PROGRAM NAME - M.B.A.

COURSE NAME - Basics of Marketing

UNIT NO. – II
UNIT NAME – Marketing Environment

PRESENTED BY- Dr. Yogita Gupta.

Topics to be covered.
• Concept of Environment,
• Macro Environment and Micro Environment
• Components and characteristics,
• Needs & Trends,
• Major forces impacting the Macro Environment and Micro
Environment
Concept of Environment
• Marketing environment means the market situation/atmosphere within
which a business enterprise has to operate.
• According to Philip Kotler, ―the company‘s marketing environment
is made up of the sectors and forces outside the firm‘s marketing
function which infringe upon the ability of marketing management to
develop and maintain a successful relationship with the firm‘s target
audience
• Marketing environment is the sum total of political, economic, social,
technological and other forces which move around the business
enterprise.
 Macro Environment and Micro Environment
• A firm is exposed to both external and internal environments. The internal
environment consists of company‘s resources such as production, finance,
HR, research and development, location and image. External environment
has two distinct components: the Micro-environment and the Macro-
environment
• Micro-environment: It affects a particular firm and consists of Consumers,
Marketing intermediaries like Distributors, Wholesalers, Dealers, Suppliers
and Competitors.
• Macro-environment: It affects all the firms and include Demographic
factors, Economic conditions, Social and cultural forces, Political and Legal
forces, Technology and Ecological factors.
Components of Marketing
Environment
 Major forces impacting the Macro Environment
Marketing Management is directly interested in demography, i.e., scientific study of human population and its distribution structure.

Demography Demographic analysis deals with quantitative elements such as age, gender, education, occupation, income, geographic concentration
and dispersion, urban and rural population, etc.

Economic Marketing plans and programmes are also influenced by many other economic factors such as interest rates, money supply, price level,
consumer credit, etc. Higher interest rates adversely influence real- estate market and markets for consumer durables sold on

Environment
instalment basis.

Social class is determined by income, occupation, location of residence of members. Broadly, we have three social classes i.e., upper,

Social & Cultural middle and lower and each class has its own standards with respect to lifestyle, behaviour, etc.
•Culture provides people with a sense of identify and understanding
•of acceptable behaviour in a society.

Environment •Example: In our country, the younger generation is moving ahead with the times, but the traditional population is not comfortable with the
westernization of our culture

Political & Legal Political and legal forces are gaining considerable importance in marketing activities and operations of business enterprises. Marketing systems are affected by
government‘s monetary and fiscal policies, import-export policies, customs duties. Legislation controlling physical environment, e.g., anti-pollution laws also influence

Forces
marketing plans and policies.

Technology is the driving force behind many new product innovations and the development of many markets. The time between idea
generation and commercialization is now considerably shortened and a technological breakthrough can take place within a few years

Technology
now.
•Electronic industry is the best example of exploiting new marketing opportunities. Digital watches killed the marketing prospects of
traditional watches. Artificial fibre cloth has almost taken over the pure cotton textile industries in many countries. Television has
adversely affected radio and cinema industries.

Ecology, economic development, and market economy can go hand- in-hand. Sustainable development, environmental protection can be
integrated to assure a healthy, peaceful, and productive life in harmony with Nature, our Earth-Goddess.

Ecology (Nature) •Environmental experts are vigorously advocating the preservation and survival of our entire ecological systems. It is said that pollution
is an inevitable by-product of high-consumption economic systems prevalent in the advanced countries. The marketing system of an
enterprise has now to satisfy not only the buyers of its products (consumers/users) but also societal wants.
Major forces impacting the Micro Environment
The wants, desires, preferences, expectations and aspirations of consumers keep fluctuating. Marketing
system must respond to the customer needs and desires in all aspects. Marketing policies, program and

Consumers strategies are planned, organized and executed with the main objective of customer satisfaction and
service.

Marketing
The wants, desires, preferences, expectations and aspirations of consumers keep fluctuating. Marketing
system must respond to the customer needs and desires in all aspects. Marketing policies, programs
and strategies are planned, organized and executed with the main objective of customer satisfaction and

Intermediaries
service.

The Company purchases raw materials from vendors/suppliers and it has to ensure regular supplies
to maintain continuity of production. Shortage of raw materials can affect production volumes leading

Suppliers
to low sales and low profits.
•Similarly increase in the prices of raw materials can affect sales volumes and profits. Therefore,
suppliers play a major role in the profitable running of an organisation

Although price competition is still present, particularly in the retail market, non-price competition is of
paramount importance for the manufacturer. The Marketing Manager has little or no control over the

Competition actions of competitors. Competitors considerably influence the company‘s choice of marketing strategies,
particularly in relation to selection of target markets, suppliers, marketing channels as well as in relation
to its product-mix, price-mix and promotion-mix.
Marketing strategy is itself a plan to fight against competition and to win over the competition. Examples:
The paging industry has been almost wiped out by cellular companies offering short messaging
service. Typewriters have become obsolete with the introduction of computers.
 Characteristics of Marketing Environment
1.The environment of any thing is large or small, & as simple or complex
2.Changing consumer incomes, technological innovation, changing government agencies, & shifting consumer values are examples of the
marketing environmental
3.This environment includes those things that are external, largely uncontrollable, changing, constraining, & potentially relevant
4.The marketing environment includes: Non marketing departments within the firm
• As well as markets,
• Competitors,
• The macroenvironment
5.Marketers are primarily adapters
• They adapt their products
• They adapt
• They adapt promotion &
• They adapt distribution to fit the marketplace, which was true for the auto industry during the energy crisis
6.Certain environmental forces are partially controllable, but most are largely uncontrollable
• Some changes in environmental factors, such as shifting population characteristics, represents a key source of uncertainty
• Other changes constrain management to the extent of defining a straight & narrow path for it
7. The marketing environment must be potentially relevant to marketing decision making in the organization
• The potentially relevant environment for an electronic calculator firm is very different from that for a soap
8. The environment comprises surrounding offices & personnel within the company, the intra-organizational environment
9. The most important aspect of the intra-organizational environment is the internal corporate, or “the collection of beliefs, expectations, &
values shared by the corporation members & transmitted from one generation of employees to another
10. Leading companies seem to exhibit a relatively open, creative, & adaptive corporate culture
Needs & Trends

• NEED
• After researching the marketing environment, entrepreneurs make well-informed
business decisions, understand customer needs and behavior, create efficient
budgeting, recognize potential opportunities and threats, and develop an effective
marketing strategy.

• Trends
• Growing Customer Based
• Living longer and more responsibly
• Sustainability is of high concern
THANK YOU