The Marketing Environment
The Marketing Environment
The Marketing Environment
• 1ntroduction
• Analyzing the Organization’s Micro Environment
• Company’s Macro Environment
• Differences between Micro and Macro Environment
• Environmental Scanning
• Techniques of Environment Scanning
LEARNING OBJECTIVES
• To describe the environmental forces that affect the company’s ability to serve
its customers
• To explain how changes in the demographic and economic environments affect
marketing decisions
• Identify the major trends in the firms' natural and technological environments
• To explain the key changes in the political and cultural environments
• To discuss how companies can react to the marketing environment
INTRODUCTION
The micro environment consists of the actors close to the company that
affect its ability to serve its customers, the company, suppliers,
marketing intermediaries, customer markets, competitors, and
publics.
THE MARKETING ENVIRONMENT
• The company
• Suppliers
• Marketing intermediaries
• Customers
• Competitors
• Publics
THE COMPANY’S MICROENVIRONMENT
THE COMPANY
• Company organization consists of Board of Directors and
functional managers.
• Marketing plans are drawn up as per the philosophy of Top
Management.
• Marketing decisions like new products, expansion, etc depend on
the support of top management. It depends upon finance,
managerial skills, organization’s strengths and weaknesses.
THE COMPANY’S MICROENVIRONMENT
THE COMPANY
SUPPLIERS
• Provide the resources to produce
goods and services
• Important link in the “value delivery
system”
• Treated as partners to provide
customer value
• Marketers must watch supply
availability and pricing.
THE COMPANY’S MICROENVIRONMENT
MARKETING INTERMEDIARIES
• Help the company to promote, sell, and distribute its products to
final buyers
• Include:
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
THE COMPANY’S MICROENVIRONMENT
MARKETING INTERMEDIARIES
• Resellers are the distribution channel firms
that help the company find customers or
make sales to them. These include:
• Wholesalers
• Retailers
• Physical distribution firms are the
distribution channel firms that help the
company to stock and move goods from
their points of origin to their final
destination.
THE COMPANY’S MICROENVIRONMENT
MARKETING INTERMEDIARIES
• Marketing service agencies are the
marketing research firms, advertising agencies,
media firms, and marketing consulting firms that
help the company target and promote its
products to the right markets.
• Financial intermediaries include banks,
credit companies, insurance companies, and
other businesses that help finance transactions
or insure against the risks associated with the
buying and selling of goods.
THE COMPANY’S MICROENVIRONMENT
CUSTOMERS
• Customer markets consist of
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.
THE COMPANY’S MICROENVIRONMENT
COMPETITORS
• Firms must gain strategic advantage
by positioning their offerings against
competitors’ offerings.
• Each firm should consider its own
size and industry position
compared to those of its
competitors.
THE COMPANY’S MICROENVIRONMENT
COMPETITORS
• To be successful, a company must satisfy
needs and wants of consumers better
than competitors.
• A company should monitor three
variables when analyzing each of its
competitors
1. Share of market
2. Share of Mind
3. Share of Heart
THE COMPANY’S MICROENVIRONMENT
PUBLICS
• Citizen-action publics include
consumer organizations, environment
groups, and minority groups
• Local publics include neighborhood
residents and community organizations
• General publics influence the company’s
public image
• Internal publics include workers,
managers, volunteers, and directors
THE COMPANY’S MACROENVIRONMENT
• Demographic environment
• Economic environment
• Natural environment
• Technological environment
• Political environment
• Cultural environment
THE COMPANY’S MACROENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
• Demography is the study of human populations in terms of size,
density, location, age, gender, race, occupation, and other statistics.
• Demographic environment is important because it involves
people, and people make up markets. This is a major interest to
marketers.
• Demographic trends include age, family structure, geographic
population shifts, educational characteristics, and population
diversity.
THE COMPANY’S MACROENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
Geographic Shifts in Population
Trends include:
• Migratory movements between and within countries
• Moving from rural to metropolitan areas
• Changes in where people work
• Telecommuting
• Home office
• Divorce or separation
THE COMPANY’S MACROENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
DEMOGRAPHIC ENVIRONMENT
Increasing Diversity
• Markets are becoming more diverse:
• International
• National
• Trends include
• Ethnicity
• LGBTQ+
• Disabled
THE COMPANY’S MACROENVIRONMENT
ECONOMIC ENVIRONMENT
ECONOMIC ENVIRONMENT
Changes in Income
• Value marketing involves ways to offer financially cautious buyers' greater value—
the right combination of quality and service at a fair price.
• Income distribution
• Upper-class consumers
• Middle-class consumes
• Working-class consumers
• Underclass consumers
THE COMPANY’S MACROENVIRONMENT
ECONOMIC ENVIRONMENT
NATURAL ENVIRONMENT
TECHNOLOGICAL ENVIRONMENT
• Most dramatic force in changing the marketplace with many positive and negative
effects
• Rapid change
• Provides new markets and new opportunities
• Internet
• Medicine
• Miniaturization
• Weapons
• Credit cards
• Communication
THE COMPANY’S MACROENVIRONMENT
TECHNOLOGICAL ENVIRONMENT
• Forces that create new technologies, create new product
and market opportunities.
• Technological innovation
• Role of research and development
THE COMPANY’S MACROENVIRONMENT
POLITICAL ENVIRONMENT
POLITICAL ENVIRONMENT
POLITICAL ENVIRONMENT
CULTURAL ENVIRONMENT
CULTURAL ENVIRONMENT
CULTURAL ENVIRONMENT
CULTURAL ENVIRONMENT
CULTURAL ENVIRONMENT
CULTURAL ENVIRONMENT
CULTURAL ENVIRONMENT
Conclusion
Microenvironment and macro environment, both
cover the overall environment of business. So, they
are more complementary rather than contradictory.
The study of these environments will help to know
the strength, weakness, opportunity and threat of
business.
ENVIRONMENTAL SCANNING
6. Intuitive reasoning:
Rational and unbiased intuition is used for environmental scanning. Environmental
dynamics are guessed individual judgement. Reliability of this method is questionable.
TECHNIQUES/ METHOD OF
ENVIRONMENTAL SCANNING
8. Cross-impact matrix:
Environmental forecasts through various methods are combined to form and
integrated and consistent description of future. Cross impact matrix is used to assess
the internal consistency of the forecasts.
IMPORTANCE OF ENVIRONMENTAL
SCANNING
• Signals threats: It provides an early signal of threats, which can be defused or minimized if
recognized well in advance.
• Customer needs: It signals an organization to the changing needs and requirements of the
customers.
• Capitalize opportunities: It helps an organization capitalize opportunities earlier than the
competitors.
• Qualitative information: It provides a base of objective qualitative information about the
environment that can be utilized for strategic management.
• Intellectual simulation: It provides intellectual stimulation to managers in their decision
making.
• Image: It improves the image of the organization as being sensitive and responsive to its
environment.
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