marketing environment & it's types -ahmad faraz

Marketing

Marketing environment & it’s types ByAhmad Faraz

Ahmad Faraz [email protected] Rasool pur Colony, Noor Shah

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Marketing Environment

Marketing activities are influenced by several factors inside and outside a business firm. These factors or forces influencing marketing decisions are collectively called marketing environment. It comprises all those forces which have an impact on market and marketing efforts of the enterprise.

According to Philip Kotler : “ A company marketing environment consists of the actors and forces that affect the company’s ability to develop and maintain successful transactions and relationships with its target customers.”


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The Marketing Environment

Company

Macro-Environment


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Types Of Marketing Environment

–Microenvironment (internal forces) - forces close to the company that affect its ability to serve its customers.–Macro environment (external forces)-

larger societal forces that affect the whole microenvironment.


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Microenvironment

• The forces close to the company that affect its ability to serve its customers –

• They include : company Suppliers Intermediaries Customers Competitors Publics


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The Microenvironment

Company

Customers

Publics Suppliers

Competitors Intermediaries

Forces Affecting a Company’s Ability to

ServeCustomers


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The Company’s Macro environment

• The larger societal forces that affect the whole microenvironment - demographic, economic, natural, technological, political and socio-cultural forces.

They include: DemographicEconomicNaturalTechnologicalPoliticalSocio-Cultural


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Micro-Environment

Company

Socio-Cultural Demographic

Technological Economical

Natural Political


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Demographics

Demography is the study of population characteristics that are used to describe consumers. Demographics tell marketers who are the current and potential customers, where are they, how many are likely to buy and what the market is selling. Demography is the study of human populations in terms of size, density, location, age, sex, race, occupation and other statistics.


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• For this we need to understand the demographic variables which are traditionally used by marketers, to segment the markets.

• Income:• Income determines purchasing power and status. Higher the income, higher is

the purchasing power. Though education and occupation shapes one’s tastes and preferences, income provides the means to acquire that.

• Life-style:• It is the pattern of living expressed through their activities, interests and opinion.

Life-style is affected by other factors of demography as well. Life-style affects a lot on the purchase decision and brand preferences.

• Sex:• Gender has always remained a very important factor for distinction. There are

many companies which produce products and services separately for male and female.

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• Education:• Education implies the status. Education also determines

the income and occupation. With increase in education, the information is wider with the customers and hence their purchase decision process is also different. So the marketers group people on the basis of education.

• Social Class:• It is defined as the hierarchical division of the society into

relatively distinct and homogeneous groups whose members have similar attitudes, values and lifestyle.



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• Occupation:• This is very strongly associated with income and education. The

type of work one does and the tastes of individuals influence one’s values, life-style etc. Media preferences, hobbies and shopping patterns are also influenced by occupational class.

• Age:• Demographic variables help in distinguishing buyers, that is, people

having homogenous needs according to their specific wants, preferences and usages. For instance, teenagers usually have similar needs. Therefore, marketers develop products to target specific age groups.

• The youth are being targeted through advertisements and promotional campaigns, stores are being designed with ‘youthful’ features, youth events are being sponsored, and even new technology is developed with their tastes in mind.


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Economic Environment

People alone do not make a market. They must have money to spend & be willing to spend it. Economic environment is the most significant component of the marketing environment. It affects the success of a business organisation as well as its survival. The economic policy of the Government, needless to say, has a very great impact on business. Some categories of business are favourably affected by the Government policy, some adversely affected while some others remain unaffected. The economic system is a very important determinant of the scope of private business and is therefore a very important external constraint on business.


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General Economic Conditions• Business cycle: fluctuations in the economy that follow the

general pattern of prosperity, recession, depression and recovery.

• Prosperity: A period during which unemployment is low and total income is relatively high.

• Recession: A period during which unemployment rises and total buying power declines.

• Depression: A period during which unemployment is extremely high, wages are very low, total disposable income is at a minimum and consumers lack confidence in the economy.

• Recovery: The stage of the business cycle in which the economy moves from depression or recession to prosperity.


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Economic Environment

Key Economic concerns for

marketers

Change in consumer

spending pattern

Economic DevelopmentChanges in income


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Natural EnvironmentNatural resources that are needed as inputs by marketers or that are affected by marketing activities.IssuesShortage of raw materialsIncreased cost of energyIncreased pollutionGovernment intervention in natural resource management


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Natural Environment

Factors Affecting

the Natural

Environment

More GovernmentIntervention

Shortages of Raw Material

Increased Costsof Energy

Higher PollutionLevels


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Technological Environment

• The technological environment is the most dramatic force now facing our destiny. Technological discoveries and developments create opportunities and threats in the market. The marketer should watch the trends in technology. The biggest impact that the society has been undergoing in the last few years is the technological advancement, product changes and its effects on consumers.

• Technology has brought innumerable changes in human lives, be it in the field of science, medicine, entertainment, communication, and travel or office equipment. Name any field, and one can see changes in product or efficiency and faster services.


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• It has a definite impact on buyers and marketers decisions

• It provides mechanical, physical and numerous other processes which help in attaining higher standard of living

• It has adverse effects like pollution, unemployment, increase in crime rate, etc

• Marketers must be aware of new developments in technology.


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Technology-continued• Technological developments may put some people out of business

and at the same time, open up new business opportunities to others• For ex: introduction of synthetic fabrics drove away sheep raisers and

cotton growers out of business• Solar pocket calculators and hand cameras• CDs and Video tapes• Virtual reality applications in Marketing is a new application due to

technological progress• Technological developments have improved the standard of living

and given more leisure time• Improvements in communication, transportation • Technology has given wonder drugs like Ampicilliin, by- pass surgery,


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Technology-continued

• Technology grows out of research made by business, universities

• Most of the products that we talk today were not there a few years back. For example, Computers, Photostat, laser technology, scanners.


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Rapid Pace of Change

High R & D Budgets

Focus on MinorImprovements

IncreasedRegulation

Issues in the TechnologicalEnvironment


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Political Environment

The political environment consists of factors related to the management of public affairs and their impact on the business of an organisation. Political environment has a close relationship with the economic system and the economic policy. Some Governments specify certain standards for the products including packaging. Some other Governments prohibit the marketing of certain products.


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Political environment

Key trends in political

Environment


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Socio-Cultural EnvironmentSocio-cultural forces refer to the attitudes, beliefs, norms, values, lifestyles of individuals in a society. These forces can change the market dynamics and marketers can face both opportunities and threats from them. Some of the important factors and influences operating in the social environment are the buying and consumption habits of people, their languages, beliefs and values, customs and traditions, tastes and preferences, education and all factors that affect the business.


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Socio-Cultural Environment

• Understanding consumer needs is central to any marketing activity and those needs will often be heavily influenced by social and cultural factors. These cover a range of values, beliefs, attitudes and customs which characterize societies or social groups. Changes in lifestyle of people affect the marketing environment.


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Socio-Cultural Environment

OfOrganizations

OfNature

OfOneself

OfSociety

Ofthe Universe

OfOthersViews

That ExpressValues