Module 01 Chapter 02

Marketing Environment

Assistant Professor
Syamili Nair
Marketing environment
• The marketing environment refers
to all internal and external factors,
which directly or indirectly
influence the organization's
decisions related to marketing
activities.
• These factors can have a
significant impact on a company's
marketing strategies, decisions,
and overall success.
Types of Marketing
Environment
 Internal Environment

The internal environment refers to

• Organizational Culture
the factors and conditions within • Leadership and Management
an organization that directly affect •
its operations, culture, and Workforce
performance. These factors are • Organizational Structure
generally under the control of the •
organization's management and
Resources
leadership. • Processes and Operations
 The external environment consists of
factors and forces outside the
External organization that can significantly
Environm impact its performance and strategic
decisions. These factors are
ent: generally beyond the organization's
control but require careful analysis.
1. Microenvironment: The
microenvironment refers to the factors and
forces that operate closely around an
organization and directly affect its day-to-day
operations and interactions with
stakeholders. These factors are often
controllable to some extent and can be
influenced by the organization
• Customers
• Suppliers
• Competitors
• Intermediaries-distributors, wholesalers,
and retailer
2.Macro Environment:
The macroenvironment encompasses the broader
external factors and forces that are not within the
organization's control but can significantly impact its
overall performance and strategic decisions.
Economic Factors: Economic conditions like
inflation rates, interest rates, GDP growth, and
consumer spending patterns can affect consumer
purchasing power and demand for products and
services.
Socio-Cultural Factors: Demographic trends,
cultural values, social attitudes, and lifestyle choices
of the target market can influence market behavior
and preferences.
Technological Factors: Advances in technology,
innovations, and industry trends can create new
opportunities and disrupt existing markets and
business models.
• Political and Legal Factors:
Government regulations, laws,
trade policies, and political
stability can impact business
operations, trade, and market
entry strategies.
• Environmental and
Sustainability Factors:
Concerns about environmental
sustainability, climate change,
and ethical practices can
influence consumer behavior and
regulatory requirements.
 BASIS FOR
MICRO ENVIRONMENT MACRO ENVIRONMENT
COMPARISON

Meaning Micro environment is defined as Macro environment refers to the

the nearby environment, under general environment, that can affect
which the firm operates. the working of all business
enterprises.

COMPARISO Elements COSMIC, i.e. Competitors,

Organization itself, Suppliers,
PESTLE, i.e. Political, Economic,
Socio-cultural, Technological, Legal
N Market, Intermediaries and
Customers.
and Environmental.

Nature of Specific General

elements

Are these factors Yes, but to some extent only No

controllable?

Influence Directly and Regularly Indirectly and Distantly

Environmental Scanning
Environmental scanning is a process used by organizations to monitor their
external and internal environments.

For the identification of opportunities and threats affecting the business for
making strategic business decisions.

The organization collects information regarding its environment and analyzes it to

forecast the impact of changes in the environment.

This eventually helps the management team to make informed decisions.

Importance of Environmental
Scanning
Risk Opportunity Strategic
Management Identification Planning

Competitive Customer Resource

Advantage Satisfaction Allocation

Long-term
Sustainability
Techniques for Environmental
Scanning
SWOT
Analysis
• SWOT analysis is a
strategic planning
tool used by
organizations to
assess their internal
strengths and
weaknesses and
external
opportunities and
threats.
Strengths (S): These are the internal attributes,
resources, and capabilities that give an organization a
competitive advantage.
• Strong brand reputation
• Skilled and motivated workforce
• Advanced technology and infrastructure
• Efficient operational processes
• Financial stability and resources
• Efficient leadership
• Weaknesses (W): These are internal factors that hinder an
organization's performance and competitive positioning. Recognizing
weaknesses allows organizations to address and mitigate these issues

• Limited resources
• Outdated technology
• High employee turnover
• Inadequate marketing strategies
• Lack of diversified product offerings
• Inefficient supply chain management
• Poor Knowledge on Customer Trendz
• No Online Presence
• Opportunities (O)
Opportunities are external factors in the business
environment that can be beneficial the organization.
Identifying opportunities allows organizations to capitalize on
favorable trends and conditions.
• Emerging markets for expansion
• Changing consumer preferences
• Technological advancements that can improve operations
• Regulatory changes that favor the industry
• Growing demand for eco-friendly products
Threats (T): These are external factors that can potentially harm
an organization's performance or create challenges. Recognizing
threats helps organizations develop strategies to mitigate or
respond to these risks. Examples of threats might include:
• competitive pressures
• regulatory changes
• Natural Disasters
• Technological Disruptions: Rapid technological advancements can
disrupt traditional industries. For example, the rise of e-books and
digital media threatened traditional print publishing, forcing
publishers to adapt to digital platform
Benefits of Using SWOT
• Leverage Strengths: Use your strengths to your advantage. For
example, if you have a strong online presence, focus on digital
marketing strategies to reach a broader audience.
• Address Weaknesses: Work on improving areas of weakness. If
customer service is a weakness, invest in training and resources to
enhance customer support.
• Exploit Opportunities: Develop strategies to take advantage of
identified opportunities. If you notice a growing demand for eco-
friendly products, consider launching a sustainable product line.
• Mitigate Threats: Develop contingency plans to mitigate potential
threats. For instance, if a new competitor enters the market, you
might need to adjust your pricing or marketing strategies to remain
competitive.
 PESTEL ANALYSIS
• A PESTEL analysis or more recently
named PESTEL is a framework or tool
used by marketers to analyse and
monitor the macro-environmental
(external marketing environment)
factors that have an impact on an
organisation.
• it helps your organization
examine external factors that could
influence your organization’s
• Political Factors: These factors encompass the
influence of government policies, regulations, and
political stability. It includes areas such as taxation
policies, trade tariffs, government stability, and political
ideologies that can affect a company's operations.
• Economic Factors:. This includes factors like inflation
rates, exchange rates, economic growth or recession,
interest rates, and overall economic stability
• Social Factors:. It involves analyzing factors like
population demographics, lifestyle trends, consumer
attitudes and preferences, and societal values.
• Technological Factors: Technological factors focus on the impact of
technology on a business. This includes advancements in technology,
research and development (R&D) activity, innovation, and the pace of
technological change.
• Environmental Factors: Environmental factors relate to the impact of
environmental issues and sustainability on a business. This includes
concerns such as climate change, environmental regulations,
sustainability practices, and consumer attitudes towards
environmentally friendly products and services.
• Legal Factors: Legal factors involve the examination of laws and
regulations that can affect a business. This includes labor laws, health
and safety regulations, intellectual property laws, and industry-specific
regulations. Compliance with legal requirements is essential to avoid
potential legal issues and liabilities.
What is Marketing
Planning?

• Marketing planning is a process that allows

to determine goals and develop marketing
strategies and techniques to achieve these
goals.
• Market planning is the process of
organizing and defining the marketing aims
of a company and gathering strategies and
tactics to achieve them
Types of marketing
planning

• Long-term marketing planning: Long-term

marketing planning is marketing planning for
more than one year. It is the top management's
responsibility. This marketing planning sets
future objectives and strategies.
For instance, the selection of a price policy, a
distribution channel and media advertising.
• Short-term marketing planning: Short-term
marketing planning is marketing planning for
less than a year. The short-term plans help to
solve recurring issues.
 Assess the resources
Setting the Objective available( Internal
Analysis)

Marketing Evaluate the

Planning opportunities and risks
present.(External
Plan the marketing
strategy.
Analysis)
Process

6. Implement the
Budgeting marketing plan and
monitor it.
 • Marketing implementation is the process
of executing a marketing strategy that
helps an organization meet its goals.

Marketing It involves
setting objectives,
implementati action steps to achieve them,
on people responsible for each task,
a timeline of completion,
and resources available or required.