Unit-2-Marketing-Environment-1 Gaurav Pandit

mareting

1. FundamentalsofMarketing

2. Unit-2
MarketingEnvironment
Contents
•Meaningandscopeofmarketingenvironment
•Microenvironmentvariables
•Macroenvironmentvariables
•Reactiveandproactivemarketing
•MarketingenvironmentofNepal

3. MeaningofMarketingEnvironment
Marketingenvironmentconsistsofallforcesthatdirectlyorindirectlyinfluencetheorganization’s
marketingactivities.
Marketingenvironmentforcesinfluencethisprocessofexchangeofinputsandoutputs.

4. MeaningofMarketingEnvironment
Kotler&Armstrong
“Themarketingenvironmentcomprisesallactorsandforcesinfluencingthecompany’sabilityto
transactbusinesseffectivelywiththetargetmarket.”
Cravens,HillsandWoodruff
“Theforceswhichareexternaltothemarketingmanagement function,largelyuncontrollable,
potentiallyrelevanttomarketingdecisionmakingandchangingand/orconstraininginnature.”.
Marketing isenvironment specific.Itoperatesinadynamicenvironment.Marketingenvironment
referstoallactorsandforceswhichinfluenceexchangerelationshipofmarketing withtarget
customers.Itaffectstheperformanceandoutcomesofmarketing.Itaffectstheability ofmarketing
toserveitscustomers.

5. MarketingEnvironment

6. ScopeofMarketingEnvironment
Marketingenvironmentisabroadconceptembracingvariousentities,activities,ideas,
forces,resources,exchangeprocesses,valuesnorms,andlaws.everythingthatmattersto
marketingisundermarketingenvironment.Thescopeofmarketing
environmentincludesthefollowingaspects:
Entities
Activities
Resources
Dynamism
Exchangeprocess

7. ScopeofMarketingEnvironment
Entities
InternationalagenciessuchasUNorganizations,WorldBank,International
MonetaryFundandWTOplaydetrimentalroleinthedevelopmentprocessofa
countryandsuperviseandregulatebusinessandtradeonaglobalbasis.
Nationalgovernmentsareinvolvedinregulatingthemarketingprocessthrough
legislationanddirectives.
TradeassociationssuchasFNCCIandChamberofCommerceetc.setnormsof
businessbehaviorandworkforpromotionoftradeandindustryinthecountry.
Businessorganizationsconverttheresourcesandinputsintoproductsand
services.
Laborunionsdetermineindustrialproductionsandproductivity.
Socialorganizationssuchasconsumerassociationprotectstheconsumersright.

8. ScopeofMarketingEnvironment
Activities
Theeconomic,social,politicalandindividualactivitiesarepartofthemarketing
environment.
Economic-Themarketsizeexpandswheneconomygrowsandmarketing
sufferswhentheeconomyshowsdown.
Social-Festivals,socialevents,cross-culturalinteractionetc.expandthe
market.
Political-Strike,demonstration,bandsetc.decreasesmarketingactivities.
Individual-Theydeterminethelevelofconsumption.

9. ScopeofMarketingEnvironment
Resources
Keyresourcesofthecountrysuchasnaturalresources(mineral,waterandsolar)
technological(researchanddevelopment)andhuman(education,knowledge,skill
andentrepreneurship)arealsounderthescopeofmarketingenvironment.
IndiaandChina
Developingrapidlyonthebasisofmineralresources.
Gulfcountries
Petroleumresources
Nepal
Waterresources
Japan,WestEuropeancountries,USAand Canada
Goodhumanandtechnologicalresources.

10. ScopeofMarketingEnvironment
Dynamism
Allenvironmentalforces-demography,economy,politics,laws,technologyandsocio-
cultureofallcountriesarechanging.Thechangesarebringinginnewbusiness
opportunitiesandnewchallenges.
Japanand manyWestEuropeancountries
Facingtheproblemofnegativepopulationgrowthandagingpopulation.
Iraq,Afghanistan,Congo,SudanandSomalia
Warsituationformorethanadecade.
PeaceinNepalandSrilanka
Broughtnewhopesinthesecountries.
IranandNorthKorea
Facingthreatsofwar.
Technologicalinnovations

11. ScopeofMarketingEnvironment
ExchangeProcess
Theprocessofexchangeofinformation,inputs,technology,ideas,products
andservicesbetweentheenvironmentandthebusinessfirmisalsounderthe
scopeofmarketingenvironment.
Thefirmreceivesmoney,rawmaterials,humanresources,technologyand
managementideasandconvertstheinputsintousefulproductsandservices.

12. VariablesofMarketingEnvironment
MicroEnvironmentofMarketing
MicroEnvironmentconsistsofconditionsandforceswithintheorganizationwhichaffectsthe
performanceandoutcomesofmarketing.Itaffectstheorganizationdirectly.Itreferstothe
environmentthatmostcloselylinkedtothefirm.
Thisenvironmentisalsonotunderthefullcontrol ofbusinessbutthebusiness caninfluenceit.

13. VariablesofMarketingEnvironment
MicroEnvironmentofMarketing

14. VariablesofMarketingEnvironment
MicroEnvironmentofMarketing
Objectives-
Profit,marketshare,leadership,socialresponsibilityetc.
Structure-
Design ofjobsandrelationships.
OrganizationResources-
Physical,Financial,HumanandInformation.
OrganizationalCulture-
Sharedvaluesandbeliefs,Norms,Symbolsand
Artifacts.

15. VariablesofMarketingEnvironment
MicroEnvironmentofMarketing
Customers-
Consumers,Resellers, BusinessBuyers,InstitutionalBuyers,International
Buyers
Suppliers-
Suppliersofrawmaterials, energy,labor,technologyandmoney.
Competitors
GenericCompetition,ProductCompetition,BrandCompetition,Price
Competition,Non-priceCompetition.
MarketIntermediators
Middlemen,Facilitators,MarketServiceAgencies,Financial
Institutions.
Government
Governmentpolicies,laws,rulesandregulations.
LaborUnion
PressureGroups
Consumersassociations,environmentalgroups,humanrightsgroups
etc.
Media
Newspapers,magazines,radio,television,filmsetc.

16. VariablesofMarketingEnvironment
MicroEnvironmentofMarketing

17. VariablesofMarketingEnvironment
MacroEnvironmentofMarketing

18. VariablesofMarketingEnvironment
MacroEnvironmentofMarketing
Constitutionofcountry
PoliticalSystem
Ideologicalforces,politicalpartiesandtheirroles, election
system,rolesofpoliticalinstitutions.
Separationofpower
Legislature,ExecutiveandJudiciary.
Government-BusinessRelationship
Infrastructuredevelopment,promotingordiscouraging
andspecificbusiness.
Internationalpoliticalevents
Others
Roleofpoliticalparties,politicalstability,conditionof
politicalandhumanrightsetc.

19. VariablesofMarketingEnvironment
MacroEnvironmentofMarketing
EconomicSystem
Capitalistic,Socialistic,Mixed
Economic Policy
FiscalPolicy,MonetaryPolicy,CommercialPolicy,Industrial
Policy,TradeandTransitPolicy,EmploymentPolicy
Economic Condition
Economicgrowthrate,purchasingpower,percapita
income,sizeandnatureofeconomy,businesscycle,
availabilityanddevelopmentofcapitaletc.
Globalizationeconomicsituation

20. VariablesofMarketingEnvironment
MacroEnvironmentofMarketing
SocialInstitutions
Family,clubs,musicalgroupsetc.
DemographicFactors
Sizeofpopulation,agemix,migrationrate,urbanization
rate,populationgrowthrateetc.
Attitudesandbeliefs
Wayofthinking/behaving
Religionandlanguage
SocialClass
Upperclass,middleclassandlowerclass.
Others
Styleofsociety,literacyrate,castsystemetc.

21. VariablesofMarketingEnvironment
MacroEnvironmentofMarketing

22. ScanningtheMarketingEnvironment
Themarketingenvironmentalforcesarenormallyuncontrollableandhencethe
marketingmanagershavetodesigntheirmarketingactivitiesaccordingtothe
influencesoftheenvironmental forces.
Forsuccessfulmarketing,theorganizationshould
beabletoanticipateandpredictthechangesin
theenvironmentandthemarketingmanagers
shouldbeabletoanticipatethefollowingkey
factors:
Whichtechnologywilldominateinthenear
future?
Howconsumerstasteandpreferencesare
changing?
Whichpoliticalpartywillcometopower?
Whatisthetrendsinthemacro-economic
indicatorsare?

23. EnvironmentalScanning
Scanningisacquiringinformationandenvironmentalscanningisessentialforformulating
marketingstrategicplans.
Itinvolves detectingemergingtrendsandcreatingscenarios.
Itmonitorschangesanddevelopmentsintheenvironmentthathavepotentialimpacton
marketing.
RichardSteers
“Environmentscanninginvolvesmonitoringchangesanddevelopmentsintheenvironment
thathavepotentialimpactontheorganization.”
AzherKazmi
“Environmentalscanningistheprocessbywhichorganizationsmonitortheirrelevant
environmenttoidentifyopportunitiesandthreatsaffectingtheirbusiness.”

24. ScanningtheMarketingEnvironment
Monitoring–
Keepingtrackofthemajortrendsintheenvironmentalforces.
Ithelpstheorganizationtoprepareandcapitalizeonevery
opportunityarisingoutofthechangestakingplaceinanyofthe
environmentalforces.
Scanning-
Collectionofvitaldataandinformationaboutthevarious
environmentalforces.
Itinvolvesobservation,useofsecondarysourcesofinformationand
marketingresearchtounderstandthechangesintheenvironment.

25. Reactive&ProactiveMarketing
Marketing
Plan???
NO!!!
Marketing
Plan???
YES!!!

26. ProactiveMarketing
Althoughmanyoftheenvironmentalforcessuchasdemography,economy,
cultureandnaturalfactorsarenotcontrollable,theenvironmentalforcessuch
aspolitics,lawandtechnologycanbeinfluencedbycorrectandcalculated
moves.
Itusespolitical,psychological,economicandpublicrelationsskillstoinfluence
theenvironmentalforcestotheorganization’sbenefit.
Thetechniqueofpoliticallobbying,financingpoliticalpartiesandelections,
usingpublicitytoshapepublicopinionandmanyothersstrategiesareusedby
organizationstobringtheenvironmentalforcestotheirfavor.
ActiveApproach

27. ProactiveMarketing
Features:
Creatingawrittenmarketingplan,basedonhomework,analysisandresearch.
Itisviewedandtreatedasamanageablebusinessprocess.
Isnotdonebasedonfadsordesperation,butonlywithtime-honoredmethods.
Referralsareregularlygeneratedthroughincentiveprograms,socialmediaand
othermeans.
Profitsareincreasing.Moreover,theownersarehappyandincontroloftheir
lives.

28. ReactiveMarketing
Itviewsasmarketingenvironmentalforcesare
uncontrollableanddifficulttopredict.
Passiveapproach.
Organizationtriestoadjustitsmarketingmix
accordingtothechangesintheenvironment.
Theywaitfortheenvironmenttochangeand
reactonlyafterthechange.
Theorganizationanalysestheenvironmental
changesandfindssuitablewaytoavoidthe
threatandutilizethenewopportunities.

29. ReactiveMarketing
Features:
Nowrittenmarketingstrategyand/orplan.
Referralsoccurwheneverthecustomer
decidestocall.
Marketingisinconsistentandweak.
Whenmarketingisdone,itisusuallya,“Let’s
trythislatestfad.”

30. MarketingEnvironmentinNepal
Knowingalltheseprospectaboutthemarketingenvironment,whatis
theconditionofmarketinNepal?
Demography?
Economy?
Socio-culture?
PoliticsandLaws?
Technology?
NaturalForces?
?
HOMEWORK
?
PositiveImpact?
NegativeImpact?

31. BoardQuestions
1.Pointoutthedifferencesbetweenmicroenvironmentandmacroenvironment.1
2.Whatdoyouknowabouttechnologicalenvironment?Describethecomponentsoftechnologicalenvironment
withsuitableexamples.5
3.Whatare thecomponentsofinternalenvironment?1
4.DiscussthemarketingenvironmentinNepal.5
5.Statethemicroenvironmentofmarketing.1
6.Whatismarketingenvironment?Howdoesanexternalenvironmentaffectthemarketingsystemofan
organization?Explaininbrief.6

32. CaseStudy