3. Intermediaries
• They are the middlemen who helps the companies to serve their customers more effectively.
• They create place utility, time utility and quantity utility
• Intermediaries and their impact on marketing decisions
– Resellers – helps in reaching consumers, provide market information, link between company and consumer, distribution strategies revolve
around resellers
– Market Research Firms – provides market information on the basis of which decision related to new segmentation, product developments,
branding , communication etc are taken
– Physical Distribution Firms – takes care of product assortments, bulk breaking and stock keeping, affects distribution strategy of the
organization
– Advertising Agencies – develops communication for the organization, affects communication strategy
Other Stakeholders
• Any group that has an actual or potential interest in the organization and /or affects organization’s ability to achieve its objectives
• Stakeholders includes
– Government Agencies
– Media
– Local Community
– Social Groups
– Financial Agencies
4. PEST ANALYSIS
• A form of business analysis examines the external environment and the global factors
that may affect a business
• The overall evaluation of Political, Economic, Social and Technological environment
• It provides a quick and visual representation of the external pressures facing a
business, and their possible constraints on strategy
• Normally, the marketing executive prepares a check-list of various factors present in
the Political, Economic, Social and Technological environment and access them to
understand various opportunities and threats present in the market place
5. PEST ANALYSIS
Political & Legal
• Environmental
regulations and
protection
• Tax policies
• International trade
regulations
• Contract
enforcement law
• Consumer
Protection
• Employment laws
• Government
Attitude
• Competition
Regulation
• Political stability
• Safety regulations
Economical
• Economic growth
• Interest rates &
monetary policies
• Government
spending
• Unemployment
policy
• Taxation
• Inflation rates
• Stage of the
business cycle
• Consumer
confidence
Social
• Income distribution
• Demographics,
population growth
rates
• Age distribution
• Labor / social
mobility
• Lifestyle changes
• Work / career and
leisure attitudes
• Entrepreneurial
spirit
• Education
• Fashion, hypes
• Living conditions
Technological
• Government
research spending
• Industry focus on
technological effort
• New inventories
and development
• Rate of technology
transfer
• Life cycle and
speed of
technological
obsolescence
• Energy use and
costs
• Changes in
Information
Technology
6. MICRO ENVIRONMENTAL FACTORS &
THEIR IMPACT ON MARKETING
DECISIONS
Micro Environment consist of factors that affect and are affected by the organization directly.
These forces are close to company and affects the activities of the organization and its ability to serve
the customers
Factors of
Micro
Environment
Customers
Suppliers
Competitors
Intermediaries
Other
Stakeholders
7. Consumers/ Customers
• Consist of target market towards whom company channelizes all its marketing efforts and compete
in the market place to serve their needs
• Consumer Markets can be of following types
– Consumer Market
– Business Markets
– Global Markets
– Non Profit Markets
• Impact on marketing decision
– All the marketing efforts are channelize towards them hence their choice and preference plays a very
important role in taking any marketing decision
– Entire marketing mix is developed keeping consumers in mind
– Any Marketing which is unable to reach consumer effectively must be eliminated immediately as the
resources consumed in such activates are wasted and can be consumed in other more effective marketing
efforts
8. • Suppliers
• One who supply the resources to a company for producing goods and delivering superior services to the
customers
• Suppliers are treated as partners and associates with organization to provide customer value
• Impact on marketing decision
• Any shortage of Supply affect the Marketing function
• An organization should not entirely relay on any one suppliers as it increases the bargaining power of the supplier and affects
the negotiation process
• Competitors
• Every market is served by more than one companies. Hence they compete with one another in the market place
to serve the needs of selected target market
• They are the alternative firms that could provide a product to satisfy a specific market’s need.
• Firms must gain strategic advantage by positioning their offerings against competitors’ offerings in such a way
that consumer appreciate and prefer your offering as compare to competitors’ offering
• Impact on marketing Decisions
– Marketing decisions must factor in competitors because how many competitors a company has and how good the competitors are in
serving the needs of the selected target market will affect your marketing plans
– Competition will affect organizations product, pricing, communication and distribution strategy even the potential competition can
affect the organizations selection of a market
9. PORTER’S FIVE FORCE ANALYSIS
• “An industry’s profit potential is largely determined by the intensity of competitive
rivalry within that industry.”
– Michael Porter
11. THREAT OF NEW ENTRANT
• The easier it is for new companies to enter the industry, the more cutthroat competition
there will be.
• Factors that can limit the threat of new entrants are:
• How loyal are the end users in this industry?
• How hard is it for the end users to switch and use another product?
• Does it require a large seed capital to enter this industry?
• Do entries to this industry regulated by government?
• How hard is it to gain access to the distribution channels?
• How long does it take for new staff to acquire the necessary skills to do the work?
12. THREAT OF SUBSTITUTE PRODUCTS
• Customers may consider switching to alternatives:
• Buyer propensity to substitute
• Relative price performance of substitute
• Buyer switching costs
• Perceived level of product differentiation
• Number of substitute products available in the market
• Ease of substitution
13. RIVALRY AMONG EXISTING PLAYERS
• For most industries, the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry.
• Sustainable competitive advantage through innovation
• Competition between online and offline companies
• Level of advertising expenses
• Powerful competitive strategy
• Competitive rivalry is likely to be based on dimensions such as
• Price, quality, and innovation
• Companies that are successful with introducing new technology, are able to charge higher
prices and achieve higher profits, until competitors imitate them.
14. BARGAINING POWER OF SUPPLIERS
• Suppliers of raw materials, components, labor, and services (such as expertise to the
firm can be a source of power over the firm, when there are few substitutes
• Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices for
unique resources
• Presence of substitute inputs
• Degree of differentiation of inputs
• Impact of inputs on cost or differentiation
• Supplier concentration to firm concentration ratio
15. BARGAINING POWER OF CUSTOMERS
(BUYERS)
• The bargaining power of customers is also described as the market of outputs: the
ability of customers to put the firm under pressure, which also affects the customer's
sensitivity to price changes.
• Buyer concentration to firm concentration ratio
• Buyer volume
• Buyer information availability
• Ability to backward integrate
• Availability of existing substitute products
16. SWOT ANALYSIS
– A technique of monitoring internal and external marketing environment
– The overall evaluation of companies Strengths, Weaknesses, Opportunities and Threats
– Internal Analysis helps a marketers to understand organizations strengths and Weakness
– External Analysis is used to understand various opportunities and threats present in the
market place
17. SWOT ANALYSIS
Opportunities and Threats
• Analyzing significant micro and macro environmental factors
• Opportunities is an area of buyer need and interest that a company has a high probability of profitably
satisfying
• Threats are challenges posed by an unfavorable trend or development that in the absence of any
marketing defense mechanism would lead to lower sales or profit
Strengths and Weaknesses
• Analyzing significant internal factors to identify the area of strengths and weaknesses of an organization
• Strengths are the capabilities that an organization has it can be leverage for exploring market
opportunities and avoid threats
• Weaknesses are the pain areas which particularly puts an organization at disadvantage to other firms
18. SWOT ANALYSIS
• New
Competitors
• New
Substitutes
• Economic
Slowdown
• Decline in
Product cycle
• Narrow R&D
• Internal
dispute
• Weak Sales
force
• Rapid Market
Growth
• Government
Deregulation
• Economic
Boom
• Brand Name
• Strong R & D
• Relations with
Business
Partners
• Rare Resource
STRENGTHS OPPORTUNITIES
THREATS
WEAKNESSES
