing plans, age and sex wise plans.
 Changes in population can have an impact on
the demand for industrial goods and services
 Eg demand for steel

17. Natural Environment Trends
 Shortage of raw materials.
 Limited quantities of non-renewable resources.
 Increased pollution.
 Waste disposal, air/water pollutants.
 Increased government intervention.
 Kyoto and other initiatives.
 Environmentally sustainable strategies.
 G.R.E.E.N. movement.

18. Technological environment
 Rapid changes in technology are forcing
industrial firms to
- Recognize limit to their existing technologies
- Know which new technologies are emerging
- Decide when to incorporate new
technologies in their products

19. Political and Legal forces
 Includes laws, government agencies and pressure
groups that influence or limit various organizations
and individuals in a given society.
 Increasing legislation.
 Changing government agency enforcement.
 More emphasis on ethics and socially responsible actions.
 Environmental regulation act, MRTP act, industry and
factory act

20. Cultural environment
Define:
Institutions and other forces that affect society’s
basic values ,perceptions, preferences, and
behaviors.
Development
Persistence of cultural values
Shifts in secondary cultural values

21. Public
 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 actions of the company do affect the interest
of other groups i.e., those who form general public
for the company who must be satisfied along with
the consumers of the company.
 According to Kotler ‘companies must put their
primary energy into effectively managing their
relationships with their customers.

22. Strategies for managing
external environment
 Collecting information on customers and
competitors through marketing and field
sales person
 Analyzing trade and govt publication
 Carrying out marketing research
- Understand customer needs
- Monitor competitors actions
- Identify technological innovations
- Identify changes in govt, political factors

23. strategies
 Independent strategies
- Cut down the price
- Differentiate its products superiority
- Socially responsible
- To care of political or legal
 Cooperative strategies
- Industrial firm cooperates with other firms,
industries or group in the environment(FICCI)