MARKETING ENVIRONMENTSlides Prepared and Presented by GURU RAJ
Some Important Terms Related to Company aswell as to Marketing Environment:Market Segment:A group of consumers who respond in a similar way to a given set of marketing efforts.Market Segmentation:Dividing a market in to distinct group of buyers who have different needs, characteristicsor behaviors and who might require separate products or marketing programs.Target Market:A set of buyers sharing common needs or characteristics that the company decides toserve.Market Targeting:The process of evaluating each market segments attractiveness and selecting one or moresegments to enterPositioning:Arranging for a product to occupy a clear, distinctive and desirable place relative tocompeting products in the minds of target consumers.
Business Portfolio:The Collection of the business and Products that make up the company.Portfolio Analysis:The process by which management evaluates the products and business that makeup the company.Market Penetration:A strategy for company growth by increasing sales of current product to currentmarket segment without changing product.
Market Development :A strategy for company growth by identifying and new market segments for currentcompany products.Product Development :A strategy for company growth for offering modified or new products to current marketsegment.Diversification:A strategy for company growth starting up or acquiring business outside the company’scurrent products and markets.Downsizing:Reducing the business portfolio by eliminating products of business units that are notprofitable or no longer fit the companies overall strategy.
Marketing Environment Marketing Environment refers to processes and factors which have decisive influence on marketing objectives and policies of the firm. The actors and forces outside the marketing that affects marketing management’s ability to build and maintain successful profitable relationships with target customers.
Marketing Environment Micro Environment Macro Environment Controllable factors: Uncontrollable Company Management, Factors: Resources, Marketing Mix. Demographic Partially Controllable Forces: Suppliers Economic Customers Natural Public Technological Competitors Political Marketing Intermediaries Community or Social Groups Cultural
Marketing Environment Micro Environment Macro Environment The actors close to the The Larger Societal Forces company that affects its that affect Micro ability to serve its environment- customers-the company, Demographic, Economic suppliers, Customers, Natural, Technological Public, Competitors, Political, Cultural Forces. Marketing Intermediaries, Community or Social Groups.
Micro EnvironmentThe Company:Top management sets the companys mission,objectives.Designing Marketing Plans.Integrated activity with other departments like: finance,human resource, research and development.“Think customer” philosophy.
Micro EnvironmentSuppliers:Provide resources needed by the company to produce its goods andservices.Supplier problems can seriously affect the marketing .Marketing managers must watch supply availability and costs.Supply shortages or delays, labor strikes, and others events can sales inthe short run and damage customer satisfaction in long run.Rising supply costs may force price increases that can harm company’ssales volume.
Micro EnvironmentMarketing Intermediaries:Firms that help the company to promote, sell anddistribute its goods to final buyers.Resellers: are the distribution channels firms that helpthe company find customers or make sales to them. Ex:Financial Intermediaries:Include banks , credit companies, insurance companies and other businesses that helpfinancial transaction or insure against the risk associated with the buying and selling ofgoods .
Micro EnvironmentCompetitors:Customer satisfaction plays the key role.Publics or Community or Social Groups.Any groups that has an actual or potential interest in orimpact on an organization’s ability to achieve itsobjectives.There are different types of publics:
Micro EnvironmentFinancial Publics:this group influence s the company’s ability to obtain funds, Banks , investmenthouses, stockholders are the major financial publics.Media Publics:this group carries news features and editorial opinion, it includes news papers, magazines andradio and television stations.Ex: THE TIMES OF INDIA, THE WEEK, etc
Micro EnvironmentGovernment Publics:Management must take government developments in to account. Marketer must oftenconsult the company’s lawyers on issues of product safety, truth in advertising and othermatters.Amir Khan – Brand ambassador of Ministry of Tourism & Hospitality promoting thecampaign of Indian tourism industry with the add“ ATHITHI DEVO BHAVA”Citizen-action Publics: A company’s marketing decisions may be questioned by consumerorganizations , environmental groups , minority groups, and others. Its PRD ( PublicRelations Department) can help it stay in touch with consumer and citizen groups.Transfer of Tata Nano plant from singoor to Gujarat due to protest of the acquisition of theland by farmers.Local Publics: neighborhood residents and community organizations.Ex: Brahmin Associations.General Public: observing the process of the buying plays key role.Internal Publics: Company employees.
Micro EnvironmentCustomers:based on the type of the markets i.e.FMCG Market or Consumer MarketBusiness or Industrial Market sReseller Markets: retailer, wholesaler, dealer etc .Government MarketsInternational Markets.
Macro EnvironmentDemographic EnvironmentDemography:The study of human populations in terms of Size,location, age, gender, race, occupation and otherstatistics.Increasing PopulationA growing Middle Class: in IndiaGrowth in the rural populationChanging Family SystemThe Changing the role of the womenA Better Educated, More White collared,More professional population.
Macro EnvironmentA growing Middle Class in INDIA: According to Mckinsey Global Institute (MGI) has divided the Indian population in to Five Economic Classes on the basis of their real annual disposable income. Economic Classes Annual Income Profile Source: The Bird of Gold- The Rise of Indian Consumer Market by MGI
Macro EnvironmentThe growth of the Indian Rural Population: The MGI India Consumer model has forecasted that population of rural India will be 906 Million by 2015 The demand for rural India is expected to grow at 5.1 % during the next 15 years. By 2025 rural consumption will nearly triple creating a market over Rs 26 trillion. Today the main constraints of marketers in rural market are: Proper Infrastructure such as road, telecommunication connectivity, and reliable supply of electricity which affect distribution infrastructure such as cold storages. Changing Family System Coming out from JFS: Joint Family System. Adopting NFS and DISK Culture : Nuclear Family System: Father, Mother and Children. DISK: Dual Income( Both father and Mother) and Single Kid culture is more popularized in India.
Macro EnvironmentChanging the role of WOMEN in India: Minimum qualification is graduation or even post graduation. Women= Men Philosophy, 33% Reservation by Government of India Gender Discrimination is the past thing. Many women head organizations and have men reporting to them Ex: Indira Nooyi Kiran Bedi CEO Pepsi Co.Ltd First Indian Women IPS officer Shikha Sharma Aishwarya Rai CEO Axis Bank.Ltd Miss World & Brand Ambassador to Many MNCs Chanda Kochar CEO ICICI Bank Ltd
Changing the role of WOMEN in India: Macro Environment
Macro EnvironmentA better Educated more White Collared, More Professional Population :Indian Population is becoming better educated.The rising number of educated people will increase in the demand for quality products, books,magazines, travel, personal computers & Internet services.There are near 220 MBA Colleges in Karnataka state which are recognized by UGC &NAAC(National Assessment Accreditation Council, New Delhi.) AICTE( All India Councilfor Technical Education) AIMA ( All India Management Association) and Approved byMinistry of HRD (Human Resource Development) Government of INDIA.Source: MBA-PGCET 2010 List of Approved Institutions released by Government ofKarnataka .
Macro EnvironmentEconomic EnvironmentDemand Determinants:High rate of economic growth creates more employment, national income ofindividuals and institutions improves standards of living .Demand is determined by the level of income of the people their spending habits ,earnings gives purchasing capacity to people.Engles law:“ as the income rises the % of income spent on food declines andnon food items increases” Items % of spending Food & Beverages 58.8 Clothing and Footwear 11.4 Rent, Fuel and Power 10.6 Others 19.2 Business Standard Review s:Average Indian spending capacity
Macro EnvironmentOther Economic Factors like:InflationBusiness cycleAgricultureIndustrial ScenarioPlays Very Important role in making the marketing strategieslike:NPDMRSCMIMC.
Macro EnvironmentNatural Environment: Natural Resources that are needed as inputs by marketers or that are affected by Marketing Activities. Marketer s should be aware of several trends in the marketing environment, which involves: Shortages of Raw Materials, which may leads to increase the production cost. Increased Population. Increased Governments Intervention on NRM i.e. Natural Resource Management.
Macro EnvironmentEnvironmental Sustainability: Developing strategies and practices that create a world economy that the planet can support indefinitely. General Electric using its “ecomagination” to create products for a better world – cleaner air craft engines, cleaner locomotives, cleaner fuel technologies. In 2005 GE launched its Evolution series locomotives , Diesel Engines that cut fuel consumption by 5% and emissions by 40% compared to locomotives built just in a year earlier. HP( Hewlett- Packard) pushing legislation to force recycling of old TV’s, Computers and other Electronic Materials
Macro EnvironmentTechnological Environment Technology - Changing Peoples Destiny. Forces that create new technologies , creating New Product( NPD) and Market opportunities. The growth of RFID(Radio Frequency Identification) transmitters or Smart Chips that can be embedded in the products we buy. Beyond benefits to consumers the RFID chips also give producers and retailers an amazing new way to track their products electronically-any where in the world any time automatically from factories to warehouses , to recycling centers. One study has found that by using RFID, Improves its inventory accuracy by 13% Saving and millions and millions of dollars. Marketing through Social Networking:
Macro EnvironmentPolitical EnvironmentLaws government agencies and pressure groups that influence and limit variousorganizations and individuals given society.On May 1998 India conducted Second Nuclear Bomb Test @ Pokhran, the event whichwill give far reaching our national and international marketing scenario.Swadeshi Jagaran Manch has been formed to boycott products of MNCs in India andencourage 100% Indian goods.
Influence of Politics on Marketing Macro Environment
Macro EnvironmentLegal EnvironmentThe central and state government have enacted a number of laws to regulated businessand commercial activities in the country. The marketing managers have to ensure thatall policies are within the statutory framework. Important statues are:The Indian Sales of Goods Act 1930.Indian Contract Act 1892.Patent Act 1970.The Essential Commodities Act 1951.Trademarks And Merchandise Act.Consumer Protection Act 1986.Standard Weights and Measures Act Etc
Macro EnvironmentThe Legal Environment Objectives:Protecting the consumers from unfair practices.Protecting companies from unfair competition.Protecting social interest and to secure smooth business atmosphere
Legal Environment and Marketing Macro Environment
Macro EnvironmentCultural EnvironmentInstitutions and other forces that affect societys basic values , perceptions,preferences and behaviors.Elements of Cultural Environment:Religion and CasteLanguageFestivalsCustomsFood Habits
Macro Environment28 States1618 Languages6400 Castes6 Religions29 Major Festivals & 1 Country
Marketing Assignments EnvironmentDefine the Following:Marketing EnvironmentMicro EnvironmentMacro EnvironmentWhat are the Controllable Uncontrollable & Partially Controllable factors.Explain SWOT analysis choosing your own company.Mc Donald has opened its restaurant and Bangalore explain different components ofMicro Environment affecting Mc Donald.Adlabs is planning to set up chain multiplexers in tier II Cities.Explain micro environmental factors will affect his new venture.