This document summarizes the marketing environment for services. It discusses both the macro and micro environment. The macro environment includes political, economic, social, cultural, and technological factors that influence all organizations within a sector. The micro environment refers to internal factors specific to a company, including management, customers, suppliers, competitors, and other stakeholders. It also examines how the political-legal, economic, socio-cultural, and technological environments uniquely impact service marketing. Competition is analyzed using Porter's five forces model.

1. Service Marketing Environment
BY: MEENAKSHI KHANNA
A.P.(MGMT),CPJCHS

2. Service Marketing Environment
All organizations operate within the marketing
environment. The marketing environment is
made up of two parts –
• Macro environment
• Micro environment

3. Macro Environment
•It represents all the outside influences which
have impact on an organization’s marketing or
business activity.
• It includes economic and political factors and
socio-cultural trends,
•for example the external environment
influences will effect all organizations within a
sector to a greater or lesser degree.

4. Micro Environment
• It is the internal environment of the organization .
•The internal environment relates to a particular
organization and its publics
•The factors to be analyzed in the internal
environment will include the following :
• Company management structure
• Customers
• Suppliers
• Channel members

5. • Competitors
• Other publics which may include
• Government and political bodies
• Pressure groups
• Financial institutions
• Shareholders
In effect any person or organization which can
influence the company’s marketing activities
and marketing success in way should be
included here.

6. The political legal , economic , social and
technological forces exert the same type of
effect on services as they do on products ;
however certain environment features have a
greater impact on service These environmental
factors are :--
• Political –legal environment
• Economic environment
• Socio-cultural environment
• Technological environment

7. Political –Legal Environment
•There is considerable influence of the political –
legal environment on service marketing .
•Service industries are often more closely regulated
than most other forms of private enterprise.
•Many service firms are being subject to
government regulations in addition to the usual
taxes and legislation.
• Service providers must understand and recognize
the impact of such regulation on their competitive
strategies.

8. Regulation generally influences service business in
four ways.
• Regulation generally influences the range and
type of competition.
• Regulation reduces the marketer’s array of
options and introduces certain rigidities into the
marketing process.
• Decision of the regulatory agencies being the
binding part of the marketing decision –making
process must be focused at understanding and
predicting those agencies action
• Pressure groups may be established to lobby and
effect change or modify , the directions being
taken by the regulatory bodies.

9. Economic Environment
• In economic environment changing life style,
changing world, changing economies and
changing technological advances and changing
consumer needs have contributed to increase
spending on consumer services.
• Technological innovations have also helped to
create a higher standard of living for a common
man, who presently spends a larger portion of
his or her increased disposable income of
services.

10. •But the role of technology has also aided in
circumventing barriers to trade , especially in its
role in designing and delivering services.
•The urbanization has widened the demand for
personal and public services .
•The demographic shift towards an older
population in some countries has resulted in
new service demands such as better healthcare,
convenience products etc.
•In the global environment , due to cross
country cultural issues , trade barrier ( both
tariff and non-tariff) tend to become more
restrictive in marketing of services.

11. Socio-Cultural Environment
Socio- cultural forces are set factors including
life style , social values and beliefs that affect the
marketing activities of an organization. These
factors have significant impact on the marketing
of services . The marketers have found the
intensive use of consultants and counselors in
their personal family and working lives. Health,
Beauty, travel, culture, and higher education
have partly replaced durable goods as status

12. symbols in the mind of many consumers . There
had been an increasing trend in the services like
security , insurance, legal, medical and investment.
Globally , the cultural dimensions affect services in
a more pronounced manner than do goods. Due to
inseparability characteristic of services the firms
may need to adapt their offerings to suit local taste
and preferences . KFC and Mc’Donald’s had to
adapt its products in India to suit local polates.
Business negotiations are very much subject to local
norms and local systems. Language is a major
cultural influence

13. Technological Environment
Technology has influenced our life styles,
consumption pattern and our economic well
being tremendously. Just think of internet ,
worldwide web (www) , E-commerce , video
conferencing. World has become too small and
boundary less. The service economies will be
technologically driven soon. Instead of expecting
service providers to improve results ;
management must see what kind of
organizational structure , incentives , technology
and skills can improve overall productivity.

14. COMPETITION
• IN addition to PEST, it is helpful to analyze the
competitive environment which affects the
development of Marketing plans for services.
Competitive environment should be studied in
light of following five forces:
a. Intensity of competitive rivalry
b. Threat of substitutes
c. Threat from new entrants
d. Bargaining power of buyers
e. Bargaining power of suppliers