marketing environmrnt

8/8/2019 MARKETING Environmrnt

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Copyright 2003 Prentice-Hall, Inc.

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MARKETING ENVIRONMENTMARKETING ENVIRONMENT

Presentation byPresentation by

POONAMPOONAM


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Kotler onMarketing

Today youToday you

have to runhave to runfaster to stayfaster to stay

in place.in place.


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Topic Objectives In this Topic , we focus on two questions:In this Topic , we focus on two questions:

What are the key methods for tracking andWhat are the key methods for tracking and

identifying opportunities in theidentifying opportunities in themacroenvironment?macroenvironment?

What are the key demographic, economic,What are the key demographic, economic,

natural, technological, political, and culturalnatural, technological, political, and cultural

developments?developments?


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Analyzing Needs and Trends in

the Macroenvironment TrendTrend -- A direction or sequence ofA direction or sequence of

events that has some momentum andevents that has some momentum and

durability (durability ( many opportunities are found bymany opportunities are found by

identifying trendsidentifying trends))

FadFad -- Is unpredictable , short livedIs unpredictable , short lived

and without social ,economic andand without social ,economic andpolitical significancepolitical significance


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Companies and their suppliers, market intermediaries ,

customers , competitors and publics all operate in a

Macroeconomic environment of forces and trends that pose threats.

These forces represent non-controllable , to which the

company must monitor and respond

E.g. explosive population growth (demographics) --------leads to

more resource depletion and pollution (natural)-------- which leads

to consumers call for more laws (political legal) , which stimulate

New technological solutions and products ( technological) , which ,if they are affordable ( economic) , may actually change attitudes

and behavior ( social- cultural).


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Competitive Advantage

Titan watches shook the giant HMTTitan watches shook the giant HMT

HLL was cornered by Nirma , HLLs surfs declineHLL was cornered by Nirma , HLLs surfs declinecould not be stoppedcould not be stopped

Television giant like Crown , Weston , Bush lost out toTelevision giant like Crown , Weston , Bush lost out tobrands like ONIDA and Videocon who consequentlybrands like ONIDA and Videocon who consequentlylost out to BPL and Sonylost out to BPL and Sony

Videocon launched its washing machine in 1988 andVideocon launched its washing machine in 1988 and

suddenly thereafter , one saw an explosion in thesuddenly thereafter , one saw an explosion in themarket with about half a dozen brands.market with about half a dozen brands.

1988 onwards , we saw birth and rapid growth of dot1988 onwards , we saw birth and rapid growth of dotcom companiescom companies


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Demographic EnvironmentDemographic Environment Worldwide PopulationWorldwide Population

GrowthGrowth--7.47 Billion by 20157.47 Billion by 2015

Marketer needs to understand theMarketer needs to understand the ageage composition in acomposition in acountry. This will help him decide his optimalcountry. This will help him decide his optimal marketingmarketing--

mixmix Will help him take strategic decisions regarding enteringWill help him take strategic decisions regarding entering

a particulara particular market segmentmarket segment

85% is youth market with age upto 44 years85% is youth market with age upto 44 years

Pepsi , Bajaj , Kawasaki , Hero Honda , TVS Suzuki ,EscortsPepsi , Bajaj , Kawasaki , Hero Honda , TVS Suzuki ,Escorts

Yamaha, new sleek bicycles by Hero , Avon , BSA withYamaha, new sleek bicycles by Hero , Avon , BSA withbrands like Street Cat, Hero Ranger and BSAbrands like Street Cat, Hero Ranger and BSA

Readymade garmentsReadymade garments International chains like BenettonInternational chains like Benettonand specialized stores like Big Kids Kemp , Catmosand specialized stores like Big Kids Kemp , Catmos

Role of a womanRole of a woman

Identifying and Responding to the

Major Macroenvironment Forces


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Changes in the value system :- values are the beliefs which are

held by society and rarely change over a period of time. E.g. strong

family bondage and love for the family as a core value has been

the major driving force in the Indian market . Like Vicks Vaporub

story , Acqua guard water purifiers , Videocon washingmachines

( Are you ready for the show) and Maggie Noodles

Acquired values thru access to international media and satelitechannels like CNN, BBC, Star and ATN like more spending on

leisure and leisure goods

Not willing to postpone his gratification of his needs for

tomorrow, housing companies , credit cards and Financecompanies are doing well

Internet and telephone are influencing the development of new

value systems spread of internet and computer education


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Economic EnvironmentEconomic Environment it consists of the resourcesit consists of the resourcesraw material ,the product availabilityraw material ,the product availability

-- GNP , Per capita income , balance of payment positionGNP , Per capita income , balance of payment position, industry life cycle like recovery , boom , and, industry life cycle like recovery , boom , anddepressiondepression

-- Trends in prices of goods and servicesTrends in prices of goods and services-- Fiscal policies and prime rate of interest charged byFiscal policies and prime rate of interest charged by

commercial bankscommercial banks

-- Hike in prices of raw material , electricity will showHike in prices of raw material , electricity will show

inflationary trendsinflationary trends----------will pose serious threat towill pose serious threat tofirms survivalfirms survival

-------------- market driven company will analyze all its costmarket driven company will analyze all its costdrivers and plan their eliminationdrivers and plan their elimination

Identifying and Responding to the Major

Macroenvironment Forces


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Economic Environment

The rise in the standard of living of rural belt with govt. supportThe rise in the standard of living of rural belt with govt. supportand better agri sectorand better agri sector--------increase in rural disposal incomeincrease in rural disposal income

Govt. policies on the development of infrastructure like roadsGovt. policies on the development of infrastructure like roads,banking , financial institutions,banking , financial institutions------------had made task easy forhad made task easy formarketersmarketers

Import sector has brought new technologies increasing qualityImport sector has brought new technologies increasing qualityof productof product

Alliances and mergers and acquisitions have produced readyAlliances and mergers and acquisitions have produced ready--made market for brands ( Limca , Thumsmade market for brands ( Limca , Thums up , Glaxo,up , Glaxo,Everready , KissanEverready , Kissan

oror

Has helped increase Distribution network e.g Whirlpool byHas helped increase Distribution network e.g Whirlpool byacquiring Kelvinator , Cocaacquiring Kelvinator , Coca--Cola by acquiring Parle brandsCola by acquiring Parle brands

oror

Has resulted in preHas resulted in pre--emptive moves e.g Videocon moves in theemptive moves e.g Videocon moves in theupperupper end segment thru Kenstar and Bazooka , Lakmeend segment thru Kenstar and Bazooka , Lakmeintroduced Orchids as premium cosmetics , HLL by acquiringintroduced Orchids as premium cosmetics , HLL by acquiringBrooke Bond Lipton LimitedBrooke Bond Lipton Limited


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Economic Environment

Existing players have started expanding their coverage ofExisting players have started expanding their coverage of

market with variety of products becoz of entry and impact ofmarket with variety of products becoz of entry and impact ofKorean , Japanese , Chinese , Swiss and American brandsKorean , Japanese , Chinese , Swiss and American brands

Videocon TelevisionVideocon Television Bazooka ( for top end) , Turbo ToughBazooka ( for top end) , Turbo Tough

(middle price segment) Budget line ( economy class)(middle price segment) Budget line ( economy class)

Titan watchesTitan watches Insignia ( an international watch) , Raaga (Insignia ( an international watch) , Raaga (silver jewel watch) , Tanishq ( supersilver jewel watch) , Tanishq ( super--premium) , Royale (premium) , Royale (

upmarket buyer) Sonata (mid price and lower end) ,upmarket buyer) Sonata (mid price and lower end) ,

Classiques ( for executives)Classiques ( for executives)

In preIn pre--liberalization era , switchgears were profitableliberalization era , switchgears were profitable

business for Siemens but after Excise duties on switchgearsbusiness for Siemens but after Excise duties on switchgearscrashed Siemens were badly bruised with competition fromcrashed Siemens were badly bruised with competition from

priceprice competitive Korean companies Hyundai , Daewoo`competitive Korean companies Hyundai , Daewoo`


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Natural EnvironmentNatural Environment

EcologyEcology business firms will have to know the naturebusiness firms will have to know the natureand dimensions of environmental regulations and to whatand dimensions of environmental regulations and to whatextent these factors will affect their business prospect e.g.extent these factors will affect their business prospect e.g.

wood based industrieswood based industries ClimateClimate ban on self cooling drink cans which couldban on self cooling drink cans which could

cause Global Warming , resulting emissions could speedcause Global Warming , resulting emissions could speedup the rate of climate change and sea level would riseup the rate of climate change and sea level would rise

Water problemsWater problems the brand failed to qualify the test bythe brand failed to qualify the test by

Department of prevention of food adulteration are BisleriDepartment of prevention of food adulteration are Bisleri, Yes, Yes

PowerPower Blood supply by blood banks played havocBlood supply by blood banks played havocbecause of continuous power fluctuations., to be kept at 4because of continuous power fluctuations., to be kept at 4--6 degrees6 degrees




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BUSINESSCAN DOExcellent companies concern for society as a foremostagainst the consumer interest.

Marketer for implementing societal marketing concept

by constantly looking for alternative technologies thru

introduction of recycled papers , and use of naturalingredients

Think on for new and alternative affordable

technologies

The Central Road Research Institute ( CRRI) propagatethe use of Fly-ash waste in construction of roads ,

building bridges etc.to make them eco-friendly.

Stop felling of tree


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Technological EnvironmentTechnological Environment it creates an opportunity for ait creates an opportunity for amarketer to develop new productsmarketer to develop new products

From Ambassador , Lambretta , a Bajaj or a Rajdoot toFrom Ambassador , Lambretta , a Bajaj or a Rajdoot tointroduction of Maruti 800 ccintroduction of Maruti 800 cc

Technological developments in packagimg and plasticTechnological developments in packagimg and plasticindustries like tetrapacks , pet bottles , cellophoneindustries like tetrapacks , pet bottles , cellophone

Containerised movement of goods , Deep freezers have affectedContainerised movement of goods , Deep freezers have affectedoperations of all firmsoperations of all firms

Perishable goods can be transported into safer mannerPerishable goods can be transported into safer manner

This has led to shortening of product life cycle e.g ElectronicsThis has led to shortening of product life cycle e.g Electronics Advance indicators of technological development are alsoAdvance indicators of technological development are also

available thru Journals and other industry trade Magazinesavailable thru Journals and other industry trade Magazines




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Figure 6-2: Virtual Reality Applications in Marketing

Virtual Reality technology lets users interact withcomputer-generated worlds through sight, sound,

and touch.


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PoliticalPolitical--Legal EnvironmentLegal Environment It consists of theIt consists of thesystem of Govt. , Laws of land , Govt. agencies on publicsystem of Govt. , Laws of land , Govt. agencies on publicand consumer protectionand consumer protection

India is a Union state and it is a socialistic democraticIndia is a Union state and it is a socialistic democratic

republicrepublic as a democratic country , it has a multi partyas a democratic country , it has a multi partypolitical systempolitical system

The businesses of the Govt. of India are transacted thruThe businesses of the Govt. of India are transacted thruits various ministries and departments like ministry ofits various ministries and departments like ministry ofCommerce , Consumer affairs , Food and PublicCommerce , Consumer affairs , Food and PublicDistribution , Company affairs , Environment ,Distribution , Company affairs , Environment ,Consumer affairs , Food and Public Dist. And HealthConsumer affairs , Food and Public Dist. And Healthand Family Welfareand Family Welfare

Their Decisions and actions may affect FirmsTheir Decisions and actions may affect Firms

Marketing planMarketing plan

Identifying and Responding to the Major

Macroenvironment Forces


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Political-Legal Environment

e.g. the Govt of Tamil Naidu has banned smoking ande.g. the Govt of Tamil Naidu has banned smoking and

sale of tobacco related products in public places by asale of tobacco related products in public places by anotification under the prevention ofFood Adulterationnotification under the prevention ofFood Adulterationact 1954act 1954

Indian food needs special approval to launch brandsIndian food needs special approval to launch brandsthat duplicate what already exists.that duplicate what already exists.

CocaCoca--Cola was made tl leave India in 1977 , 1993 it wasCola was made tl leave India in 1977 , 1993 it wasallowed to come backallowed to come back

Political organizations and its Ideology have lot to doPolitical organizations and its Ideology have lot to dowith creating uncertainty for Businessmanwith creating uncertainty for Businessman thetheincident US slapped sanctions to NGOs and politicalincident US slapped sanctions to NGOs and politicalparties call for crushing Cocaparties call for crushing Coca--Cola and Pepsi bottlesCola and Pepsi bottles

Legal provisions and court cases put a lot of pressureLegal provisions and court cases put a lot of pressureon marketers . For instance , in 1992 several tannerieson marketers . For instance , in 1992 several tanneriesin Kanpur were closed down by supreme court ordersin Kanpur were closed down by supreme court ordersas they were polluting the Ganges , Close of ironas they were polluting the Ganges , Close of ironfoundries around the Taj mahalfoundries around the Taj mahal


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SocialSocial--CulturalCultural

EnvironmentEnvironment Culture is learned values ,Culture is learned values ,

beliefs and values , customs and traditions etc,beliefs and values , customs and traditions etc,

which serves and regulate the behavior ofwhich serves and regulate the behavior of

societysociety




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Flexibility in both in social values and cultural lifeFlexibility in both in social values and cultural life

Indians have become more materialistic and desire a highIndians have become more materialistic and desire a highstandard of living . They are conscious of health andstandard of living . They are conscious of health andeconomic security , Borrowing is acceptedeconomic security , Borrowing is accepted

Credit has lost its social stigma and many Indians haveCredit has lost its social stigma and many Indians havecredit cardscredit cards

Health conscious with Diet foods in Demand e.g AtkinsHealth conscious with Diet foods in Demand e.g Atkins

Role of women has changes led to concept of one stopRole of women has changes led to concept of one stopshoppingshopping

Firms that operate their businesses in more than oneFirms that operate their businesses in more than onecountry must understand the sociocultural differences thatcountry must understand the sociocultural differences thatexist between different countries and plan accordinglyexist between different countries and plan accordingly

Norway does not allow sales promotionNorway does not allow sales promotion




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Figure 6-1: Colgate-

Palmolives Total

Global Branding

Strategy

Colgate-Palmolive has

had global success

with its Colgate lineof tooth-care products.

The products and their

packaging design do

not vary from country

to country; the only

thing that changes is

the language on the

packages.


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Marketing Plan

Executive summary and table of contentsExecutive summary and table of contents::-- it shouldit shouldopen with brief summary of main goals andopen with brief summary of main goals and

recommendationsrecommendations

Current market situationCurrent market situation::--This section presentsThis section presents

relevant data on sales , costs , profits , the market,relevant data on sales , costs , profits , the market,

competitors, channels and the forces incompetitors, channels and the forces in

macroeconomic environment (SWOT Analysis)macroeconomic environment (SWOT Analysis)

Opportunities and issue analysisOpportunities and issue analysis ::-- here review thehere review themajor opportunities found in the SWOT Analysismajor opportunities found in the SWOT Analysis

and identifies key issues likely to effectand identifies key issues likely to effect

organizations attainment of its objectivesorganizations attainment of its objectives


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Marketing Plan

ObjectivesObjectives ::-- Product manager outlines the plansProduct manager outlines the plans

major financial and marketing goals, expressed inmajor financial and marketing goals, expressed in

sales volume ,market share, profit and othersales volume ,market share, profit and other

relevant termsrelevant terms Marketing strategyMarketing strategy ::-- Target market segment ,Target market segment ,

positioning . All this is done with inputs from otherpositioning . All this is done with inputs from other

organizational areas such as purchasing ,organizational areas such as purchasing ,

manufacturing , sales , finance and humanmanufacturing , sales , finance and humanresource, to ensure that company can provideresource, to ensure that company can provide

proper support for effective implementation.proper support for effective implementation.


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Marketing Plan

Action Programs :Action Programs :-- What will be done ?What will be done ?

When will it be done ? , Who will do it ? ,When will it be done ? , Who will do it ? ,

How much will it cost ? , How will progressHow much will it cost ? , How will progressbe measuredbe measured

Financial projectionsFinancial projections ::--forecasted budget,forecasted budget,

expected costs , difference in revenue andexpected costs , difference in revenue and

sales is projected profitsales is projected profit

Implementation controlsImplementation controls ::--monitoring andmonitoring and

adjusting implementation of planadjusting implementation of plan

marketing environmrnt

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