Marketing environment

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MARKETING ENVIRONMENT MBA 1st semester. VTU MBA

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Marketing environment

  1. 1. Module 2MARKETING ENVIRONMENT Dr.S.G.Kulkarni 1
  2. 2. Marketing EnvironmentPhilip Kotler : “ A company marketing environment consists of the actors and forces that affect the company’s ability to develop and maintain successful transactions and relationships with its target customers.” Dr.S.G.Kulkarni 2
  3. 3. Marketing EnvironmentMicro environment Macro environmentControllable Partially UncontrollableCo Organization Suppliers DemographicManagement Customers EconomicResources Dealers EcologicalM Mix Competitors Technological Community Political ( Social groups) Sociological Dr.S.G.Kulkarni 3
  4. 4. Marketing Environment The inputs concerned with micro environment are – Company organization Suppliers customers Dr.S.G.Kulkarni 4
  5. 5. Marketing Environment The outputs concerned with macro environment are –► Political► Economical► TechnologicalMacro environment factors may be –Controllable or partially - controllable Dr.S.G.Kulkarni 5
  6. 6. Micro environmental factors Company : Company organization consists of Board of Directors and functional managers. Marketing plans are drawn up as per the philosophy of Top management Marketing decisions like new products, expansion, etc depend on the support of top management. It depends upon finance, managerial skills, organization’s strengths and weaknesses. Dr.S.G.Kulkarni 6
  7. 7. 1. Company - continued Marketing plans should be in harmony with policies of other departments such as production, purchase, finance, personnel, etc For ex: quality depends upon production policies Advertising and sales promotion – on budgets Dr.S.G.Kulkarni 7
  8. 8. 2. Suppliers• Supply raw materials, plant and equipments, human resources, technology• Their strategies affect ours• If they increase prices, we have to revise price structure Dr.S.G.Kulkarni 8
  9. 9. 2. Suppliers - continued• Decisions like ‘ make or buy’ depend upon suppliers• Depends upon – Right supplier – Right place – Right time and lead time – Right price – Right quantity – Right quality Dr.S.G.Kulkarni 9
  10. 10. 2. Suppliers -continued Good relations are required for successful marketing Dr.S.G.Kulkarni 10
  11. 11. 3. Intermediaries Wholesalers, retailers, agents, transporters, warehousers, ad agencies, etc. This is a choice of channel of distribution Dr.S.G.Kulkarni 11
  12. 12. 4. Customers Purchase requirements vary from customer to customer Individual customers are influenced by cultural, social and psychological factors They are large in number, scattered, poorly informed, buy in small quantities and frequently and are guided by personal considerations Dr.S.G.Kulkarni 12
  13. 13. 4. Customers Industrial producers are limited in number, geographically concentrated, buy in large in bulk, demand is derived, buy on reciprocal basis, depend on lease hold. Dealers buy for resale. Government buys for public welfare, defence Dr.S.G.Kulkarni 13
  14. 14. 5. Competitors Supply similar products or substitute products Competitors adopt different actions for getting greater share of markets All firms compete with each other for consumers buying power. Dr.S.G.Kulkarni 14
  15. 15. 6. Public Financial public: financial institutions, investment houses, insurance co, Government public: Citizen action public: consumer organizations, environmental groups, minority groups, etc General public: public image Internal public: employees, Board, labour unions, press and media Dr.S.G.Kulkarni 15
  16. 16. Macro environment 1. Economic Economic forces influence both marketers and the consumersEconomic forces include – Competition – monopoly, oligopoly Buying power Willingness to spend Dr.S.G.Kulkarni 16
  17. 17. Macro environment 1. Economic - continuedEconomic conditions include Economic development National income Standard of living State of agriculture Dr.S.G.Kulkarni 17
  18. 18. Macro environment1. Economic - continued Business cycles Interest rate Price levels Fiscal policies marketers have to take into consideration the changes taking place in agriculture and industry Dr.S.G.Kulkarni 18
  19. 19. 2. Demography Demography gives ‘consumer profile’ It is the study of population in respect of its size, density, location, age, race, occupation, marital status, education, sex composition etc All these factors influence marketing decisions Dr.S.G.Kulkarni 19
  20. 20. Acronyms used in respect of age SKIPPIES MOBY’s DINKS PUPPIES WOOFS Dr.S.G.Kulkarni 20
  21. 21. 2.Demography - continued School Kids with Income and Purchasing Power Mother Older, Baby Younger Double Income, No Kids Poor Urban Population Well Off Older Folks Dr.S.G.Kulkarni 21
  22. 22. 2.Demography - continued► Mexico is a nation of young population► Japan – ‘old generation’► America was a melting bowl. Now it is a ‘Salad bowl’ with Chinese, Filipinese, Japanese, Asians, Koreans► Ads – show women as decision makers due to increase in education Dr.S.G.Kulkarni 22
  23. 23. Demography - continuedEducation► Illiterates► High school drop outs► Matriculates► Graduates► Professional degrees► Post graduates Dr.S.G.Kulkarni 23
  24. 24. 2.Demography - continued Buying habits are determined by income, education, age, family composition and other demographic factors It helps in - Market segmentation, demand forecasting, determination of market potential Dr.S.G.Kulkarni 24
  25. 25. 2.Demography - continued India’s population is roughly 108 crores 75% of population lives in villages Rural marketing offers immense opportunities and challenges to a creative marketer Dr.S.G.Kulkarni 25
  26. 26. 2.Demography - continued You find that the demand is increasing not only for farm products, but also for non- farm products Dr.S.G.Kulkarni 26
  27. 27. Technology It has a definite impact on buyers and marketers decisions It provides mechanical, physical and numerous other processes which help in attaining higher standard of living It has adverse effects like pollution, unemployment, increase in crime rate, etc Marketers must be aware of new developments in technology. Dr.S.G.Kulkarni 27
  28. 28. Technology-continued Technological developments may put some people out of business and at the same time, open up new business opportunities to others For ex: introduction of synthetic fabrics drove away sheep raisers and cotton growers out of business Dr.S.G.Kulkarni 28
  29. 29.  Solar pocket calculators and hand cameras CDs and Video tapes Virtual reality applications in Marketing is a new application due to technological progress Dr.S.G.Kulkarni 29
  30. 30. Technology-continued Technological developments have improved the standard of living and given more leisure time Improvements in communication, transportation Technology has given wonder drugs like Ampicilliin, by- pass surgery, Dr.S.G.Kulkarni 30
  31. 31. Technology-continued Technology grows out of research made by business, universities Most of the products that we talk today were not there a few years back. For example, Computers, Photostat, laser technology, scanners. Dr.S.G.Kulkarni 31
  32. 32. 3. Natural factors and ecological factors - also These also affect the pattern of industries and marketing Industries create pollution of air, water and environment The package in the form of plastic bags and bottles create a lot of problems Some governments have banned the use of plastic bags. Dr.S.G.Kulkarni 32
  33. 33. Political factors Marketing is affected by monetary, fiscal, import and export policiesSome of the Acts applicable are as follows: Essential Commodities Act Prevention of Food Adulteration Act Trade and Merchandise marks Act Packaged Commodities Act Companies Act Dr.S.G.Kulkarni 33
  34. 34. Political factors - continued Political and legal factors are inter connected Discontinuation of – CCI, FERA, IDRA Introduction of SEBI, FEMA, VAT Rules allow private participation in transportation , telecom, airlines Dr.S.G.Kulkarni 34
  35. 35. Social-Cultural environment Advertisements and culture Some ads are banned on TVs Festivals like Ganesh festival, Diwali, Id- Milad, Christmas, Dress styles are different School uniforms Dr.S.G.Kulkarni 35
  36. 36. Cultural factors - continued• Food habits• Internet practice• Fast foods – Pizza hut, Ken Fried Chicken Dr.S.G.Kulkarni 36
  37. 37. Cultural factors - continued• There are several movements like trade union movement, consumer movement, womens lib, deprived classes movement , etc.• These have their own expectations from the market. If they are against their ideas, they boycott the products Dr.S.G.Kulkarni 37
  38. 38. Cultural factors - continued Cause related Marketing 1980 saw the advent of “ cause related marketing” The distinctive feature of case-related marketing is the firm’s contribution to a designated cause being linked to customers’ engaging in revenue-producing transactions with the firm Example: CRY, AWWA, WWF cards Dr.S.G.Kulkarni 38
  39. 39. Cultural factors - continued• Cultural and ethical forces are of vital importance Dr.S.G.Kulkarni 39
  40. 40. Responding to the marketing environment There are two general approaches to respond to marketing environmental forces, viz., Passive approach and Aggressive approach Dr.S.G.Kulkarni 40
  41. 41. 1) Passive or reactive approach Under this approach the marketing strategy is subject to micro environment with macro environment Environmental objectives of 2010 are set in 2000 and strategies are developed in 1998 and the organizational structure is established in 1995 Dr.S.G.Kulkarni 41
  42. 42. 1) Passive or reactive approach - continued• Stable environment is very rare. Turbulent environment is common• Marketing environment should be scanned systematically. These guide marketing opportunities• Marketing strategy normally follows passive approach that is coordinating micro environment with macro environment Dr.S.G.Kulkarni 42
  43. 43. 1) Passive or reactive approach - continued• India has opportunities for handcraft goods, ready made garments, fast food products, software development, call centres and those areas which are labour intensive Dr.S.G.Kulkarni 43
  44. 44. 2) Aggressive approach Marketing manager tries to influence environmental forces so as to create market opportunities. A firm can be able to influence the shape of legislation through lobbying A single organization cannot influence – population, economic condition Dr.S.G.Kulkarni 44
  45. 45. Dr.S.G.Kulkarni 45
  46. 46. Indian Marketing environment Prosperity in rural area Overflowing unaccounted money everywhere Inflationary condition [ inflation is a permanent guest] Aggressive advertising on TV inspiring children and women. Consumer is a ‘King’ Dr.S.G.Kulkarni 46
  47. 47. Indian Marketing environment - continued Middle class explosion - ‘Consumption community’ Better educated and exposed to the life styles of the rich Their aspirations have been constantly growing. They often spend more than what they earn Dr.S.G.Kulkarni 47
  48. 48. Middle class explosion Their expenditure on non-food items is continuously Our market is on par with UK, France, West Germany More disposable income Spend more on non food items Invest in stock market Dr.S.G.Kulkarni 48

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