Introduction to Marketing

1. Introduction to MarketingIntroduction to Marketing
Presentation andPresentation and
DiscussionDiscussion
11

2. IntroductionIntroduction
Marketing is simple, yet complex.Marketing is simple, yet complex.
We are all involved in marketingWe are all involved in marketing
and: “the enigma of marketing isand: “the enigma of marketing is
that it is one of man’s oldestthat it is one of man’s oldest
activities and yet it is regardedactivities and yet it is regarded
as the most recent of theas the most recent of the
business disciplines (Baker,business disciplines (Baker,
1976).1976).
22

3. Introduction contd.Introduction contd.
Marketing came into existence with the firstMarketing came into existence with the first
barter exchange (e.g. the barter trade inbarter exchange (e.g. the barter trade in
ancient Egypt, Songhai and Ghana empiresancient Egypt, Songhai and Ghana empires
in Africa etc.) when someone realized thatin Africa etc.) when someone realized that
exchanges add value for both parties.exchanges add value for both parties.
This was the first real step forward inThis was the first real step forward in
economic development.economic development.
Marketing has evolved (like other practicesMarketing has evolved (like other practices
such as architecture, medicine, engineering)such as architecture, medicine, engineering)
over the centuries to where it is todayover the centuries to where it is today
(Michael Baker).(Michael Baker).
33

4. Introduction contd.Introduction contd.
According to Peter Drucker, the firstAccording to Peter Drucker, the first
test of any business is not thetest of any business is not the
maximization of profit but themaximization of profit but the
achievement of sufficient profit toachievement of sufficient profit to
cover the risks of economic activitycover the risks of economic activity
and thus avoid loss.and thus avoid loss.
Customers are the foundation of aCustomers are the foundation of a
business and their purpose ofbusiness and their purpose of
existence.existence.
In other words, customers are theIn other words, customers are the
mainstay of the business.mainstay of the business.
44

5. Introduction contd.Introduction contd.
As Peter Drucker puts it: There is onlyAs Peter Drucker puts it: There is only
one valid definition of businessone valid definition of business
purpose:purpose: to create a customer.to create a customer.
It is the customer who determinesIt is the customer who determines
what business is…what business is…
What the business thinks it producesWhat the business thinks it produces
is not of first importance, especiallyis not of first importance, especially
not to the future of the business andnot to the future of the business and
to its success in the market place.to its success in the market place.
The customer determines what aThe customer determines what a
business is, what it produces andbusiness is, what it produces and
whether it will prosper (Drucker).whether it will prosper (Drucker).
55

6. What is Marketing?What is Marketing?
It is the most interesting,It is the most interesting,
dynamic, versatile of alldynamic, versatile of all
academic disciplines.academic disciplines.
It is both theoretical andIt is both theoretical and
practical in nature.practical in nature.
It yields real results in the formIt yields real results in the form
of profits and/or satisfaction ofof profits and/or satisfaction of
business aims/objectives.business aims/objectives.
66

7. What is Marketing? contd.What is Marketing? contd.
It is a multidisciplinary (economics,It is a multidisciplinary (economics,
psychology, sociology, history, statistics…)psychology, sociology, history, statistics…)
management process of identifying andmanagement process of identifying and
satisfying consumer and organizationalsatisfying consumer and organizational
needs profitably.needs profitably.
The aim of marketing is to make profitThe aim of marketing is to make profit
and/or satisfy business objectives.and/or satisfy business objectives.
Thus, overall, it enhances human andThus, overall, it enhances human and
national economic development/progress.national economic development/progress.
Compare (a) Advanced countries andCompare (a) Advanced countries and
underdeveloped countries? And (b) aunderdeveloped countries? And (b) a
profitable business and a less profitableprofitable business and a less profitable
business?business?
77

8. DefinitionDefinition
Marketing is the process of planningMarketing is the process of planning
and executing the conception, pricing,and executing the conception, pricing,
promotion, and distribution of ideas,promotion, and distribution of ideas,
goods, and services to creategoods, and services to create
exchanges that satisfy individual andexchanges that satisfy individual and
organizational goals.organizational goals.
Source: The American MarketingSource: The American Marketing
Association(AMA)(see ww.ama.org).Association(AMA)(see ww.ama.org).
88

9. DefinitionDefinition
Marketing is the managementMarketing is the management
process responsible forprocess responsible for
identifying, anticipating, andidentifying, anticipating, and
satisfying customersatisfying customer
requirements profitably.requirements profitably.
Source: The Chartered InstituteSource: The Chartered Institute
of Marketing (CIM) (UK) (seeof Marketing (CIM) (UK) (see
www.cim.co.uk)www.cim.co.uk)
99

10. Recent formal Definition ofRecent formal Definition of
MarketingMarketing
Marketing is an organizationalMarketing is an organizational
function and a set of processes forfunction and a set of processes for
creating, communicating, andcreating, communicating, and
delivering value to customers and fordelivering value to customers and for
managing customer relationships inmanaging customer relationships in
ways that benefit the organizationways that benefit the organization
and its stakeholders.and its stakeholders.
Source: American Marketing Association,Source: American Marketing Association,
20042004
1010

11. Needs, Wants & DemandsNeeds, Wants & Demands
Needs constitute the basicNeeds constitute the basic
requirements for the existence of life,requirements for the existence of life,
such as food, clothing, shelter andsuch as food, clothing, shelter and
belongingness.belongingness.
A want, on the other hand, arises whenA want, on the other hand, arises when
the basic needs are satisfied…e.g. anthe basic needs are satisfied…e.g. an
American needs food but may want aAmerican needs food but may want a
hamburger, French fries & a soft drink.hamburger, French fries & a soft drink.
Demands are wants for specific productDemands are wants for specific product
backed by an ability to pay.backed by an ability to pay.
1111

12. Needs, Wants & Demands(Contd.)Needs, Wants & Demands(Contd.)
Demands are wants for specific productDemands are wants for specific product
backed by an ability to pay……e.g. manybacked by an ability to pay……e.g. many
people want a marcedes; only a few arepeople want a marcedes; only a few are
willing and able to buy onewilling and able to buy one
1212

13. Needs, Wants & Demands(contd.)Needs, Wants & Demands(contd.)
It is important for a marketer toIt is important for a marketer to
understand whether his product falls inunderstand whether his product falls in
the needs category or in the wantsthe needs category or in the wants
category and devise his marketingcategory and devise his marketing
strategies accordingly.strategies accordingly.
The ultimate aim of marketer should beThe ultimate aim of marketer should be
to motivate customers to consider theirto motivate customers to consider their
products in the needs category.products in the needs category.
1313

14. DesireDesire
Desire is the human appetite for a givenDesire is the human appetite for a given
object of attention. Desire for a productobject of attention. Desire for a product
is stimulated by advertising, whichis stimulated by advertising, which
attempts to give buyers a sense of lackattempts to give buyers a sense of lack
or wanting……e.g. in store retailing,or wanting……e.g. in store retailing,
merchants attempt to increase the desiremerchants attempt to increase the desire
of the buyer by showcasing the productof the buyer by showcasing the product
attractively, in the case of clothes orattractively, in the case of clothes or
jewellery, or, for food stores, by offeringjewellery, or, for food stores, by offering
samples.samples.
1414

15. BenefitsBenefits
Desirable attribute of a good or service,Desirable attribute of a good or service,
which a customer perceives he or shewhich a customer perceives he or she
will get from purchasing.will get from purchasing.
Whereas vendors sell features ("highWhereas vendors sell features ("high
speed drill bit with tungsten-carbidespeed drill bit with tungsten-carbide
tip"), buyers seek the benefit (thetip"), buyers seek the benefit (the
holes).holes).
1515

16. ValueValue
The extent to which a good or serviceThe extent to which a good or service
is perceived by its customer to meetis perceived by its customer to meet
his or her needs or wants, measuredhis or her needs or wants, measured
by customer's willingness to pay for it.by customer's willingness to pay for it.
It commonly depends more on theIt commonly depends more on the
customer's perception of the worth ofcustomer's perception of the worth of
the product than on its intrinsic value.the product than on its intrinsic value.
1616

17. ExchangeExchange
Exchange, the core concept ofExchange, the core concept of
marketing, is the process of obtaining amarketing, is the process of obtaining a
desired product from someone bydesired product from someone by
offering something in return. Foroffering something in return. For
exchange potential to exist, fiveexchange potential to exist, five
conditions must be satisfied:conditions must be satisfied:
 There are at least two parties.There are at least two parties.
 Each party has something that might beEach party has something that might be
of value to the other party.of value to the other party.
 Each party is capable of communicationEach party is capable of communication
and delivery.and delivery. 1717

18. Exchange(Contd.)Exchange(Contd.)
 Each party is free to accept or rejectEach party is free to accept or reject
the exchange offer.the exchange offer.
 Each party believes it is appropriateEach party believes it is appropriate
or desirable to deal with the otheror desirable to deal with the other
party.party.
1818

19. Role of MarketingRole of Marketing
Organizational ResourcesOrganizational Resources
Effective match SpecificationEffective match Specification
ofof
Target MarketTarget Market
Customer SatisfactionCustomer Satisfaction
OrganizationalOrganizational
Aims/objectivesAims/objectives
1919

20. The Marketing ConceptThe Marketing Concept
The Marketing Concept statesThe Marketing Concept states
that if a business or organizationthat if a business or organization
is to achieve profitability, theis to achieve profitability, the
entire organization must beentire organization must be
oriented towards satisfyingoriented towards satisfying
consumer needs, wants andconsumer needs, wants and
aspirations.aspirations.
2020

21. The Marketing Concept contd.The Marketing Concept contd.
In other words, The MarketingIn other words, The Marketing
Concept holds that the key toConcept holds that the key to
success is through determiningsuccess is through determining
the needs/wants/aspirations ofthe needs/wants/aspirations of
target markets and deliveringtarget markets and delivering
these more effectively andthese more effectively and
efficiently than competitors.efficiently than competitors.
2121

22. The Marketing Concept (key issues)The Marketing Concept (key issues)
Organizations must concentrateOrganizations must concentrate
on the customer and not theon the customer and not the
product or the company.product or the company.
Organizations should revolveOrganizations should revolve
round the customer and not theround the customer and not the
other way around.other way around.
The purpose of a business is toThe purpose of a business is to
create and keep a customercreate and keep a customer
(Theodore Levitt).(Theodore Levitt).
2222

23. Elements of the Marketing ConceptElements of the Marketing Concept
Consumer/customer OrientationConsumer/customer Orientation
Total Organization effortTotal Organization effort
Profitability/achievement ofProfitability/achievement of
objectives.objectives.
2323

24. Criticisms of the Marketing ConceptCriticisms of the Marketing Concept
Do customers really know theirDo customers really know their
needs/wants/aspirations?needs/wants/aspirations?
The choice of either consumer orThe choice of either consumer or
competitive orientation.competitive orientation.
Adapting to changeAdapting to change
(rigidity,inflexibility of the concept).(rigidity,inflexibility of the concept).
Conflict with social responsibility.Conflict with social responsibility.
Limits in the applicability of theLimits in the applicability of the
concept (e.g. the arts, ideology suchconcept (e.g. the arts, ideology such
as political parties, environmentalistsas political parties, environmentalists
– greenpeace, religions –– greenpeace, religions –
churches/synagogues etc……churches/synagogues etc……
2424

25. Some Criticisms of MarketingSome Criticisms of Marketing
Too many advertisements areToo many advertisements are
annoying, misleading, or both.annoying, misleading, or both.
There are too many unnecessaryThere are too many unnecessary
products.products.
Middlemen raise prices but don’t addMiddlemen raise prices but don’t add
value.value.
Marketing makes people materialistic.Marketing makes people materialistic.
Most of the criticisms result fromMost of the criticisms result from
misunderstandings about marketingmisunderstandings about marketing
(Perreault & McCarthy, 1999).(Perreault & McCarthy, 1999).
2525

26. Do you know your market?Do you know your market?
What is the product or service beingWhat is the product or service being
offered?offered?
What are the market trends in the industry?What are the market trends in the industry?
What is the market?What is the market?
Who are your customers? And what are theyWho are your customers? And what are they
looking for?looking for?
Who are your competitors? And how do theyWho are your competitors? And how do they
operate/react/behave?operate/react/behave?
Why do (should) your customers buy yourWhy do (should) your customers buy your
product/service rather than that of yourproduct/service rather than that of your
competitors?competitors?
2626

27. What is a Market ?What is a Market ?
According to Kotler (2004), “a marketAccording to Kotler (2004), “a market
consist of all the potential customersconsist of all the potential customers
sharing a particular need or want whosharing a particular need or want who
might be willing and able (i.e.,might be willing and able (i.e.,
propensity to) to engage in exchangepropensity to) to engage in exchange
to satisfy that need or want”.to satisfy that need or want”.
Source: Kotler, P. (2004), MarketingSource: Kotler, P. (2004), Marketing
Management, Prentice-Hall, Englewood Cliff,Management, Prentice-Hall, Englewood Cliff,
NJ.NJ.
2727

28. Market TypesMarket Types
Consumer Markets.Consumer Markets.
Industrial/Business to BusinessIndustrial/Business to Business
Markets.Markets.
Reseller (Retailers, Distributors)Reseller (Retailers, Distributors)
Markets.Markets.
Publics (GovernmentPublics (Government
agencies/departments/institutioagencies/departments/institutio
ns).ns).
International/global Markets.International/global Markets.
2828

29. What is Market(ing) Orientation?What is Market(ing) Orientation?
The process of applying the marketingThe process of applying the marketing
concept in the market place.concept in the market place.
Maintaining a customer orientation.Maintaining a customer orientation.
All departments work together guidedAll departments work together guided
by customerby customer
needs/wants/aspirations.needs/wants/aspirations.
Focus on profits/objectives.Focus on profits/objectives.
Source: Kohli and Jaworski (1990); Narver and Slater (1990).Source: Kohli and Jaworski (1990); Narver and Slater (1990).
2929

30. Market OrientationMarket Orientation
Production OrientationProduction Orientation
--1850s -> 1930s--1850s -> 1930s
Sales OrientationSales Orientation
-- 1930s -> 1950s-- 1930s -> 1950s
Marketing OrientationMarketing Orientation
-- 1960s -> ??-- 1960s -> ??
Consumer Relationship MarketingConsumer Relationship Marketing
(CRM)(CRM)
-- 1990s -> ??-- 1990s -> ??
3030
Time

31. Production OrientationProduction Orientation
Focus on the means ofFocus on the means of
production, and assumesproduction, and assumes
customers will want thecustomers will want the
product/service.product/service.
3131

32. Product Orientation (Contd.)Product Orientation (Contd.)
Focus on the technicalFocus on the technical
perfection of theperfection of the
product/service seenproduct/service seen
through the producer’sthrough the producer’s
(firm) eyes. Assumes(firm) eyes. Assumes
customers will perceivecustomers will perceive
product/service in theproduct/service in the
same way and thus buy.same way and thus buy.
3232

33. Selling OrientationSelling Orientation
Focus on persuadingFocus on persuading
((usually aggressiveusually aggressive) customers) customers
to buy products which doto buy products which do
not usually match theirnot usually match their
requirements. This isrequirements. This is
unlikely to lead to repeatunlikely to lead to repeat
buy/business.buy/business.
3333

34. Customer OrientationCustomer Orientation
Focus on discoveringFocus on discovering
customer needs (customer needs (basicbasic
survey/question & answer typesurvey/question & answer type))
and satisfying them. Thisand satisfying them. This
is unlikely to make bestis unlikely to make best
uses of production anduses of production and
other organizationalother organizational
resources.resources.
3434

35. Marketing OrientationMarketing Orientation
Focus on the identification ofFocus on the identification of
customers needs, organizationalcustomers needs, organizational
resources and objectives.resources and objectives.
Achieve effective match throughAchieve effective match through
market segmentation, targeting,market segmentation, targeting,
positioning and resourcepositioning and resource
development.development.
3535

36. So how do you define Market(ing)So how do you define Market(ing)
Orientation?Orientation?
Market orientation is theMarket orientation is the
organization-wide generation oforganization-wide generation of
market intelligence pertaining tomarket intelligence pertaining to
current and future customercurrent and future customer
needs, dissemination of theneeds, dissemination of the
intelligence across departments,intelligence across departments,
and organization-wideand organization-wide
responsiveness to it (Kohli andresponsiveness to it (Kohli and
Jaworski, 1990).Jaworski, 1990).
3636

37. Definition of Market OrientationDefinition of Market Orientation
contd.contd.
According to Narver and SlaterAccording to Narver and Slater
(1990), Market orientation(1990), Market orientation
comprises three components:comprises three components:
Customer orientationCustomer orientation
Competitor orientation andCompetitor orientation and
Interfunctional co-ordination.Interfunctional co-ordination.
3737

38. Measuring Market OrientationMeasuring Market Orientation
constructconstruct
Top ManagementTop Management
Interdepartmental DynamicsInterdepartmental Dynamics
Organizational SystemsOrganizational Systems
Market (customer) OrientationMarket (customer) Orientation
EmployeesEmployees
EnvironmentEnvironment
Business Performance.Business Performance.
Source: Kohli and Jaworski (1990)Source: Kohli and Jaworski (1990)
3838

39. Measuring Market OrientationMeasuring Market Orientation
construct contd.construct contd.
Customer OrientationCustomer Orientation
Customer commitmentCustomer commitment
activitiesactivities
Creation of customer valueCreation of customer value
Understanding customerUnderstanding customer
needsneeds
Measuring customerMeasuring customer
satisfactionsatisfaction
Offering after sales serviceOffering after sales service 3939

40. Measuring Market OrientationMeasuring Market Orientation
construct contd.construct contd.
Competitor OrientationCompetitor Orientation
Salespeople share competitorSalespeople share competitor
informationinformation
Responding rapidly toResponding rapidly to
competitors’ actionscompetitors’ actions
Top managers discussTop managers discuss
competitors’ strategiescompetitors’ strategies
Targeting opportunities forTargeting opportunities for
competitive advantagecompetitive advantage
4040

41. Measuring Market OrientationMeasuring Market Orientation
construct contd.construct contd.
Interfunctional CoordinationInterfunctional Coordination
Engaging in interfunctionalEngaging in interfunctional
customer callscustomer calls
Sharing information amongSharing information among
functionsfunctions
Integrating all functions inIntegrating all functions in
strategystrategy
Contribution of all functions toContribution of all functions to
customer valuecustomer value
Sharing resources with otherSharing resources with other
functions.functions.
Source: Narver and Slater (1990)Source: Narver and Slater (1990)
4141

42. Social Responsibility andSocial Responsibility and
Marketing EthicsMarketing Ethics
Social responsibility concerns aSocial responsibility concerns a
firm’s obligation to improve itsfirm’s obligation to improve its
positive effects on society andpositive effects on society and
reduce its negative effects.reduce its negative effects.
Marketing ethics are the moralMarketing ethics are the moral
standards that guide marketingstandards that guide marketing
decisions and actions.decisions and actions.
4242

43. Final comments on MarketFinal comments on Market
OrientationOrientation
An organization’s success in a dynamicAn organization’s success in a dynamic
business environment is morebusiness environment is more
dependent on adaptation to changingdependent on adaptation to changing
and evolving customer needs/wants.and evolving customer needs/wants.
Higher degree of market orientationHigher degree of market orientation
emanates from a changing and dynamicemanates from a changing and dynamic
market environment.market environment.
Lower degree of market orientation canLower degree of market orientation can
be evidenced in a market with a fixedbe evidenced in a market with a fixed
set of customers whose preferences areset of customers whose preferences are
stable. Here, few changes are expectedstable. Here, few changes are expected
in the marketing mix deliberation.in the marketing mix deliberation.
Kohli and Jaworski (1990)Kohli and Jaworski (1990)
4343

44. Marketing MyopiaMarketing Myopia
Myopia means short-sightedness.Myopia means short-sightedness.
Theodore Levitt, in his classic articleTheodore Levitt, in his classic article
”Marketing Myopia”, argues that”Marketing Myopia”, argues that
industries fail not because markets areindustries fail not because markets are
saturated but because of the failure andsaturated but because of the failure and
short-sightedness of the management….short-sightedness of the management….
e.g. the railroad industry did not flourishe.g. the railroad industry did not flourish
as it could have because the players inas it could have because the players in
the industry defined their businessthe industry defined their business
rather narrowly- as a railroad businessrather narrowly- as a railroad business
rather than transportation business.rather than transportation business. 4444

45. Selling Vs. MarketingSelling Vs. Marketing
MarketingMarketing andand salessales are both activitiesare both activities
aimed at increasing revenue. They are soaimed at increasing revenue. They are so
closely intertwined that people often don’tclosely intertwined that people often don’t
realize the difference between the two.realize the difference between the two.
Indeed, in small organizations, the sameIndeed, in small organizations, the same
people typically perform both sales andpeople typically perform both sales and
marketing tasks. Nevertheless, marketing ismarketing tasks. Nevertheless, marketing is
different from sales and as the organizationdifferent from sales and as the organization
grows, the roles and responsibilities becomegrows, the roles and responsibilities become
more specialized.more specialized.
4545

46. Selling Vs. Marketing(contd.)Selling Vs. Marketing(contd.)
Marketing Sales
Approach: Determine future needs and
has a strategy in place to
meet those needs for the long
term relationship.
Makes customer demand
match the products the
company currently offers.
Process: One to many Usually one to one
Focus: fulfill customer's wants and
needs thru products and/or
services the company can
offer.
fulfill sales volume objectives
Horizon: Longer term Short term
Scope: Identifying customer needs
(research), creating products
to meet those needs,
promotions to advertise said
products.
Once a product has been
created for a customer need,
persuade the customer to
purchase the product to fulfill
her needs
Strategy: Pull Push
Concept: Marketing is a wider concept Sales is a narrower concept
Priority: Marketing shows how to reach
to the Customers and build
long lasting relationship
Selling is the ultimate result
of marketing. 4646

47. Nature of Marketing:Nature of Marketing:
Nature of Marketing evolves from its
multidisciplinary coverage of activities which is as
follow:
1. Dynamic Process:
Marketing is an ongoing activity which does not
stop at any step. After finding customer’s needs
and wants it needs to develop such products or
services which can satisfy these needs and after
this there is need to advertising, promotion,
distribution, etc the process goes on.
2. Customer Oriented:
Marketing is customer oriented. Marketing is the
process of finding needs and wants of customers
and satisfying those needs profitably. 4747

48. 3.All Encompassing:
Marketing is all encompassing, it is not a
single process it includes production planning,
research, advertising, financial management,
budgeting, selling, etc.
4.Integrating:
It integrates all the departments of an
enterprise be it production, finance, IT, HR,
etc.
5.Creative:
Marketing is creative in nature, it looks out for
new ideas, views and activities and solves
problems or encash opportunities in a creative
way.
4848

49. Scope of Marketing:Scope of Marketing:
Marketing has a very wide scope it covers all the
activities from conception of ideas to realization of
profits. Some of them as discussed as below:
1. Product Planning:
It includes the activities of product research,
marketing research, market segmentation, product
development, determination of the attributes,
quantity and quality of the products.
2. Branding:
Branding of products is adopted by many reputed
enterprises to make their products popular among
their customer and for many other benefits.
Marketing manager has to take decision regarding
the branding policy, procedures and
implementation programs. 4949

50. 3. Packaging:
Packaging is to provide a container or
wrapper to the product for safety,
attraction and ease of use and
transportation of the product.
4.Channels of Distribution:
Decision regarding selection of most
appropriate channel of distribution like
wholesaling, distribution and retailing is
taken by the marketing manager and
sales manager.
5050

51. 5.Sales Management:
Selling is a part of marketing. Marketing
is concerned about all the selling
activities like customer identification,
finding customer needs, persuading
customer to buy products, customer
service, etc.
6. Advertising:
Advertisement decisions like scope and
time of advertisement, advertisement
message, selection of media, etc comes
into marketing.
5151

52. 7.Finance:
Marketing is also concerned about the
finance, as for every marketing activity
be it packaging, advertising, sales force
budget is fixed and all the activities
have to be completed with in the limit of
that budget.
8.After Sales services:
Marketing covers after sales services
given to customers, maintaining good
relationships with customers, attending
their queries and solving their problems.
5252

53. Definition of Marketing EvaluationDefinition of Marketing Evaluation
Techniques used after the marketingTechniques used after the marketing
plan period to analyze success inplan period to analyze success in
achieving individual marketingachieving individual marketing
objectives and to more broadly assessobjectives and to more broadly assess
the entire organization’s marketingthe entire organization’s marketing
effortsefforts

54. Control Process for theControl Process for the
Marketing PlanMarketing Plan
a.a. Setting standards based on plansSetting standards based on plans
b.b. Measuring performance againstMeasuring performance against
standardsstandards
c.c. Correcting deviations from standardsCorrecting deviations from standards
and plansand plans

55. Marketing Evaluation TechniquesMarketing Evaluation Techniques
a.a. Sales analysisSales analysis
b.b. Market-share analysisMarket-share analysis
c.c. Marketing cost and profitabilityMarketing cost and profitability
analysisanalysis
d.d. Efficiency ratiosEfficiency ratios
e.e. Marketing-effectiveness rating reviewMarketing-effectiveness rating review
f.f. Marketing auditMarketing audit

56. Different environments and theirDifferent environments and their
influences on marketinginfluences on marketing
Marketing EnvironmentMarketing Environment
An organization operates basically in three types
of environments macro, micro and internal
environment. These environments also affect the
marketing activities of an organization and they
have direct and indirect effect on these activities.
Some of the element of these environments are
controllable and some are non controllable for the
organizations. A brief description of these
environments and their effect on the firms are as
follow:
5656

57. The Macro EnvironmentThe Macro Environment
This environment can be studied in the form
of PEST Analysis.
Political Environment:Political Environment:
It includes how and to what degree
a government intervenes in the economy.
Specifically, political factors include areas such
as tax policy, labour law, law, trade, tariffs,
and political stability. Furthermore,
governments have great influence on
the health, education, and infrastructure of a
nation.
5757

58. Economical Environment:Economical Environment:
It includes economic growth, interest
rates, exchange rates and the inflation
rate. These factors have major impacts
on how businesses operate and make
decisions. For example, interest rates
affect a firm's cost of capital and
therefore to what extent a business
grows and expands. Exchange rates
affect the costs of exporting goods and
the supply and price of imported goods
in an economy
5858

59. Social Environment:Social Environment:
It includes the cultural aspects, health
consciousness, population growth rate,
age distribution, career attitudes and
emphasis on safety. Trends in social
factors affect the demand for a
company's products and how that
company operates. Companies may
change various marketing strategies to
adapt to these social trends (such as
offering innovative health insurance
schemes).
5959

60. Technological Environment:Technological Environment:
It includes technological aspects such
as R&D activity, automation, technology
incentives and the rate of technological
change such as how to market products
on internet effectively. Technological
shifts can affect costs, quality, and lead
to innovation.
6060

61. The Micro EnvironmentThe Micro Environment
These are internal factors close to the
company that have a direct impact on the
organization’s strategy. These factors include:
1.1.Customers:Customers:
Marketing organizations survive on the basis
of meeting the needs, wants and providing
benefits to their customers.
2. Suppliers:2. Suppliers:
Increase in raw material prices will have a
knock on affect on the marketing mix strategy
of an organization. Prices may be forced up as
a result.
6161

62. 3. Shareholders:3. Shareholders:
Satisfying shareholder needs may result in
a change in tactics of marketing
organization. Many internet companies
who share prices rocketed in 1999 and
early 2000 have seen the share price
tumble as they face pressures from
shareholders to turn in a profit.
4. Media:4. Media:
Consumer programmes with a wider and
more direct audience can also have a very
powerful and positive impact. It enforces
organizations to change their marketing
strategies. 6262

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5. Competitors:5. Competitors:
Marketing is all about differentiation.
What benefit can the organization
offer which is better than their
competitors. Can they sustain this
differentiation over a period of time
from their competitors? Competitor
analysis and monitoring is essential
for an organization to maintain its
position within the market.

64. The Internal EnvironmentThe Internal Environment
It refers to the combination of elements
inside the organization on which it has
full control. These are as follow:
Employees:Employees:
Employing the correct sales force and
keeping it motivated is an essential part
of the strategic planning process of a
marketing organization. Training and
development plays an essential role
particular in service sector marketing in-
order to gain a competitive edge.
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65. Processes:Processes:
Internal processes and procedures
affect the product delivery, after sales
services, customer satisfaction, etc. It is
a very important aspect in services
marketing.
Culture of the organization:Culture of the organization:
It refers to whether the culture is
supportive to marketing objectives of
the organization?
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