Marketing Environment

1
2
3
4
5
6
 MARKETING ENVIRONMENT

The actors and forces outside marketing that

affect marketing management’s ability to build
and maintain successful relationships with target
customers.
Marketing environment includes those forces,
which are external in nature and cannot be
controlled or manipulated by the marketer
when and wherever required.

7
 Features of Marketing Environment
• Complexity
• Uncontrollable
• Changeable in nature
• Create constraint and threats
• Strong source of opportunities
• Multi Faceted

8
9
Trends of marketing environment
• Booming global economy
• Increasing power of dollar
• Increasing pressure of open economy and
globalization
• Increased competition
• Increased political unrest
• Increasing role of women in society and politics
• Advent of new technology and ICT
10
https://www.youtube.com/watch?v=vOX0XrxY
qpc

https://youtu.be/wJukf4ifuKs

https://youtu.be/8QDlv8kfwIM

11
 THE COMPANY’S
MICROENVIRONMENT
Microenvironment can be defined
as “ the actors close to the
company that affect its ability to
serve its customers – the company,
suppliers, marketing
intermediaries, customer markets,
competitors and publics.
12
THE COMPANY’S MICROENVIRONMENT

Company

Customers Suppliers

Micro
environment

Publics Intermediaries

Competitors

13
 THE COMPANY’S MICROENVIRONMENT
The SIX (6) elements of a company’s microenvironment:

1. The Company
- In designing marketing plans, marketing management takes other
company group into account.
- They are top management, finance, R&D, purchasing, operation and
accounting.
- All of these interrelated groups from the internal environment.
- Top management sets the company’s mission, objectives, broad
strategies and policies for the company.
- Then, marketing managers make decisions within the strategies and
plans made by top management.
- Marketing managers must work closely with other company’s
departments.
- All the department must works together in order to achieve the
company objective – to provide superior customer value & relationships.
14
 THE COMPANY’S MICROENVIRONMENT

2. Suppliers
- Suppliers provide the resources needed in
producing goods and services.
- Marketing managers must watch supply
availability and costs.
- Supply shortages or delays, will seriously
affect marketing.
- Most marketers nowadays treat their
suppliers as partners in creating & delivering
customer value. 15
 THE COMPANY’S MICROENVIRONMENT
3. Marketing Intermediaries
- Intermediaries are firms that help the company
to promote, sell and distribute its goods to final
buyers.
- They include:
a) Resellers
- They are distribution channel firms that help
the company find customers & make sales to
them.
- These include wholesalers and retailers who
buy and resell merchandise.
16
 THE COMPANY’S MICROENVIRONMENT
b) Physical Distribution Firms
- Help the company to stock and move
goods from their points of origin to their
destinations.
- E.g. warehouses.
c) Marketing Services Agencies
- Marketing research firms, advertising
agencies, media firms & marketing
consulting firms that help the company
target & promote its products to the
right markets. 17
 THE COMPANY’S MICROENVIRONMENT

d) Financial Intermediaries
- Financial intermediaries are
institutions such as bank, credit
companies and insurance
companies.
- These institutions helps finance
transactions or insure against the
risks associated with the buying
and selling of goods.
18
 THE COMPANY’S MICROENVIRONMENT

4. Competitors
- Competitors are companies with similar
offerings in the same marketplace.
- To be successful, a company must provide
greater customer value and satisfaction
than its competitors do.
- Company must gain strategic advantage by
positioning their offerings strongly against
competitors’ offerings in the minds of
consumers.
19
 THE COMPANY’S MICROENVIRONMENT
5. Publics
- Public is any group that has an actual or potential
interest in or impact in an organization’s ability to
achieve its objectives.
a) Financial public
- Influence the company’s ability to obtain fund.
- E.g. banks, investment houses.
b) Government public
- Affect the company by passing legislations and
laws that put restriction on the company’s actions.

20
 THE COMPANY’S MICROENVIRONMENT
c) Media public
- This group carries news, feature and editorial opinion that may
influence customers’ opinion towards the business.
- E.g. Newspapers, magazines and television station

d) Citizen-action public
- Include environmental group and minority group that can
questioned the actions of the company and put them in the
public spotlight.
- E.g. Consumer organizations.

e) Local public
- neighborhood and community organizations that will question
a company impact on the local area and the level of
responsibility of their action.
21
 THE COMPANY’S MICROENVIRONMENT

f) General public
- Can greatly affect the company as any changes in their attitude
will affect the company.
- Its consists population at large

g) Internal public
- Consists of those who employed within the organization and
deal with the organization and construction of the company’s
product.
- When employees feel good about their company, this positive
attitude spills over to external public.

22
 THE COMPANY’S MICROENVIRONMENT

6. Customers
- Customers are the most important factor in the
microenvironment because they made up markets.
- There are FIVE (5) types of customer market:

a) Consumer markets
- Consist of individuals and households that buy goods and
services for personal consumption
- e.g. End user

b) Business markets
- Buy goods and services for further processing to produce
their own product
- Restaurants, tailors, etc.
23
 THE COMPANY’S MICROENVIRONMENT

c) Reseller markets
- buys goods and services to resell at a profit.
- E.g. wholesalers, retailers, etc.

d) Government markets
- Consists of government agencies that buy goods to
produce public goods or transfer the goods and services
to others who need them
- E.g. hospitals, bus-stops, etc.

e) International market
- Buyers in other countries, including consumers,
producers, resellers & governments.
24
Part 1: Logo
Identification
Standard Chartered Bank
NIC Asia Bank
HIMALAYAN JAVA COFFEE
JEEVAN BIGYAN
NABIL BANK
NEPAL MEDICITI
Grande International Hospital
HONDA
PARKER
World Wildlife Fund
FOSSIL
Vodafone
ADIDAS
Balaji Telefilms
Starbucks
Shell Lubricants
Rolex Watch
Microsoft
The National Lottery
Kathmandu Guest House
Tommy Hilfiger
Barclays
 THE COMPANY’S MACROENVIRONMENT

Macroenvironment is “a larger
societal forces that affect the
microenvironment – demographic,
economic, natural, technological,
political and cultural forces.

55
THE COMPANY’S MACROENVIRONMENT

Demographic

Cultural Economic

Political Natural

Technological
56
 THE COMPANY’S MACROENVIRONMENT
1. Demographic Environment
- The study of human populations in terms of
size, density, location, age, gender, income,
occupation and other statistics.
- Demographic is one of the most important
elements in marketing macro-environments
because it involves people and people make-
up markets.
- Marketers will depend on this factors to
produce or improve the products as these
factors will influence the buying behaviors 57
58
59
60
61
 THE COMPANY’S MACROENVIRONMENT
2. Economic Environment
- Factors that affect consumer buying power and
spending patters.
- Changing in income poses influences on how
consumers spend their money.
- E.g.if consumer’s income increases, they will buy
luxurious goods more, spending on convenience
products will decrease at the same time.
- Changing in consumer spending pattern also
influences on how consumers spends their money.
- E.g. With the increase awareness on healthy living,
consumers tend to spend more on health products
and services than other things. 62
63
 Hermes Sells $2.7m Luxury Goods in One
Day as China Lifts Lockdown
Apr 15, 2020
• As lockdowns are lifted in China, signs of a retail resurrection in the luxury sector are
starting to show.
• Starting in Wuhan, the original epicenter of the COVID-19 outbreak,
lockdown procedures have been gradually lifting, and being re-
activated, across China from April 8.
• In the mainland hubs and cities, activity is slowly returning to stores, as one flagship of
the Hermes brand in Guangzhou has reported 19 million renminbi ($2.7 million) in
sales on Saturday 11 April, according to WWD.
• Elsewhere in China, malls and shopping centers in Shanghai are welcoming footfall at
30 percent of their pre-Coronavirus activity as shoppers slowly returned to stores,
according to emarketer. A positive return in a matter of a week given retail faced a 20
percent decline from January to February in year-on-year sales during the lockdown.
• With terms like “revenge buying” and global reports surrounding a shifting focus on
luxury buying for the China market to health, wellness and experience, this is no doubt
an isolated return to normality that could expand once spending returns to China.
64
 THE COMPANY’S MACROENVIRONMENT

3. Natural Environment
- Natural resources are the elements that are needed as input
by the marketers or the elements that are affected by
marketing activities.
- Marketers should be aware of several trends in the natural
environment.
- The trends are:

a) Shortages of mineral
- Shortages of mineral resources will affect the prices of
the products.
- E.g. shortages of oil will increase its price and demand for
motor vehicles may drop as well
65
 THE COMPANY’S MACROENVIRONMENT

b) Increased pollution
- Government will intervene if the production activities
endangered the environment.
- Example, government promotes no plastics bags days
because plastic is known as a non-biodegradable material
which can be hardly be disposed.

c) Increased government intervention

- Happens in natural resource management.
- E.g. Limiting logging activities may reduce timber supply.

66
https://youtu.be/6d-c5ofOjMY
https://youtu.be/xbALLrBYqjI

67
 THE COMPANY’S MACROENVIRONMENT

4. Technological Environment
- Forces that create new technologies , creating new product
and market opportunities.
- The R&D used in production activities can be considered as
one of the technological effort as the process will improvise
the product.
- Technology may help a company to increase its productivity,
thus company should pay a close attention to the technology
as this elements will help them to flourish.
- If a business doesn’t pay a close attention to technology, they
may be left behind.

68
 THE COMPANY’S MACROENVIRONMENT

5. Political & Environment

- Includes laws, government agencies & pressure groups that
influence and limit various organizations & individuals in a
given society.
- Marketers should be aware of the law and legislation
imposed by the government, agencies and regulating bodies.
- This element could give good or bad influences to the
marketers.
- E.g. Government imposes the usage of helmets. This
regularity increased the demand for helmets.

69
 THE COMPANY’S MACROENVIRONMENT

6. Cultural Environment
- Institutions & other forces that affect society’s basic values,
perceptions, preferences, and behaviors.
- Marketers should be aware with the cultural values of their
target market.
- Some persistent values like core values cannot be changed
while secondary can be changed.
- Core beliefs are passed on from parents to children. E.g.
everyone should get married.
- Secondary beliefs are more open to changes. E.g. everyone
should get married in early age tend to change nowadays,
people are no longer engaged in marriage at younger age.

70
 COMPANY’S REACTIONS TOWARDS MARKETING
ENVIRONMENT
Company/organizations react to marketing environment in two
ways:

1) Proactive approach
2) Reactive approach

71
 COMPANY’S REACTIONS TOWARDS MARKETING
ENVIRONMENT

Proactive approach

- Company takes aggressive actions to affects the publics and

forces in their marketing environment.
- Such companies even hire lobbyist to influence legislation
affecting their industries & stage media events to gain
favorable press coverage.
- Example would be Air Asia operates as low cost carrier even
though there s economic downturn.

72
 COMPANY’S REACTIONS TOWARDS MARKETING
ENVIRONMENT

Reactive approach

- Companies that view the marketing environment as

uncontrollable elements to which they must react and adapt.
- They passively accept the marketing environment and do not
try to change it.
- They analyze the forces and design the strategies to avoid
the threats and taking the advantages of the opportunities
the environment provides.

73
 Marketing Environment in Nepal
These variables and change in them provide
both opportunities and threats to the
marketing firm.
• Economic environment
• Demographic environment
• Socio-cultural environment
• Political-legal environment
• Technological environment
• Natural environment
• Competitive environment