module 2 environment

ENVIRONMEENVIRONMENTNT

ENVIRONMENT AND ENVIRONMENT AND YOUYOU

BUSINESSBUSINESSGoal Oriented EntityGoal Oriented EntityEconomic Performance Economic Performance ProfitabilityProfitabilitySocial PerformanceSocial PerformanceSatisfaction of all interested parties Satisfaction of all interested parties

The Dynamic Marketing EnvironmentThe Dynamic Marketing Environment

MARKETING MARKETING ENVIRONMENTENVIRONMENT

BUSINESSBUSINESS DynamicDynamic StrategyStrategy Continuous Continuous

monitoringmonitoring Evaluating Evaluating

StrategyStrategy RedesignRedesign

ENVIRONMENTENVIRONMENT DynamicDynamic ComplexComplex Business can’t act Business can’t act

as a closed systemas a closed system Internal Factors Internal Factors

& External & External FactorsFactors

Elements of a Modern Elements of a Modern Marketing SystemMarketing System

Marketing presents a Marketing presents a never ending series of never ending series of threats and opportunitiesthreats and opportunities

The Marketing Manager major The Marketing Manager major task is that of trend trackers task is that of trend trackers and opportunity seekersand opportunity seekers- - Changes in Computer Changes in Computer Hardware/SoftwareHardware/Software

- Changes in Consumer Durables- Changes in Consumer Durables - Car Industry etc.- Car Industry etc.

A Marketer has to design A Marketer has to design their marketing strategy their marketing strategy based on the current based on the current marketing environmentmarketing environment

ENVIRONMENTAL SCANNINGENVIRONMENTAL SCANNING Environmental analysisEnvironmental analysis Extensive insight Extensive insight Current market conditionsCurrent market conditions Impact of external factors that Impact of external factors that

are uncontrollable by the are uncontrollable by the marketersmarketers

Nature of Marketing Nature of Marketing EnvironmentEnvironment

All the actors and forces influencing the All the actors and forces influencing the company’s ability to transact business company’s ability to transact business effectively with it’s target market.effectively with it’s target market.

Includes:Includes: Micro environment - forces close to the Micro environment - forces close to the

company that affect its ability to serve its company that affect its ability to serve its customers.customers.

Macro environment - larger societal Macro environment - larger societal forces that affect the whole forces that affect the whole microenvironment.microenvironment.

The Marketing The Marketing EnvironmentEnvironment

Company

Demographic

Economic

Natural

Technological

Political

Cultural Company

Customers

Intermediaries

Suppliers

Competitors

Publics

The Microenvironment

Company

Customers

Publics Suppliers

Competitors Intermediaries

Forces Affecting a Company’s Ability to

ServeCustomers

The Microenvironment The Microenvironment Company’s Internal EnvironmentCompany’s Internal Environment- functional areas such as top management, finance, and manufacturing, etc.

SuppliersSuppliers - provide the resources needed to produce goods and services.

Marketing IntermediariesMarketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.

CustomersCustomers - types of markets that - types of markets that purchase a company’s goods and purchase a company’s goods and services.services.

CompetitorsCompetitors - those who serve a target - those who serve a target market with similar products and market with similar products and services.services.

PublicsPublics - any group that perceives itself - any group that perceives itself having an interest in a company’s ability having an interest in a company’s ability to achieve its objectives.to achieve its objectives.

The MacroenvironmentThe MacroenvironmentDemographic

Technological

Cultural Economic

Political Natural

Forces that ShapeOpportunities

and Pose Threatsto a Company

DemographicDemographic - monitors population in - monitors population in terms of age, sex, race, occupation, terms of age, sex, race, occupation, location and other statistics.location and other statistics.

EconomicEconomic - factors that affect consumer - factors that affect consumer buying power and patterns.buying power and patterns.

NaturalNatural - natural resources needed as - natural resources needed as inputs by marketers or that are affected inputs by marketers or that are affected by marketing activities.by marketing activities.

Technological Technological - forces that create new - forces that create new product and market opportunities.product and market opportunities.

PoliticalPolitical - laws, agencies and groups - laws, agencies and groups that influence or limit marketing that influence or limit marketing actions.actions.

Cultural Cultural - forces that affect a society’s - forces that affect a society’s basic values, perceptions, preferences, basic values, perceptions, preferences, and behaviors.and behaviors.

The MacroenvironmentThe Macroenvironment Demographic EnvironmentDemographic Environment

Size of the populationSize of the population Its geographic distributionIts geographic distribution DensityDensity Mobility trendsMobility trends Age DistributionAge Distribution BirthBirth MarriagesMarriages

The MacroenvironmentThe Macroenvironment

Key Demographic TrendsKey Demographic TrendsChanging householdChanging householdGeographic population shiftsGeographic population shiftsBetter-educated, more Better-educated, more

private workforceprivate workforce Increasing DiversityIncreasing Diversity

India’s Demographic Time India’s Demographic Time BombBombEvery minute birth of 54 babiesEvery minute birth of 54 babiesEvery week a population of Every week a population of Chandigarh is addedChandigarh is added

Every eighth month one Every eighth month one Australia is addedAustralia is added

The teenagers Market and working The teenagers Market and working women’s market have created women’s market have created enormous marketing opportunities enormous marketing opportunities in Indiain India

Examples: Mobile Phones, Examples: Mobile Phones, Twowheelers, Cosmetics, Fast Food, Twowheelers, Cosmetics, Fast Food, Ready to Eat & ElectronicsReady to Eat & Electronics

The MacroenvironmentThe Macroenvironment The Economic Environment The Economic Environment

Consists of factors that affect consumer Consists of factors that affect consumer purchasing power and spending patternspurchasing power and spending patterns

Total buying power is a function of current Total buying power is a function of current income, prices, savings, and credit income, prices, savings, and credit availabilityavailability

The monetary policy changes, prevailing The monetary policy changes, prevailing interest rates, business cycles, changes in interest rates, business cycles, changes in income levelsincome levels

Marketers should be aware of four Marketers should be aware of four main trends in the economic main trends in the economic environment:environment: Slowdown in real income growthSlowdown in real income growth Continued Inflationary pressureContinued Inflationary pressure Low savingsLow savings Changing Consumer Expenditure Changing Consumer Expenditure

PatternPattern


The Natural EnvironmentThe Natural Environment Concern for the natural environment Concern for the natural environment

has grown steadily, increasing the has grown steadily, increasing the importance of these trends:importance of these trends: Shortage of raw materialsShortage of raw materials Increased pollutionIncreased pollution Increased governmental Increased governmental

interventionintervention


Key Technological Trends Key Technological Trends The technological environment is The technological environment is

characterized by rapid change.characterized by rapid change. New technologies create new New technologies create new

opportunities and markets but opportunities and markets but make old technologies obsolete.make old technologies obsolete.

The U.S. leads the world in The U.S. leads the world in research and development research and development spending.spending.


The Political EnvironmentThe Political Environment Includes laws, governmental agencies, and Includes laws, governmental agencies, and

pressure groups that impact organizations and pressure groups that impact organizations and individuals. Key trends include:individuals. Key trends include: Increased legislation to protect businesses Increased legislation to protect businesses

as well as consumers. as well as consumers. Changes in governmental agency Changes in governmental agency

enforcement.enforcement. Increased emphasis on ethical behavior and Increased emphasis on ethical behavior and

social responsibility. social responsibility.

The MacroenvironmentThe Macroenvironment The Cultural EnvironmentThe Cultural Environment

Is composed of institutions and other Is composed of institutions and other forces that affect a society’s basic forces that affect a society’s basic values, perceptions, preferences, and values, perceptions, preferences, and behaviors.behaviors.

Culture can influence decision making.Culture can influence decision making. Core beliefs are persistent; secondary Core beliefs are persistent; secondary

cultural values change and shift more cultural values change and shift more easily.easily.

The cultural values of a society are The cultural values of a society are expressed through people’s views.expressed through people’s views.

Cultural values are expressed Cultural values are expressed via how people view:via how people view:


ThemselvesThemselves OthersOthers OrganizationsOrganizations

SocietySociety NatureNature The UniverseThe Universe

Responding to the Responding to the Marketing EnvironmentMarketing Environment Reactive: Passive Acceptance and Reactive: Passive Acceptance and

Adaptation Adaptation Companies design strategies Companies design strategies

that avoid threats and that avoid threats and capitalize upon opportunities.capitalize upon opportunities.

Proactive: Environmental Proactive: Environmental ManagementManagement

Responding to the Responding to the Marketing EnvironmentMarketing Environment Environmental Management Environmental Management

Perspective Perspective – Taking aTaking a proactiveproactive approach to approach to managing the microenvironment managing the microenvironment and the macroenvironment to and the macroenvironment to affect changes that are affect changes that are favorable for the company. favorable for the company.

module 2 environment

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