2

Marketing
Environment

Prof Anuj Bhatt

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 The Marketing Environment

Marketing Environment

The actors and forces outside marketing that affect

marketing management’s ability to build and maintain
successful relationships with target customers

Microenvironment
Includes the actors close to the company

Macroenvironment
Involves larger societal forces
 Microenvironment

Actors  Marketing must consider

other parts of the
1. The company organization including
2. Suppliers finance, R&D,
purchasing, operations
3. Marketing
and accounting
intermediaries
4. Customers
 Marketing decisions
5. Competitors must relate to broader
6. Publics company goals and
strategies
 Microenvironment

Actors
 Marketers must watch
1. The company supply availability and
pricing
2. Suppliers
3. Marketing
intermediaries  Effective partnership
relationship
4. Customers
management with
5. Competitors suppliers is essential..…
6. Publics
 Microenvironment

Actors  Help to promote, sell and

distribute goods to final
buyers
1. The company  Include resellers, physical
2. Suppliers distribution firms, marketing
3. Marketing services agencies and
intermediaries financial
intermediaries..arshiya
4. Customers
 Effective partner relationship
5. Competitors management is essential
6. Publics
 Microenvironment

Actors
The five types of customer
1. The company markets
2. Suppliers  Consumer
3. Marketing  Business
intermediaries  Reseller
4. Customers  Government
5. Competitors  International
6. Publics
 Microenvironment

Actors  Conducting competitor

analysis is critical for
1. The company success of the firm..Jio..
2. Suppliers
3. Marketing  A marketer must
intermediaries monitor its
4. Customers competitors’ offerings
5. Competitors to create strategic
advantage
6. Publics
 Microenvironment

Actors A group that has an actual

or potential interest in or
1. The company impact on an
organization..Maggi
2. Suppliers
3. Marketing Publics include:
intermediaries  Media
4. Customers  Government
5. Competitors  Citizen-action
6. Publics  Internal
 Macro Environment Forces

Demographic

Political-legal Economic

Technological Socio-cultural

Natural
 Demographic Environment

Demographic Environment:

The study of human populations in

terms of size, density, location,
age, gender, race, occupation
and other statistics
 Demographic Environment

Changing age structure of the population is the single most

important demographic trend
 Natural Environment
Natural Environment
Weather, Climate Changes, Natural Resources
Involves the natural resources that are needed as inputs by
marketers or that are affected by marketing activities

Very important for Oil & Gas Industries.., Automobile Industry …etc

Trends
Shortages of raw materials., increased pollution..petrol..innovative
resources…
Increased Corporate Social Responsibility, Sustainability
Natural Environment
 Economic Environment

 Factors that affect consumer purchasing power and

spending patterns….. Consumer psychology

 Changing Income Distribution. Variations in

geographical income distribution…country to
country…

 Patterns of economic Growth- BRICA, Mexico,

Taiwan, Turkey, South Korea, Poland, Saudi Arabia
 Economic Environment

 The Economic forces relate to factors that affect consumer

purchasing power and spending patterns

For instance, a company should never start exporting to

a country before having examined how much people
will be able to spend.

Important criteria viz analysing economic environment

are:
Economic Growth of the country, GDP, Duties and
Taxations , Unemployment, Exchange Rate, Inflation,
Disposable personal income of consumers and their
Spending patterns
 Sociocultural Environment

Made up of institutions and other forces that affect a

society’s basic values, perceptions, preferences and
behaviors.

 Views of themselves
 Views of others Core beliefs: Hard to
change
 Views of organizations
Secondary beliefs:
 Views of society Easier to change
 Views of nature Existence of
 Views of the universe subcultures
 Socio Cultural Forces…..

Socially Responsible Marketing -Business firms should take

lead in eliminating socially harmful products.

Socio Cultural Forces refers to Attitudes, Beliefs, Values,

Norms & Lifestyles of individuals.

These forces change market dynamics & marketers face

both Challenges & Opportunities.

Example: With both Husband & Wife working, the market

for Ready-to-Eat food & Readymade garments
 Technological Environment

 The most dramatic force affecting our lives and

businesses today. Very high degrees of technological
awareness.
 Accelerating Pace of change. Creates many new
marketing opportunities but also turns many existing
products extinct
 Opportunities for innovation
 Varying R&D budgets
 Political & Legal Environment

Consists of laws, government agencies and pressure groups that

influence or limit various organizations and individuals in a
given society…

Govt Policies, Political Stability, Corruption, Foreign Trade, Tax

Policies
 Increasing Legislations-Legislation affecting businesses
worldwide has increased

 Increased emphasis on socially responsible actions.

Growth of special interest groups/pressure groups
 Political Forces…

Government Policies shape the economic conditions of the

country

They impact the marketing decisions and policies of a firm.

Marketers view Political Environment as “unstable” & try

to adjust to the environment.
 Political Forces….
Every business is limited by the political environment. This involves laws,
government agencies and pressure groups. These influence and restrict
organisations and individuals in a society. Therefore, marketing decisions are
strongly influenced and affected by developments in the political
environment.

Before entering a new market in a foreign country, the company should

know everything about the legal and political environment. How will the
legislation affect the business? What rules does it need to obey? What laws
may limit the company’s ability to be successful? For example, laws covering
issues such as environmental protection, product safety regulations,
competition, pricing etc. might require the firm to adapt certain aspects and
strategies to the new market
 Cause-Related Marketing

 Marketers create link between

brand and charitable
organization
 Demonstrates social
responsibility…Tata’s Jago Re
Campaigns, P&G’s Shiksha
 Helps build positive brand image
 Responding to the
Marketing Environment

“There are three kinds of companies: those who make

things happen, those who watch things happen, and
those who wonder what’s happened.”
 Monsoon Case

The monsoon position in the country has been a cause of worry for
many businesses in India, FMCG’s in particular. Once clear hints
became available about the unsatisfactory position, the FMCG’s
started making emergency plans to stop any decline in sales
volume in case of deficit rainfall which might hit crop yields,
escalate food prices and impact consumer spend.
 
 Monsoon Case

In such a situation even if monsoon revived subsequently, crop

yields may still be lower due to uneven rainfall. Food prices
may rise sharply. A weak monsoon will naturally reflect on
costs and the company will have to work around that.
 
FMCG firms like Hindustan lever, Dabur and Britannia which
have a large rural presence could be hurt more than nestle or
Glaxo Smithkline Consumer Products which have an urban
focus on their products.
 Monsoon Case -Question

From the above case, describe the importance of

macroenvironment factors on marketing with special
emphasis for FMCG products. What all can FMCG
companies do to keep the sales volumes from falling
in the rural areas.