Marketing Environment

Slide 1 © 2003 By Default!
Marketing environment
By
Raveendra Rao K
School of Management
Manipal Academy of Higher Education
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MARKETING ENVIRONMENT
Environmental Scanning (Environmental Monitoring)
Environmental Scanning – is the process of

1. Gathering information regarding company’s
external environment
2. analysing it, and
3. Forecasting the impact of whatever trends the
analysis suggests
Any company operates in two environments

 External Environment (Uncontrollable)
 Internal Environment (Controllable)

There are two levels of external forces:

1. Macro influences ( They affect all firms ie Industry)
includes demographics, economic conditions, culture,
and laws
2. Micro influences (Affect a particular firm) consists of
suppliers, marketing intermediaries, and customers.
External Macro environment

These will have considerable influence on company’s
marketing system; a change in any one of them can
cause changes in one or more of others. They are
dynamic forces that is, they are subject to change and
at an increasing rate.
External Macro environment includes
 Demography
 Economic conditions
 Competition
 Social and cultural forces
KRR MM 2017
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 Political and legal forces
 Technology
Demography
The statistical study of human population and its
distribution is called demography
Eg.
In 1980s in US, number of people aged 65 and over
surpassed number of teenagers.
By 2020, about one in four Americans will be over 65

What are the Marketing Implications of these
demographics?
Opportunities for firms in Investment, Insurance, health
care services, Family tours, Old age homes, Special
promotion for old people in banks(increased interest
rates)



Economic Conditions
Demand for products or services is because of
willingness of people to buy backed by adequate
purchasing power
Any company’s marketing program is affected by
economic factors like
 Current and anticipated stage of business cycle
 Inflation and
 Interest rates
Stage of Business Cycle
A traditional business cycle goes through four stages
1. Prosperity : a period of economic growth. During this
stage, organizations tend to expand their Marketing
Programs as they add new products and enter new
markets
2. Recession : a period of retrenchment for consumers
and business. People can become discouraged,
scared and angry. These feelings will affect their
buying behavior. KRR MM 2017
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3. Depression: Economy at its worst conditions. Lot
of unemployment and less disposable income.
4. Recovery : is the period when economy is moving

from recession to prosperity. Unemployment
decreases and disposable income increases.
Companies expand marketing programs.
Inflation: Inflation is a rise in the prices of goods and

services. When prices rise at faster rate than personal
incomes, consumer buying power declines
Marketing implications?
Interest Rates: When interest rates are high, consumers

tend not to make long-term purchases(like housing,
automobiles, etc)
Marketing implications?

Competition
 From domestic firms
 From International companies
Competition gives rise to alliances, JVs, Consotoria,
Price reductions, New variants of products.
Types of competition: A firm generally faces 3 types of

competition
1. Brand Competition: comes from marketers of directly
similar products e.g., VISA and American Express
competing internationally in the credit card field.
2. Substitute products: Products satisfying the same
need
3. Budget competition(competition for same buying
power). Competing for same disposable income of
consumer.

Social and Cultural Forces
 Education
 Religion/Races
 Environmental consciousness
Marketing Implications?
 Heinz using recycled ketchup bottles
 Battery manufacturers now making mercury free
batteries
 Cosmetics companies not conducting tests on animals
 McDonald’s replaced its polystyrene clamshell
hamburger packages with paper
 Freon free compressors by refrigerator manufacturers
 Increasing health/fitness consciousness

 Impulse buying
 Ready to pay more for convenience


Political and Legal forces
 Monetary and fiscal policies : Marketing systems are
affected by the Level of Government Spending, the
money supply and tax legislations.
 Social Legislation and regulation – Antipollution laws,

environment protection laws etc.
 Government relationships with Industries:- Subsidies,

Tariffs, Quota, Deregulation, Privatization etc.
 Legislations related specifically to Marketing: Federal

Laws, State Laws, Local Laws.
 Source of Information and Buyer of Products:

Government provide lots of vital information to
marketers through its publications and Government
itself is a large buyer.
Technology
Technology has a tremendous impact on our life-styles,
our consumption patterns, and our economic well being.
Can you imagine life without, Plastics, antibiotics,
automobile, laser, computer, video games? W would have
food shortage if there were no developments in
agricultural technology. Technology creates new market
with breakthroughs(inventions)
Technological breakthroughs can affect market in 3 ways
1. Start entirely new industries(computers, Mobile phones,
Laser)
2. Radically alter or virtually destroy existing industries.
3. Stimulate markets and industries not related to new

technology. Ex - New home appliances and frozen foods
gave homemakers additional free time in which to engage
in other activities.
External Microenvironment
 Market
 Suppliers
 Marketing intermediaries
Organization's Internal Environment

 Production facilities
 Financial resources
 Human resources
 Company Image
 R&D
 Location

Marketing Environment - India

 Age distribution of the Indian Population
Age distribution 1992 1997 2007
0-4 12.8 11.7 10.0
5-14 22.9 22.1 19.5
15-59 57.7 59.1 62.3
60 and above 6.6 7.1 8.3
Youth market is large.
Marketing Implications?
Motorcycles replacing scooters, Trendy bicycles,
watches,readymade clothing, Jeans, Liquor, Cigarette
 Changing role of Indian woman

 Joint families to nuclear families
 New Urban Man and Woman and Family
 Increasing literacy rate
Income levels
Structure of the Indian Market
Category for 1995-96(Millions)
Rural Urban Total
Very rich 0.4 0.8 1.2
Consuming Class 15.9 16.6 32.5
Climbers 37.3 16.8 54.1
Aspirants 36.9 7.1 44.0
Destitutes 27.7 5.3 33.0
Annual income ranges

Destitutes : below Rs.16,000
Aspirants : between 16,001-22,000
Climbers : between 22,001 and 45,000
Consuming class: between 45,001 and 2,15,000
Very rich : over 2,15,000
Slide 18 The affluency ladder(Based on Monthly Family Income) © 2003 By Default!
More than Rs 1
crore(6515)
More than Rs 50 lakh but less than Rs 1

crore(20,863)
More than Rs20 lakh but less than 50 lakh(98,289)
More than Rs 10 lakh but less than 20 lakh(3,20,900)
More than Rs 5 lakh but less than Rs. 10 lakh(10,58,961)


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Slide 1 © 2003 By Default!

A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

Environmental Scanning (Environmental Monitoring)

Environmental Scanning – is the process of

Any company operates in two environments

 Internal Environment (Controllable)

A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

There are two levels of external forces:

External Macro environment

By 2020, about one in four Americans will be over 65

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A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

4. Recovery : is the period when economy is moving

Inflation: Inflation is a rise in the prices of goods and

Interest Rates: When interest rates are high, consumers

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Types of competition: A firm generally faces 3 types of

A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

 Increasing health/fitness consciousness

A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

 Social Legislation and regulation – Antipollution laws,

 Government relationships with Industries:- Subsidies,

 Legislations related specifically to Marketing: Federal

 Source of Information and Buyer of Products:

2. Radically alter or virtually destroy existing industries.

3. Stimulate markets and industries not related to new

Organization's Internal Environment

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Marketing Environment - India

 Changing role of Indian woman

Annual income ranges

More than Rs 50 lakh but less than Rs 1

More than Rs20 lakh but less than 50 lakh(98,289)

More than Rs 10 lakh but less than 20 lakh(3,20,900)

More than Rs 5 lakh but less than Rs. 10 lakh(10,58,961)

A Free sample background from www.powerpointbackgrounds.com KRR MM 2017

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