Marketing Environment

1. Marketing Environment
Chapter Two
Dr. Gopal Thapa
Tribhuvan University

2. Marketing Environment
 The term Marketing Environment refers to the
forces and factors that affects the organization
ability to built and maintain good relationship with
its customers.
 Marketing environment surrounds the
organization and it impacts upon the organization.
 Marketers have to interact with internal and
external people at micro and macro level and
builds internal and external relationships
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3. Marketing Environment
 Marketing environment comprises all the actors
and forces outside marketing that affect marketing
management’s ability to develop and maintain
successful transactions with its target customers.
 Philip Kotler
 Marketing environment includes the internal and
external influences which affect marketing
decision-making and have and impact on its
performance.
 Dictionary of Marketing
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4. Marketing Environment
 Successful companies recognize and respond
profitably to unmet needs and trends
 Ace Travels for exotic vacations
 sugar free biscuits for diabetes
 Western Union Money Transfer for the fastest
remittance.
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5. Either Chang or Die
 Puja washing shop, Mayalu bathing shop,
Brighter and Everest toothpaste which were the
market leaders a few decade back in Nepalese
market are already disappeared from the market
because they ignored macro environmental
changes
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6. Fad
 Unpredictable, short-lived, and without social,
economic, and political significance
 A company can cash in on a fad such as:
 T-shirt for Happy Holi, I love Nepal, Buddha
was born in Nepal, etc. but this is more a
matter of luck and good timing than anything
else.
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7. Trends
 Direction or sequence of events that have some
momentum and durability.
 use of smart phone,
 study in boarding school,
 use of faded jeans pant,
 use of ayurvedic products
are different present trends of Nepalese market.
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8. Trends
 Trends are more predictable and durable.
 A trend reveals the shape of the future.
 A trend has longevity, is observable across
several market areas and consumer activities, and
is consistent with other significant indicators
occurring or emerging at the same time.
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9. Megatrends
 Large social, economic, political and
technological changes that are slow to form, and
once in place, they influence us for some time—
between seven and ten years, or longer.
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10. Ten Megatrends: Identified by: Naisbitt
 The booming global economy
 A renaissance in the arts
 The emergence of free-market socialism
 Global lifestyles and cultural nationalism
 The privatization of the welfare state
 The rise of the Pacific Rim
 The decade of women in leadership
 The age of biology
 The religious revival of the new millennium
 The triumph of the individual
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11. Micro Environment
 Micro environment consists of the forces close to the
company that affect its ability to serve its serve its
customers – the company, suppliers, marketing channels,
customers, competitors and publics.
 Philip Kotler
 Micro environment includes the factors or elements in a
firm’s immediate environment which affect its
performance and decision-making. These elements include
the firm’s suppliers, competitors, marketing
intermediaries, customers and publics.
 Dictionary of Marketing
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12. Micro Environment
 Individuals and organizations that are close to the
marketing organization and directly impacts its
ability to serve its customers, makes micro
environment.
 The micro environment refers to the forces that are
close to the marketing organization and directly
impact the customer experience.
 It includes the organization itself, its suppliers,
marketing intermediaries, customers, markets or
segments, competitors, and publics.
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13. Micro Environment
 Micro environment is also know as operating or
task environment.
 The actors close to the company that affect its
ability to serve its customers:
 The company
 Suppliers
 Marketing intermediaries
 Customer markets
 Competitors and
 Publics (Kotler & Armstrong)
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14. The Company
 It includes:
 Top management
 Finance, R&D, purchasing, operations and accounting
 Company’s mission, objectives, strategies and policies
 Resources, organizational structure
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15. Suppliers
 Suppliers form an important link in the company’s
overall customer value delivery system
 They provide the resources needed by the
company to produce goods and services
 Suppliers problem can seriously affect marketing
 Marketing managers must watch supply
availability – supply shortage or delays, labor
strikes etc.
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16. Suppliers
 Rising supply cost force to increase price that can
harm company’s sales volume, image, as well as
customer satisfaction
 Most marketers today treat their suppliers as
partners in creating and delivering customer value
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17. Marketing Intermediaries
 Marketing intermediaries help to the company to
promote, sale and distribute its goods to customers
 They includes:
 Resellers (wholesalers and retailers)
 Physical distribution firms (Transport and warehouse)
 Marketing service agencies (Research firms, ad
agencies, media, marketing consultants) and
 Financial intermediaries (Bank, insurance co.)
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18. Marketing Intermediaries
 Like suppliers, marketing intermediaries form an
important component of the company’s overall
value delivery system
 The company must partner effectively with
marketing intermediaries to optimize the
performance of entire system
 Thus, today’s marketers recognize the importance
of working with their intermediaries as partners
rather than simply as channels through which they
sell their products.
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19. Customers
 The company needs to study five types of
customers markets closely
 They are:
 Consumer markets (personal consumption)
 Business markets (production process)
 Reseller markets (to resell at profit)
 Government markets (public service)
 International markets (buyers in other countries
including consumers, producers, resellers and
governments)
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20. Competitors
 The marketing concept states that to be successful,
a company must provide greater customer value
and satisfaction than its competitors do.
 They must gain strategic advantage by positioning
their offerings strongly against competitors’
offerings in the mind of customer
 No single competitive marketing strategies is best
for all companies.
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21. Publics
 A public is any group that has an actual or
potential interest in or impact on an organizations
ability to achieve its objectives.
 Various types of publics are:
 Financial publics (bank, investment company, stock holders)
 Media publics (Radio, TV, newspaper, magazine)
 Government publics (product safety, packaging, truth in
advertising)
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22. Publics
 Citizen action publics (Consumer organizations,
environmental groups, minority groups)
 Local publics (Neighborhood residents, community
organization)
 General publics (Laymen)
 Internal publics (Workers, managers, volunteers, BOD)
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23. Macro Environment
 Macro environment refers to all forces that are
part of the larger society and affects the micro
environment.
 It includes demography, economy, politics,
culture, technology, and natural forces. Macro
environment is less controllable.
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24. Macro Environment
 The large societal forces that affect the micro
environment –
 Demographic
 Economic
 Natural
 Technological
 Political and
 Cultural forces (Kotler & Armstrong)
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25. Demographic Environment
 Demography is the study of human population in
terms of size, density, location, age, gender, race,
occupation, and other statistics.
 The demographic environment is of major interest
to marketers because it involves people and people
make up markets.
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26. Demographic Environment
 The world population is growing at an explosive
rate. It now totals more than 6.3 billion and will
exceed 8.2 billion by the year 2030.
 The world’s large and highly diverse population
poses both opportunities and challenges
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27. Demographic Environment
 A growing population means growing human
needs to satisfy
 Marketers keep close track of demographic trends
and developments in their markets, both at home
and abroad.
 They track changing age and family structures,
geographic population shifts, educational
characteristics and population diversity.
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28. It world population is 1000
 Females 520, males 480
 Children 330, sixty people over age of 65, ten
college graduates, and 335 illiterate adults
 North American 52, Russians 55, Latin Americans
84, Europeans 95, 124 Africans and Asians 584
 Christians 329, Muslims 178, Hindus 32,
Buddhists 60, Jews 3, nonreligious 167, atheists
45 and others 86
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29. Demographic Environment
 Population size
 Population growth
 Age mix
 Migration
 Urbanization
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30. Economic Envoironment
 Markets require buying power as well as people.
 The economic environment consists of factors
that affect consumers’ purchasing power and
spending patterns.
 Nations vary greatly in their levels and
distribution of income.
 Some countries have subsistence economies.
 Other countries have industrial economies
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31. Economic Environment
 Economic system (Free market, centrally planned, & mixed
economy)
 Economic policies (Monetary, fiscal, & industrial policy)
 Economic condition (Income, business cycle, inflation, stage
of economic development)
 Globalization
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32. Technological Environment
 Technological environment includes forces that create new
technologies, creating new products and market opportunities
 It is the most dramatic force now shaping our destiny.
 Technology has released such wonders as antibiotics, organ
transplants, notebook computers and the Internet.
 It also has released such horrors as nuclear missiles, chemical
weapons and assault rifles.
 It has released such mixed blessings as the automobile, television and
credit cards.
 Our attitude toward technology depends on whether we are more
impressed with its wonders or its blunders
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33. Technological Environment
 Prithvi Narayan Shah did not know about automobiles,
airplanes, radios or the electric light.
 Janga Bahadur Rana did not know about television,
automatic dishwashers, air conditioners, antibiotics or
computers.
 Chandra Shamser did not know about xerography,
synthetic detergents, tape recorders, birth control pills or
earth satellites.
 King Tribhuvan did not know about personal computers,
DVD players or the World Wide Web.
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34. Technological Environment
 When old industries fought or ignored new
technologies, their business declined.
 Thus, marketers should watch the technological
environment closely. Companies that do not keep
up with technological change soon will find their
products outdated.
 And they will miss new product and market
opportunities.
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35. Technological Environment
 Level of technology
 Pace of technological change
 Technology transfer
 Research and development
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36. Political-legal Environment
 Marketing decisions are strongly affected by
developments in the political environment.
 Legislation affecting business around the world
has increased steadily over the years
 Most of the developed countries have so many
laws covering issues:
 competition, fair trade practices, environment protection, product
safety, truth in advertising, consumer privacy, packaging and
labeling, pricing, and other important areas.
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37.  Norway bans several forms of sales promotion – trading
stamps, contests, premiums – as being inappropriate or
unfair ways of promoting products.
 Thailand requires food processors selling national brands
to market low price brands also so that low income
consumers can find economy brands on the shelves.
 In India, food companies must obtain special approval to
launch brands that duplicate those already existing on the
market, such as additional cola drinks or new brands of
rice.
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38. Political-legal Environment
 Political system
 Political institution
 Government agencies
 Political philosophy
 Political stability
 Business law and court of laws
 Law administrators
 Power blocks
 Regional groups
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39. Political-legal Environment
 Marketing decisions are strongly affected by
developments in the political environment.
 Legislation affecting business around the world
has increased steadily over the years
 Most of the developed countries have so many
laws covering issues:
 competition, fair trade practices, environment protection, product
safety, truth in advertising, consumer privacy, packaging and
labeling, pricing, and other important areas.
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40. Natural Environment
 It involves the natural resources that are needed
as inputs by marketers or that affected by
marketing activities .
 Growing environmental concerns:
 E.g. Air and water pollution
 Global warming
 Shortage of raw materials
 Use of renewable resources
 Disposal of chemical and nuclear wastages
 Mercury level in ocean
 Government intervention in natural resources
management
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41. Natural Environment
 Emergence of green marketing
 Ecologically safer products
 Recyclable or biodegradable packaging
 Recycled materials
 Pollution control
 Energy-efficient operations
 Natural calamities like flood, landslide, earthquake
 Pre-Fab materials for home building in Nepal in
present context.
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42. Socio-cultural Environment
 Social institution (family, reference group, opinion leader,
social class)
 Social change
 Life style
 Value and belief
 Religion
 Language
 Attitude
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43. Environment Analysis
 Environmental analysis is a strategic tool.
 It is a process to identify all the external and
internal elements, which can affect the
organization's performance.
 The analysis entails assessing the level of threat or
opportunity the factors might present.
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44. Thank You
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