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Marketing

Environment
Environment
Marketing is essential an externally focused
function of an organisation.
Environment implies everything that is
external to the organisation.
So with the change in the environment
outside there is change in the marketing
activities of an organisation.
It is made of factors that are Controllable &
uncontrollable

Characteristics of Environment
Complex (change in one factor will affect
another)

Dynamic (Constantly changing in nature)

Multi-Faceted (viewed differently by
different observer)

Far-Reaching
Marketing Environment
It consist of all those internal & external
forces which affect the Marketing Strategies,
policies, decision & operations of a company
Environment provide them continuous
interaction b/w the customers & Business.
Based on the interaction the manager can
evolve marketing strategies for effective &
efficient Goal achievement.
Definition of ME
Acc to Philip Kotler:-
Marketing Environment as the external
factors & forces that affect a firms ability to
develop & maintain successful transaction &
relationship with the target customers.
Nature of ME

There are some forces in the environment
which influence on the Marketing Strategies.
I. Increased Competition:
Heavy advertisement by competitor
Introduction of new product by competitor
Price cut by a competitor
II. Labour Unrest
III. Social Changes
IV. Technological Changes
V. Changes in Fashion

Components Of Marketing
Environment
Controllable
(Internal)
Uncontrollable
(External)
Micro
Macro
Company
Acc. to Philip Kotler,
In designing Marketing Plans, the marketing
manager should take into confidence, the
other departments working in the company
such as:
Company Internal Environment
Top
Mgmt
Finance
Produc
tion
Accou
nting
R & D
Purcha
sing
Marketing
INTERNAL
ENVIEONMENT
EXTERNAL ENVIRONMENT
MACRO ENVIRONMENT
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DEMOGRAPHI C
TECHNOLOGI CAL
POLI TI CAL-LEGAL SOCI O-CULTURE
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EXTERNAL ENVIRONMENT
MICRO ENVIRONMENT
CUSTOMER
PUBLI CS
COMPANY SUPPLI ERS
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MARKETING
ORGANISATION
INTERNAL ENVIRONMENT
MARKETING MIX
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PRODUCT
PLACE
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Controllable or Internal ME
The internal environment of a firm include
controllable factors or variables such as Product
Design, Branding, packaging, pricing, advertising
& distribution polices of the firm.
From these forces marketeer get adequate
information about internal environment.
Firms marketing opportunity depends upon the
availability of these controllable variables and the
policy constituted on the basis of the controllable
variables is known as MARKETING-MIX.
Uncontrollable or External ME
The external Forces or Factors which
constitute Uncontrollable environment.
Divided into two parts
1. Micro Marketing Environment

2. Macro Marketing Environment
These factors affect the marketing
strategies, polices, plan.
Micro Marketing Environment
It is a companys immediate environment
means those factors that are in its
proximity.
These factors influence the companys
non-capability to produce & serve the
market.
These are also group of people who
affect the companys prospects directly.
Micro Marketing Environment
CUSTOMER
S
PUBLIC
S
COMPETITOR
S
INTERMEDIARI
ES

SUPPLIER
S
COMAPNY
Suppliers
Suppliers are an important link in the
companys overall customer value delivery
system.
Suppliers problem can seriously affect
marketing.
The company should develop specification,
searching the potential suppliers, selecting
the supplier (Quantity, Quality, Reliability,
Credit facility, Warranty & low price.)
Impact on production, output & Cost.
Marketing Intermediaries
Intermediaries also important for companys
overall value delivery system.
It helps the company to promote , sell &
distribute its product to final buyers.
It may be individuals or firm or agencies.
It include:
1. Reseller
2. Physical Distribution Firms
3. Service Agencies
4. Financial Intermediaries

Customers
It belong to population who demand &
consume the companys Product & services.

Customers
Industrial
Customers
Ultimate
Customers
Reseller
Govt.
Customers
Foreign
Customers
Competitors
Are individuals and firms who sell similar
goods & services in the same market.
It is necessary to build an efficient system of
marketing.
No single competitive marketing strategy is
best for all companies.
Each firm should consider its own size &
industry position compared to those of its
competitors.
Publics
Any group that has an actual or potential
interest in or impact on an organisations
ability to achieve its objectives.
Publics
Media
Publics
Financial
Publics
Govt.
Publics
Citizen
Action
Publics
Internal
Publics
Local
Publics
General
Publics
Company
Macro Marketing Environment
Legal
Env.
Economic
Env.
Ecological
Env.
Technological
Env.
Socio-
Culture
Env.
Consumer
Demand
Political
Env.
Competitive
Force
Demographics
Env.
Demographic Environment
It include the detail about the poplution
structure, age-group, income group, gender,
martial status, occupation & profession.
The study of the demographic features of the
target market helps the marketeer to develop
an understanding about prospective
consumers & market potentials of a product &
facilitates market segmentation.
Quantitative & Qualitative analysis of
demographics features of target market helps
the marketeer to determine the nature of
Contd
consumer demand.
For the long term success, a marketeer must
communicate with his consumers, anticipate
their problem, respond to their complaints &
make sure that the firm is operating properly.
Economic Environment
It mean the purchasing power & desire to
spend the income by the consumers,
result in effective demand, which in turn,
is influenced by economic conditions.
High economic growth assures higher
level of employment & income, this leads
to marketing boom.
Marketing environment is also influenced
by many other economic factors like
Interest rate, Money supply, price level,
Consumer level.

Social-Culture Environment
It determines the value system of the
society which in turn affects the
marketing environment.
Sociological factors are; Caste, Customs,
Culture Heritage, Life Style, Social
Values, Beliefs.
Culture differences are; Religion,
Languages, Food Habits, Dress Codes,
Festivals & Consumers Aspiration etc.
Contd.
There are 3 main aspects of social
environment:
1. Changes in our life style & social values.
(Like; changing role of women, emphasis
on quality of goods instead of quantity of
goods)
II. Major Social Problems.
( concern for pollution, need for safety in
products, socially responsible
Marketing)
III. Growing Consumerism
(Increase education level of consumer.)

Contd
People doesnt expect faulty & unsafe
products, untruthful advertising,
misleading & unsupported warranties,
deceptive packages, short weight,
fraudulent selling practices, unfair &
exploitative price.
Political & Legal Environment
It is also known as Public Policy
Environment
Marketing systems are affected by
government monetary & fiscal policies,
import & export policies, custom duties,
legislation controlling physical
environment, anti-pollution laws etc.
There are many act to prevent monopoly
& competition, to protect the consumer,
to protect the society.
Contd
Like:
MRTP Act
(Monopolistic & restrictive trade practices)
Consumer protection Act

Technological Environment
Change in technology means change in
production & production possibilities,
their manufacturing process, cost &
qualities.
A new development may bring a new
industry into existence or makes an
existing profitable product.
New marketing opportunity like; digital
watches, mobile phone, cable network,
canned & frozen readymade food,
computers, cosmetics etc from this much
change in living standard of developed &
developing countries.
Ecological Environment
Physical & geographical factors can play
an important role in constituting the non-
economic environment.
Eg: air pollution, noise pollution & water
pollution etc.
Proper attention should be paid to the
economic & efficient utilization of the
natural resources available in the country.
Steps taken to protect the environment:
1. Checking the environment
consequences of the product.
Contd
II. Raise price to cover environmental cost.
III. Introduce the environmental criteria
while deciding the product ingredients,
design & packaging.
IV. Develop ecologically superior products

Now, Government has introduced Eco
Mark for marketing eco-friendly
products.
Competitive Forces
In the free market economy, it is not possible to
take any marketing decision without evaluating
the existence of competition.
The marketing manager has little or no control
over the actions of competitors.
Marketing strategy is itself a plan to fight
against competition & to win in the battle of
competition.
Manger should take care competitor's viewpoint
towards the consumer, quality & characteristics
of competitors products & their strategies.
Consumer Demand
It is ever changing, unpredictable
It is also uncontrollable marketing
environment, which affect the overall
marketing environment.
Manager must study the needs, taste &
preferences of the consumer & also
analyse their effects on the demand of
the product.

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