Marketing isn't

somebody’s
responsibility- it’s
everyone’s
responsibility
 8.COMPETITION

Four levels of competition, based on

degree of product substitutability:
1. Brand competition: company that
offer similar products and services to
the same customers at similar prices.
LG might see its major competitor as
Samsung.

2. Industry competition: A company

sees its competitors as all companies
that make the same product or class
of products. Thus, LG would be
competing against all other consumer
durable manufacturers.
Dr. Rajesh Verma, Lovely Professional University. 4–2
 3. Form competition: A
company sees its competitors as
all companies that manufacture
products that supply the same
service. Maruti would see itself
competing against manufacturers
of all vehicles, like motorcycles,
bicycles trucks.

4. Generic competition: A
company sees its competitors as
all companies that compete for
the same consumer dollars. LG
would see itself competing with
companies that sell consumer
durables, vacations, furniture etc.
Dr. Rajesh Verma, Lovely Professional University. 4–3
 EVOLUTION OF MARKETING
Marketing Management Philosophies

Dr. Rajesh Verma, Lovely Professional University. 4–4

Dr. Rajesh Verma, Lovely Professional University. 4–5
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Dr. Rajesh Verma, Lovely Professional University. 4–7
 Difference between Marketing & Selling

SELLING MARKETING
Selling starts with seller Marketing starts with buyers
Emphasis is on saleable surplus Emphasis is on identification of a
market opportunity
Seeks to quickly convert Seeks to convert customer needs
products into cash into products
Views business as goods Views business as customer
producing process satisfying process
Cost determines price Consumer determines price
Views customer as the last link in Views customer as the very
business purpose of the business
Firm makes the product first & What is to be offered is
then figure out how to sell it determined by the customer
Dr. Rajesh Verma, Lovely Professional University. 4–8
 MARKETING TASKS

1. Entrepreneurial marketing:
Most companies are started by individuals who visualize an
opportunity and knock on every door to gain attention.

2. Formulated marketing:
As small companies achieve success, they inevitably move
toward more formulated marketing.

3. Intrepreneurial marketing:
Their brand and product managers start living with their
customers and visualizing new ways to add value to their
customers’ lives.
Dr. Rajesh Verma, Lovely Professional University. 4–9
 SCOPE OF MARKETING

• Goods — physical offerings such as food, commodities, clothing, housing,

appliances, and so forth
• Services — such as airline travel, hotels, maintenance and repair, and
professionals (accountants, lawyers, engineers, doctors, and so on)
• Experiences — for example, a visit to a theme park or dinner at the most popular
restaurant
• Events — for instance, the Olympics, trade shows, sports, and artistic performances
• Persons — such as artists, musicians, rock bands, celebrity CEOs, and other high
profile individuals
• Places — cities, states, regions, and nations that attract tourists, businesses, and
new residents
• Properties — including real estate and financial property in the form of stocks and
bonds
• Organizations — entire companies (including not-for-profit institutions) that have
strong, favorable images in the mind of the public
• Information — produced, packaged, and distributed by schools, publishers,
Website creators, and other marketers
• Ideas — concepts such as "Donate blood" or “Save Water" that reflect a deeply held
value or social need
Dr. Rajesh Verma, Lovely Professional University. 4–10
 MARKETING ENVIRONMENT

Today you have to run faster to stay in the same place.

The marketing environment consists of actors and

forces outside the organization that affect
management’s ability to build and maintain
relationships with target customers.
Environment offers both opportunities and threats.
Marketing intelligence and research is used to collect
information about the environment.

Dr. Rajesh Verma, Lovely Professional University. 4–11

 The marketing environment is madeup of microenvironment and
macro environment.

The micro environment consists of the forces close to the company

that affect its ability to serve its customers - the company,
suppliers, marketing channel firms, customer markets, competitors
and publics.

The macro environment consists of the larger societal forces that

affect the whole microenvironment - demographic, economic,
natural, technological, political and cultural forces.

Dr. Rajesh Verma, Lovely Professional University. 4–12

 MICRO ENVIRONMENT

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 I. THE COMPANY

The first force is the company itself and the role it plays in the
microenvironment. This could be deemed the internal
environment.
• Top management is responsible for setting the company’s
mission, objectives, broad strategies, and policies.
• Marketing managers must make decisions within the
parameters established by top management.
• Marketing managers must also work closely with other
company departments.
• All departments must “think consumer” if the firm is to be
successful.
Dr. Rajesh Verma, Lovely Professional University. 4–14
 II. SUPPLIERS

Suppliers are firms and individuals that provide the resources

needed by the company and its competitors to produce goods
and services. They are an important link in the company’s
overall customer “value delivery system.”

3. One consideration is to watch supply availability (such as

supply shortages).

5. Another point of concern is the monitoring of price trends of

key inputs. Rising supply costs must be carefully monitored.

Dr. Rajesh Verma, Lovely Professional University. 4–15

 III. MARKETING INTERMEDIARIES

Marketing intermediaries are firms that help the company to promote, sell, and
distribute its goods to final buyers.
• Resellers are distribution channel firms that help the company find customers
or make sales to them.
• These include wholesalers and retailers who buy and resell merchandise.
• Resellers often perform important functions more cheaply than the company
can perform itself. However, seeking and working with resellers is not easy
because of the power that some demand and use.
Physical distribution firms help the company to stock and move goods from
their points of origin to their destinations. Examples would be warehouses
(that store and protect goods before they move to the next destination).
Marketing service agencies (such as marketing research firms, advertising
agencies, media firms, etc.) help the company target and promote its
products.
Financial intermediaries (such as banks, credit companies, insurance
companies, etc.) help finance transactions and insure against risks.
Dr. Rajesh Verma, Lovely Professional University. 4–16
 IV. CUSTOMERS
Company must study its customer markets closely since each market
has its own special characteristics. These markets normally include:
• Consumer markets (individuals and
households that buy goods and
services for personal consumption).
• Business markets (buy goods and
services for further processing or for
use in their production process).
• Reseller markets (buy goods and
services in order to resell them at a
profit).
• Government markets (agencies that
buy goods and services in order to
produce public services or transfer
them to those that need them).
• International markets (buyers of all
types in foreign countries).
Dr. Rajesh Verma, Lovely Professional University. 4–17
 V. COMPETITORS

Every company faces a wide range of competitors. A company must

secure a strategic advantage over competitors by positioning their
offerings to be successful in the marketplace. No single competitive
strategy is best for all companies.

Dr. Rajesh Verma, Lovely Professional University. 4–18

 VI. PUBLICS
A public is any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives.
Generally, publics can be identified as being:
2. Financial publics--influence the company’s ability to obtain
funds.
3. Media publics--carry news, features, and editorial opinion.
4. Government publics--take developments into account.
5. Citizen-action publics--a company’s decisions are often
questioned by consumer organizations.
6. Local publics--includes neighborhood residents and community
organizations.
7. General publics--a company must be concerned about the general
public’s attitude toward its products and services.
8. Internal publics--workers, managers, volunteers, and the board of
directors.
Dr. Rajesh Verma, Lovely Professional University. 4–19
 MACRO ENVIRONMENT

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 I. DEMOGRAPHIC

Demography is the study of human populations in terms of size, density, location, age, sex,
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 more
interesting ones are.
1). The world’s population rate is growing at an explosive rate that will soon exceed food
supply and ability to adequately service the population. Emerging markets such as India &
China are receiving increased attention from global marketers.
2). The most important trend is the changing age structure of the population. The population
is aging because of a slowdown in the birth rate and life expectancy is increasing. The new
prime market is the middle age group
Many in the modern family now “telecommute”--work at home or in a remote office and
conduct

their business using fax, cell phones, modem, or the Internet In general, the population is
becoming better educated. The work force is be-coming more white-collar. Products such
as books and education services appeal to groups following this trend. Technical skills (such
as in computers) will be a must in the future. The final demographic trend is the increasing
ethnic and racial diversity of the population. Diversity is a force that must be recognized in the
next decade. However, companies must recognize that diversity goes beyond ethnic heritage.
Dr. Rajesh Verma, Lovely Professional University. 4–21
 II. ECONOMIC ENVIRONMENT
The economic environment includes those factors that affect consumer
purchasing power and spending patterns. Major economic trends
include:
• Personal consumption (along with personal debt) has gone up and
the early 1990s brought recession that has caused adjustments both
personally and corporately in this country. Today, consumers are
more careful shoppers.
• Value marketing (trying to offer the consumer greater value for their
money) is a very serious strategy. Real income is on the rise again but
is being carefully guarded by a value-conscious consumer.
• Income distribution is still very skewed and all classes have not
shared in prosperity. In addition, spending patterns show that food,
housing, and transportation still account for the majority of consumer
earnings. It is also of note that distribution of income has created a
“two-tiered market” where there are those that are affluent and less
affluent.
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 III. 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 following specific areas of concern:
• Shortages of raw materials. Staples such as air, water, and wood products
have been seriously damaged and non-renewable such as oil, coal, and
various minerals have been seriously depleted during industrial expansion.
• 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 biodegradable goods.
• Government intervention in natural resource management has caused
environmental concerns to be more practical and necessary in business and
industry.
• Environmentally sustainable strategies. The so-called green movement has
encouraged or even demanded that firms produce strategies that are not only
environmentally friendly but are also environmentally proactive.
Dr. Rajesh Verma, Lovely Professional University. 4–23
 IV. TECHNOLOGICAL ENVIRONMENT

The technological environment includes forces that create new technologies,

creating new product and market opportunities.
2. Technology is perhaps the most dramatic force shaping our destiny.
3. New technologies create new markets and opportunities.
4. The following trends are worth watching:
 Faster pace of technological change. Products are being
technologically outdated at a rapid pace.
 There seems to be almost unlimited opportunities being developed
daily. Consider the expanding fields of health care, the space shuttle,
robotics, and biogenetic industries.
 The challenge is not only technical but also commercial--to make
practical, affordable versions of products.
 Increased regulation. Marketers should be aware of the regulations
concerning product safety, individual privacy, and other areas that
affect technological changes. They must also be alert to any possible
negative aspects of an innovation that might harm users or arouse
opposition.
Dr. Rajesh Verma, Lovely Professional University. 4–24
 V. POLITICAL ENVIRONMENT

The political environment includes laws, government agencies, and pressure

groups that influence and limit various organizations and individuals in a
given society. Various forms of legislation regulate business.
• Governments develop public policy to guide commerce--sets of laws and
regulations limiting business for the good of society as a whole.
• Almost every marketing activity is subject to a wide range of laws and
regulations.
Some trends in the political environment include:
1). 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.
2). Changing government agency enforcement. New laws and their enforcement
will continue or increase.

Dr. Rajesh Verma, Lovely Professional University. 4–25

 3). Increased emphasis on ethics and socially responsible
actions. Socially responsible firms actively seek out ways to
protect the long-run interests of their consumers and the
environment.

1.Enlightened companies encourage their managers to look

beyond regulation and “do the right thing.”
2. Recent scandals have increased concern about ethics and
social responsibility.
3. The boom in e-commerce and Internet marketing has created
a new set of social and ethical issues. Concerns are Privacy,
Security, Access by vulnerable or unauthorized groups.

Dr. Rajesh Verma, Lovely Professional University. 4–26

 VI. CULTURAL ENVIRONMENT

The cultural environment is made up of institutions and other forces that affect
society’s basic values, perceptions, preferences, and behaviors. Certain cultural
characteristics can affect marketing decision-making. Among the most dynamic
cultural characteristics are:
1). Persistence of cultural values. People’s core beliefs and values have a high
degree of persistence. Core beliefs and values are passed on from parents to
children and are reinforced by schools, churches, business, and government.
Secondary beliefs and values are more open to change.

2). Shifts in secondary cultural values. Since secondary cultural values and
beliefs are open to change, marketers want to spot them and be able to capitalize
on the change potential. 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.
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 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. Honesty in
appeals is a must.
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. There is a growing trend toward people’s feeling
of mastery over nature through technology and the belief that nature is
bountiful. However, nature is finite. Love of nature and sports associated with
nature are expected to be significant trends in the next several years.
f). People’s views of the universe. Studies of the origin of man, religion, and
thought-provoking ad campaigns are on the rise.
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