1. MARKETING
ENVIRONMENT
Marketing Environment
The actors and forces outside marketing that affect
marketing management’s ability to build and
maintain successful relationships with target
customers.
Environmental Monitoring/ Scanning
The process of gathering information marketing
research and marketing intelligence) regarding
marketing environment, analyzing it and
forecasting the impact of whatever trends the
analysis suggests.
2. MARKETING
ENVIRONMENT
By carefully studying the environment, marketers
can adapt their strategies to meet new marketplace
challenges and opportunities.
How important is environmental monitoring to
business success?
In a word VERY.
One study of about 100 large companies
concluded, marketers having advanced systems to
monitor events in the environment exhibited higher
growth and greater profitability than firms that did
not have such systems.
3. MARKETING
ENVIRONMENTThe marketing environment is made up of a
microenvironment and a macro environment.
Microenvironment
The actors close to the company that affect its ability to
serve its customers – the company, suppliers, marketing
intermediaries, customer markets, competitors and
publics.
Macro-environment
The larger societal forces that affect the microenvironment
– demographic, economic, natural, technological, political
and cultural forces
4. MARKETING
ENVIRONMENTThe Company’s Microenvironment
The Company
Top management, finance, R & D, purchasing,
operations, accounting all are internal environment
for marketing.
These departments have an impact on the marketing
department’s plans and actions and under the
marketing concept all of these functions must think
consumer. They should work in harmony to provide
superior customer value and satisfaction.
5. MARKETING
ENVIRONMENTThe Company’s Microenvironment
Suppliers
Suppliers form an important link in the company’s
overall customer value delivery system.
Marketing executives often are not concerned
enough with the supply side of marketing. But they
do become very concerned when shortages occur.
Shortages underscore the need for cooperative
relationships with suppliers. Most marketers today
treat their suppliers as partners in creating and
delivering customer value.
6. MARKETING
ENVIRONMENTThe Company’s Microenvironment
Marketing Intermediaries
Firms that help the company to promote, sell, and
distribute its goods to final buyers, they include resellers,
physical distribution firms, marketing service agencies
and financial intermediaries.
Resellers: Wholesalers, Retailers
Physical Distribution: Logistics, Transportation
Marketing Services: Marketing Research, Advertising,
Media firms, Marketing Consultants
Financial Intermediaries: Banks, Insurance companies,
Credit Companies
7. MARKETING
ENVIRONMENTThe Company’s Microenvironment
Customers
People or organizations with wants to satisfy, money to
spend and the willingness to spend the money.
The company needs to study five types of customer
markets closely:
(1)Consumer markets
(2)Business markets
(3)Reseller markets
(4)Government markets
(5)International markets
8. MARKETING
ENVIRONMENTThe Company’s Microenvironment
Competitors
Marketers must do more than simply adapt to the needs of
target customers they must provide greater customer
value and satisfaction than its competitors do.
Types of competition:
-Direct Competition-similar products
-Substitution
-Customer’s limited buying power
10. MARKETING
ENVIRONMENTThe Company’s Macro-environment
The company and all of the other actors
operate in a larger macro-environment of
forces that shape opportunities and pose
threats to the company. Major forces in
the company’s macro-environment
include
12. MARKETING
ENVIRONMENTDemographic Environment
Demography is the study of human populations in
terms of size, density, location, age, gender, race,
occupation, and other statistics. It is of major interest
to marketers because it involves people, and people
make up markets
Demographic trends are constantly changing. Some
of the more interesting trends are
1). The world’s population (though not all countries)
rate is growing at an explosive rate that will soon
exceed food supply and ability to adequately service
the population. The greatest danger is in the poorest
countries where poverty contributes to the difficulties.
2) The most important trend is the changing age
structure of the population.
13. MARKETING
ENVIRONMENTKey Pakistani Demographic Trends
Changing Age Structure
Population is getting younger; many divisions
Baby and teen markets.
Day care centers
Changing Pakistani Family
Late marriages, fewer children, working
women, and nontraditional households
Frozen food industry and ready made products.
Commercialization and “mall culture”
Geographic Shifts
Moving to the metropolitan cities
Better-Educated & More White-Collar
Increased college attendance
and white-collar workers
15. MARKETING
ENVIRONMENTBaby Boomers
Born between 1946 and 1964
Represent 28% of the population; earn 50% of
personal income (USA)
Many mini-segments exist within the boomer
group
Entering peak earning years as they mature
Lucrative market for travel, entertainment,
housing, financial institutions and more
16. MARKETING
ENVIRONMENTGeneration X
Born between 1965 and 1976
The baby boom was followed by a birth dearth
Maintain a cautious economic outlook
Want a better quality of life
Represent $125 billion in annual purchasing
power
17. MARKETING
ENVIRONMENTGeneration Y
Born between 1977 and 1994
72 million strong; almost as large a group as
their baby boomer parents
Also called echo boomers
The echo boom has created a large teen and
young adult market.
New products, services, and media cater to
GenY
Computer, Internet and digitally savvy
Challenging target for marketers
19. MARKETING
ENVIRONMENTEconomic Environment
Affects consumer purchasing power and spending
patterns.
Classes of consumers include:
1. Upper class—spending patterns are not affected by
current economic events and who are a major market
for luxury goods.
2. Middle class—somewhat careful about its spending
but can still afford the good life some of the time.
3. Lower class must count their pennies when making
even the most basic purchases
20. MARKETING
ENVIRONMENT
Economic Environment
•Changes in Income – value marketing has been
promoted. Income distribution b/w the classes has
changed
•Changing consumer spending- Engle’s Law- if
Family income rises, %age on food declines,
housing remain constant, saving increases.
•Inflation, interest rate, unemployment
business life cycle (prosperity, recession,
depression & recovery)
21. MARKETING
ENVIRONMENT
Some Shocking Trends
Based on the requirements of 2150 calories, the
Government of Pakistan has adopted the official poverty
line in 1998-99 as Rs.650 per capita per month. According
to the caloric-based poverty definition (headcount ratio),
28.2 percent people in Pakistan lived below the poverty line
in 1998-99 and as per the survey report of State Bank of
Pakistan 2002-2003 it has increased to 33 percent. This
simply means that almost one third of Pakistan’s population
is living below the poverty line. With population of 149
million (2003), Pakistan ranks 7th in terms of World's
population size and this means that at least 50 million
people in Pakistan live below the poverty line.
22. MARKETING
ENVIRONMENT
Some Shocking Trends
In 1947, 32.7 million people lived in Pakistan. According to
estimates, by the end of 2004 the total population will be
151.96 million. Thus, in roughly two generations,
Pakistan’s population has increased by 119.28 million, or
has grown at an average rate of 2.8 percent per annum. And
presently this growth rate is 2.1 percent i.e. addition of 3.1
million persons every year. And with 2.1 percent population
growth rate the total number will reach 217 million by the
year 2020. This means that Pakistan has now more mouths
to feed, more families to house, more children to educate.
23. MARKETING
ENVIRONMENT
Some Shocking Trends
Unemployment in Pakistan has increased from
5.89 percent in 1998 to 7.82 percent in 2003.
Similarly unemployment in the rural areas
which was 5.0 percent in 1998 has risen to
6.94 percent in 2003 and urban unemployment
from 8.0 percent in 1999 to 9.9 percent in
2003.
24. MARKETING
ENVIRONMENT
Natural Environment
The natural environment involves natural resources
that are needed as inputs by marketers or that are
affected by marketing activities.
During the past two decades environmental
concerns have steadily grown.
Some trend analysts labeled the 1990s as the “Earth
Decade,” where protection of the natural
environment became a major worldwide issue
facing business and the public.
Specific areas of concern were:
25. MARKETING
ENVIRONMENTNatural Environment
1). Shortages of raw materials. Staples such as air, water, and
wood products have been seriously damaged and non-re-
newables such as oil, coal, and various minerals have been
seriously depleted during industrial expansion.
2). Increased pollution is a worldwide problem. Industrial
damage to the environment is very serious.
Far-sighted companies are becoming “environmentally
friendly” and are producing environmentally safe and recyclable
or bio de grad- able goods.
The public response to these companies is encouraging.
3). Government intervention in natural resource management
has caused environmental concerns to be more practical and
necessary in business and industry.
Instead of opposing regulation, marketers should help develop
solutions to the material and energy problems facing the world.
26. MARKETING
ENVIRONMENT
Our environment
Government has started programs of city
cleanliness. e.g signposts.
Increased pollution(6.8 times higher than WHO
standards) and shortage of RM and natural
resources. Depend on imported oil.
Loss of bio diversity ,vanishing wild life!
Worlds second highest rate of de-forestation.
Vehicles jumped to 400% in 20 years
Land pollution (Pakistanis generates 47920 tones of
solid wastes per day)
27. MARKETING
ENVIRONMENT
Technological Environment
The technological environment includes forces that create
new technologies, creating new product and market
opportunities.
Technology is perhaps the most dramatic force shaping our
destiny.
New technologies create new markets and opportunities.
Almost unlimited opportunities being developed daily
in health care, space industry, robotics, and bio-genetic
field.
Every new technology, however, replaces an older
technology.
The challenge is not only technical but also commercial—to
make practical, affordable versions of products.
28. MARKETING
ENVIRONMENT
Political Environment
The political environment includes laws, government
agencies, and pressure groups that influence and limit
various organizations and individuals in a given society.
Business is regulated by various forms of legislation.
1). Governments develop public policy to guide commerce
—sets of laws and regulations limiting business for the
good of society as a whole.
2). Almost every marketing activity is subject to a wide
range of laws and regulations.
29. MARKETING
ENVIRONMENT
Political Environment
Some trends in the political environment include:
Increasing legislation to:
a) Protect companies from each other.
b) Protecting consumers from unfair business practices.
c) Protecting interests of society against unrestrained
business behavior.
Mandatory recycling laws.
In India food companies need special approval to launch
brands that duplicate what already exists In market such as
another cola drink or brand of rice.
30. MARKETING
ENVIRONMENT
Cultural Environment
Society’s major cultural views are expressed in:
a) People’s views of themselves.
People vary in their emphasis on serving themselves versus serving
others. In the 1980s, personal ambition and materialism increased
dramatically, with significant implications for marketing.
The leisure industry was a chief beneficiary.
b) People’s views of others.
Observers have noted a shift from a “me-society” to a “we-society.”
Consumers are spending more on products and services that will
improve their lives rather than their image.
c) People’s views of organizations
People are willing to work for large organizations but expect them to
become increasingly socially responsible. Many companies are
linking themselves to worthwhile causes.
31. MARKETING
ENVIRONMENT
Cultural Environment
d)People’s views of society.
This orientation influences consumption patterns. “Buy American” versus
buying abroad is an issue that will continue into the next decade.
e) People’s view of nature.
More recently people have recognized that nature is finite and fragile and it
can be destroyed or spoiled by human activities. Consumers seek out
everything from natural, organic and nutritional products to fuel-efficient
cars and alternative medicines.
f) People’s views of the universe
Studies of the origin of man, religion, and thought-provoking ad campaigns
are on the rise.
Spiritual individualism may be a new theme. People have been moving
away from materialism to seek more permanent values-family, community,
earth, faith and more certain grasp of right and wrong.
32. MARKETING
ENVIRONMENTWhat’s the point of knowing these forces?
•Many companies view these forces as
“uncontrollable” to which they must adapt.
•Forces pose both opportunities and threats.
•Smart companies grab the opportunities and ward off
or prepare for the threats. They make things happen.
They take aggressive action and are proactive to
changes in the environment.
•Passive companies just sit and watch and react to
the changes as they happen.
•Looser companies just wonder what’s happened.
33. MARKETING
ENVIRONMENTConclusion
Companies should try to be proactive in
realizing its SWOT ,instead of being
reactive. They should try and change with
the environment instead of
avoiding/resisting or ignoring it.
