MARKETING

ENVIRONMENT

THE COMPANY’S MARKETING ENVIRONMENT

Company

SuppliersDistributors & Dealers

Customers

Competitors

Public

The Economy

Demography

Political & Legal

Technology

Cultural Factors

Social Factors

THE COMPANY’S MARKETING ENVIRONMENT

• All Companies operate within a marketing environment. This environment consists of all the factors and forces that affect the company’s ability to transact effectively with its target market.

• This environment can be divided into :

(A) Micro-environment

(B) Macro-environment

(A) MICRO-ENVIRONMENT• The microenvironment consists of the forces

close to the company that affects its ability to serve its customers. It consists of following components :

(i) Company’s internal environment (Company’s other departments)

(ii) Suppliers (iii) Marketing Intermediaries (iv) Customers (v) Competitors (vi) Publics

MICRO-ENVIRONMENT

Suppliers

Company

Competitors

Marketing Intermediaries

Customers

Publics

(i) THE COMPANY

Mktg.

Top Management

Finance

R & DPurchasing

Manufacturing

Accounting

(The Company’s Internal Environment)

(ii) SUPPLIERS

• Suppliers are an important link in the company’s overall customer “value delivery system”.

• They provide the resources needed by the company to provide its goods and services.

• Supplier developments can easily affect marketing.

• Marketing managers must watch supply availability and must also monitor the price trends of their key inputs.(Rising supply costs may force price increases that can harm the company’s sales volume).

(iii) MARKETING INTERMEDIARIES

• Marketing intermediaries are firms that aid the company in promoting, selling, and distributing its goods to the final buyers.

• They include middlemen, physical distribution firms, marketing service agencies and financial intermediaries.

MARKETING INTERMEDIARIES

Middlemen- are business firms that help the company in finding customers and/or close sales with them. Middlemen are of two types :

• Agent Middlemen – find customers and negotiate contracts but do not take title to merchandize, e.g. brokers, representatives.

• Merchant Middlemen – Buy, take title to the goods, and resell merchandize, e.g. wholesalers, retailers etc.

MARKETING INTERMEDIARIES

Physical Distribution Firms - Assist the co. in stocking and moving goods from their original locations to their destinations,e.g. ware housing firms, transportation firms.

MARKETING INTERMEDIARIES

Marketing Service Agencies – Assist the company in promoting its products to the right markets, e.g. marketing research firms, advertising agencies, marketing consultancy firms etc.

MARKETING INTERMEDIARIES

Financial Intermediaries – Help finance transactions or insure against the risks associated with the buying and selling of goods, e.g. banks, credit companies, insurance companies etc.

(iv) CUSTOMERS / MARKETS

.

CompanyConsumer Market

Business Market

Reseller Market

Govt. Market

International Market

(v) COMPETITORS

• To be successful, a company must provide greater customer value and satisfaction than its competitors (Marketing Concept).

• Marketers must do more than simply adapt to the needs of target customers. They also must gain strategic advantage by positioning their offerings strongly against competitors’ offerings in the minds of consumers.

COMPETITORS

• Four basic competitions faced by a company :

Company

Perfect competition

monopolisticCompetition

Oligo poly

monopolyCompetition

CHARECTERISTICS

PERFECT MONOPOLISTIC

OLIOPOLISTIC

MONOPOLY

Number of competitors

MANY FEW TO MANY VERY FEW NO DIRECT COMPETITER

Similarity of goods/services offered by competing firms

SAME Seemingly different but may be quite similar

Similar or different

No directly competing products

Individual firm's control over price

None (set by the market)

Some Some REGULATED BY GOVT

Examples WATER PACKETAGRI PRODUCT

SHAMPOOOIL

AIROPLANEAUTOMOBOIL

RAILWAY

(vi) PUBLICS

• Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives.

Co.Financial Public

Media Public

Govt. Public

Citizen Action Public Local

PublicGeneral Public

Internal Public

PUBLICS

• Financial Publics (Banks, investment houses and stock holders)

• Media Publics (Newspapers, magazines, and radio & T.V. stations)

• Govt. Publics (Rules & regulations related to safety, truth in advertising and other matters)

• Citizen-action Publics (Consumer organizations, environmental groups, minority groups etc.)

PUBLICS

• Local Publics (Neighborhood residents and community organizations)

• General Publics (General public’s overall attitude toward co.’s products and activities)

• Internal Publics (Company’s workers, managers, volunteers and the board of directors)

(B) MACRO-ENVIRONMENT

CompanyDemographic Forces

Economic Forces

Natural Forces Technological

Forces

Political Forces

Cultural Forces

“ It is useless to tell a river to stop running; the best thing is to learn how to swim in the direction it is flowing”

MACRO-ENVIRONMENT• An organization’s success depends on the

ability of its executives to manage its marketing system in relation to its external environment. These forces (macro-environmental forces) are uncontrollable and pose opportunities and create threats for the company.

TODAY YOU HAVE TO RUN FASTER TO STAY IN THE SAME PLACE.

INDIAN MARKETING ENVIRONMENTFew Examples…………

• How some of the industry leaders lost their competitive advantage because they failed to perceive the environmental changes….?

• The decade of 1980s saw many of the industry titans losing their competitive advantage to relatively new entrants……..

(Contd..)

Few Examples…………

• Hindustan Motors and Premier Automobiles lost their pre-eminent position in the Indian market to Maruti Udyog’s Maruti 800.

• Mahindra and Mahindra were shaken up by Maruti Udyog’s Gypsy.

• Titan watches heralded a new era of watches and shook the giant HMT.

• Hindustan Levers Surf was cornered by Nirma.

Few Examples…………

• Television giants like NELCO,Crown, Weston, Salora,Bush etc. lost out to absolutely new firms and brands like Onida and Videocon.

• Videocon launched its washing machine in1998 and suddenly thereafter, one saw an explosion in the market with about half-a-dozen brands.

HOW TO ANALYZE THE CASE STUDY ?

• (1) Introduction : ( Write a brief introduction of the case study ).

• (2) Situation Analysis : ( After understanding the case do the situation analysis ). SWOT / SWORT Analysis is one of the Universally practiced way of doing the situation analysis. If enough information is given n the case, then do the SWOT / SWORT Analysis.

HOW TO ANALYZE THE CASE STUDY ?

• (3) Identify the problems ( Specify major problem area ).

• (4) Suggest the Solutions ( Alternative solutions ). Recommend the best solution in your view.

• (5) If at the end of the case ,questions are asked, then you can answer them directly just after the Situation Analysis (SWOT).

• (6) Conclusion (if any)

HOW TO ANALYZE THE CASE STUDY ?

• SWOT / SWORT ANALYSIS :

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Leveraging

Challenging

(Problem)

ConstraintsVulnerable

RISKS