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MARKETING ENVIRONMENT

Process of Scanning the Opportunities and

Threats in the area where the business is

existing.

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To observe the relevant events and trends

To detect which events and trends are favorable

To assess the scope of various opportunities

To help secure the right fit between the environment

and the business unit.

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Macro Environment

Micro Environment

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Macro environment1. Demographic environment

2. Socio-Cultural environment

3. Economic environment

4. Political environment

5. Natural environment

6. Technology environment

7. Legal environment8. Government Policies

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Demographic environment

Population

growth rate

age distribution

Literacy

workforce

household patterns

population shifts

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Socio-Cultural environment

Culture

Religion, language, education, upbringing,

consumption habits, lifestyles, buying behavior

Social Class

Income

Occupation Location of Residence

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Economic environmentEconomic conditions of different segments of the

population, disposable income, purchasing power

Rate of growth of the economy.

Agriculture, Industry, Consumer Goods, Capital Goods,Services, Infrastructure, Imports, Export

Credit Availability and Interest Rates

Savings rate/Capital formation

Inflation Rate

Behavior of capital market.

Foreign Exchange rates, Tax RatesPrices of important materials

Energy and Labour (cost, skill, availability etc.)

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Political environmentForm of Government adopted by the country.

Political Stability

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Natural Environment

Natural ResourcesTrends governing the cost of raw material

Trends governing the cost of energy.

EcologyIssues like Environmental pollution

ClimateProducts whose demand depends on climate

Firms depending on climate dependent raw materials.

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Technology Environment

Options available in technologyLevel of Technology and technological changes prevailing in country

and also at the international level.

Merits and cost-effectiveness of alternative technologies.

Assess the scope of substitute products emanating from newtechnologies.

Governments approach in respect of technologyRegulations by Govt. in matters relating to technology.

Support in terms of use of modern technology.

Technology selectionForecast technological trends

Assess current and emerging technologies

Develop the inputs for right technology choice.

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Legal Environment

Consumer Protection

Employee Protection

Sectoral ProtectionCorporate Protection

Regulations on products, prices and distribution

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Micro Environment

Environment that is specific to the business:

The Market/Demand

The Consumer

The Industry

The Competition

Government Policies

Supplier related factors

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The Market/Demand

Nature of the demand

Size of the demand, present and potential

Changes taking place in demandInvasion of substitute products.

Changes taking place in consumption pattern.

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The ConsumerWhat benefits do the consumers look for in the

product?

Purchasing power of the consumers.

According to the customer, what is the need itserves?

Buying Behaviour; Buying Motives, Buying habits.

Lifestyles and needs; present position and trends.

Brand Loyalty.

Brand switching, how loyalties are shifting.

Who among the competitors remains closest to thecustomer and why?

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The Industry

Knowledge about industry and competition

Competitive Advantage

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Government Policies

Concession on large purchasers of goods and

services.

Subsidies on any select firms and industries.Policies on protection of home producers against

foreign competition.

Any bans on new entrants.

Involvement of government in producing goods.

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Supplier Related Policies:

Suppliers have their own bargaining power in

the industry.

Suppliers influence the cost of raw materialsand other inputs of the firm.

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A

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Marketing Environment consists of

Task environment immediate actors involved

in producing, distributing and promoting the

offering. Viz. company, suppliers, distributors,dealers and target customers.

Broad environment consists of six

components i.e. Demographic, Economic,

Physical, Technological, Political-Legal, Socio-Cultural environment.