MARKETING ENVIRONMENT

MEANING Of MARKETING ENVIRONMENT :

Marketing environment is the combination of external and internal factors
and forces that affect a company's marketing activities. These factors affect the
different realms of business. The marketing environment drives all the major
marketing decisions of a business and is different for each organization.

“Marketing Environment is the combination of external and internal factors and

forces which affect the company’s ability to establish a relationship and serve its
customers.”
DEfINITION Of MARKETING ENVIRONMENT :
AccORDING TO PhIlIP KOTlER :
“Marketing environment refers to the external factors or forces that affect the
company's ability to develop and maintain successful relationship with its target
customers.”
AccORDING TO cARVENs :
“The marketing environment actors and forces outside marketing that
affect marketing managements ability to build and maintain successful relationship
with target customers.”
ENVIRONMENTAl MONITORING /scANNING :
Environmental Scanning is the process of gathering information marketing
research and marketing intelligence regarding marketing environment, analyzing and
forecasting the impact of whatever trends the analysis suggests.
Environmental scanning is a process of gathering information about the
events and their relationship with the internal and external environment of the
organization. The primary aim of environmental scanning is to find out the future
prospects of business organization.
DEfINITION Of ENVIRONMENTAl scANNING :
AccORDING TO J. DAVID hUNGER :
“Environmental Scanning is the monitoring, evaluating and disseminating of
information from the external and internal environment to key people within the
corporation”.
AccORDING TO PhIlIP KOTlER :
“Environmental scanning is the process of gathering information about
events and their relationships within an organization's internal and external
environments.”
PROcEss OR sTEPs Of scANNING MARKETING ENVIRONMENT :
1. scANNING NEED IDENTIfIcATION :
Environmental scanning is necessary because there are rapid changes taking
place in the environment that has a great impact on the working of the business firm.
Analysis of business environment helps to identify strength weakness, opportunities
and threats. SWOT analysis is necessary for the survival and growth of every
business enterprise.
2. INfORMATION AcQUIsITION :
Acquisition marketing is a strategy that involves the promotion of goods or
services to a new audience. The goal is to target consumers in the "interest" or
"consideration" phase of the conversion funnel and convince them of the value of
the advertised goods or services.
3. INfORMATION ORGANIZATION AND sTORAGE:
The marketing information system is a customer relationship management
(CRM) system. A CRM system stores and organizes customer data, such as contact
information, purchase history, and preferences. It also allows companies to segment
customers based on their data and track customer interactions over time.
4. INfORMATION PROcEssING AND sYNThEsIZING :
In the context of brands and marketing, synthesis involves taking all the data
gathered from various sources and combining it into a single view. This allows
brands and marketers to gain a more comprehensive understanding of their target
audience and how their marketing efforts are impacting the market.
5. INfORMATION DIsTRIBUTION :
Information Distribution involves making needed information available to
project stakeholders in a timely manner. It includes implementing the
communications management plan as well as responding to unexpected requests for
information. Distribution is the process of making a product or service available for
the consumer or business user who needs it, and a distributor is a business involved
in the distribution stage of the value chain.
6. INfORMATION EVAlUATION AND UsE :
A market evaluation is a process of analyzing a market in terms of its size,
trends, competition, customer preferences, and other factors to understand its
dynamics and potential opportunities. It's often conducted when a business is
planning to launch a new product, enter a new market, or during strategic planning.
PURPOsE / sIGNIfIcANcE Of scANNING MARKETING ENVIRONMENT :
1. Identification of strength.
2. Identification of weakness.
3. Identification of opportunities.
4. Identification of threat.
5. Optimum use of resources or Effective utilization of resources.
6. Survival and growth.
7. To plan long-term business strategy or Strategy formulation.
8. Environmental scanning aids decision-making.
9. Constant monitoring of resources.
10. Useful for the managers.
11. Prediction of future.
1. IDENTIfIcATION Of sTRENGTh :
Strength of the business firm means capacity of the firm to gain advantage
over its competitors. Analysis of internal business environment helps to identify
strength of the firm. After identifying the strength, the firm must try to consolidate
or maximize its strength by further improvement in its existing plans, policies and
resources.
2. IDENTIfIcATION Of wEAKNEss :
Weakness of the firm means limitations of the firm. Monitoring internal
environment helps to identify not only the strength but also the weakness of the
firm. A firm may be strong in certain areas but may be weak in some other areas.
For further growth and expansion, the weakness should be identified so as to correct
them as soon as possible.
3. IDENTIfIcATION Of OPPORTUNITIEs :
Environmental analyses helps to identify the opportunities in the market. The
firm should make every possible effort to grab the opportunities as and when they
come.
4. IDENTIfIcATION Of ThREAT :
Business is subject to threat from competitors and various factors.
Environmental analyses help them to identify threat from the external environment.
Early identification of threat is always beneficial as it helps to diffuse off some
threat.
5. OPTIMUM UsE Of REsOURcEs OR EffEcTIVE UTIlIZATION Of
REsOURcEs :
Proper environmental assessment helps to make optimum utilization of
scare human, natural and capital resources. Systematic analyses of business
environment helps the firm to reduce wastage and make optimum use of available
resources, without understanding the internal and external environment resources
cannot be used in an effective manner.
6. sURVIVAl AND GROwTh :
Systematic analyses of business environment help the firm to maximize
their strength, minimize the weakness, grab the opportunities and diffuse threats.
This enables the firm to survive and grow in the competitive business world.
7. TO PlAN lONG-TERM BUsINEss sTRATEGY OR sTRATEGY
fORMUlATION :
A business organization has short term and long-term objectives. Proper
analyses of environmental factors help the business firm to frame plans and policies
that could help in easy accomplishment of those organizational objectives. Without
undertaking environmental scanning, the firm cannot develop a strategy for
business success.
8. ENVIRONMENTAl scANNING AIDs DEcIsION-MAKING:
Decision-making is a process of selecting the best alternative from among
various available alternatives. An environmental analysis is an extremely important
tool in understanding and decision- making in all situation of the business. Success
of the firm depends upon the precise decision making ability. Study of
environmental analyses enables the firm to select the best option for the success and
growth of the firm.
9. cONsTANT MONITORING Of REsOURcEs :
Continuous monitoring of resources is a systematic and ongoing process
that uses automated tools and technologies to monitor the performance and security
of an organization's systems and processes. This is helps businesses to detect
problems early, mitigate risks, and increase their overall resilience.
10. UsEfUl fOR ThE MANAGERs :
Marketing managers organize and manage marketing campaigns to raise
awareness of and generate demand for products and services. The marketing
manager useful for the designing, managing, and evaluating marketing campaigns.
11. PREDIcTION Of fUTURE :
A prediction of forecast is a statement about a future event or about future
data. Predictions are often, but not always, based upon experience or knowledge of
forecasters.

TEchNIQUEs Of ENVIRONMENT APPRAIsAl :

 ETOPAnalysis (Environmental Threats and Opportunity Analysis)
 SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats)
 PEST Analysis (Political, Economical, Socio-cultural and Technological Forces)
 MIchAEl PORTER’s fIVE fORcEs ANAlYsIs :
Five competitive Forces look at five key areas namely;
 Threat of New Entrants
 The bargaining power of Buyers
 The bargaining power of Suppliers
 The threat of Substitute Products
 Competitive rivalry
 MARKETING ENVIRONMENT
“Marketing Environment is the combination of external and internal factors and
forces which affect the company’s ability to establish a relationship and serve its
customers.”
“Environmental scanning is the process of gathering information about events
and their relationships within an organization's internal and external environments.”
“Internal Environment is the process of organization's culture, values,
attitudes, communication structure, leadership style, management systems, and
employee morale. It also includes the organization's resources, such as its financial
resources, physical resources, and human resources.”
“External environment refers to the outside influences and factors (Micro and
Macro factors) that affect business operations. The business environment factors
include competitive, political, technological, and economic factors. The factors affect a
business owner's decision and have particular characteristics.”
a. “Micro Environment is the externals factors or elements in a firm's immediate
environment which affect its performance and decision-making; these elements
include the firm's suppliers, competitors, marketing intermediaries, customers and
publics.”
b. “Macro environment is the set of external factors and forces, not controlled
by the company, that influence its development. It mainly includes demographic,
economic, cultural, technological, legal or political elements.”
12Ps in MARKETING MANAGEMENT :
12Ps in Marketing Management

7. Physical Evidence
1.Product 8. Performance
2.Price 9. Packaging
3.Place 10. Positioning
4.Promotion 11. Perception
5.People 12. Partnership
6.Process
5Ms in MANAGEMENT :
5Ms in Management

5Ms in Business Management 5Ms in Marketing Management

1. Men 1. Mission
2. Money 2. Money
3. Material 3. Message
4. Method 4. Media
5. Machine 5. Measurement

INTERNAl ENVIRONMENT
“Internal Environment is the process of organization's culture, values, attitudes,
communication structure, leadership style, management systems, and employee morale.
It also includes the organization's resources, such as its financial resources, physical
resources, and human resources.”
INTERNAl ENVIRONMENT :
Internal Environment 7. Company Policy, Rules and
(Controllable) Regulation.
1. Human Resources (5Ms) : 8. Organizational Structure :
(Mission, Money, Media, Message, (Formal and Informal)
Measurement) 9. Physical Resources and
2. Goods and Services. Technological Capabilities.
3. Corporate Success or Culture : 10.Top Management
(Purpose driven, Caring workplace, 11. Value System :
Result Oriented, Playful Work (Honesty, Self Respect, Self
Environment) Respect for others, Integrity,
4. Strategy. Servant Leadership, Loyalty)
5.Vission, Mission and Objective : 12. Labour Union.
(Economic, Social, Human, Organic, 13. Management Style :
Global) (Autocratic, Democratic,
6.Various Departments : Persuasive)
(Marketing, HR, Finance, Operation,
Account, Production,
Administration)
 External Environment
(Uncontrollable ) (Impact of Micro and Macro environmental on marketing decisions)

Micro Environment
Macro Environment
1. Suppliers
2. Customers
1. Demographic
3. Company 2. Economic
4. Society 3. Social –Cultural
5. Competitors 4. Technological
6. Middlemen 5. Political and Legal
7. Consumer 6. Ethical
8. Public 7. Physical or Natural
9. Trade Union
8. Government
10.Stakeholders
11.Trade Association
12.Communities
13.Employees
14.Marketing
Intermediaries
15.Market or Demand
16.Local Government
17.Industry
1. DEMOGRAPhIc ENVIRONMENT :
Demographic environment is a term used by marketers to describe the
characteristics of a population that can be used to influence the success of a
business or commercial venture. The most important demographic factors for
businesses include age, sex, income level, race, employment, location,
homeownership, and level of education.
2. . EcONOMIc ENVIRONMENT :
The term economic environment refers to all the external economic factors that
influence buying habits of consumers and businesses and therefore affect the
performance of a company. These factors are often beyond a company's control, and
may be either large-scale (macro) or small-scale (micro). Economic factors, such as
unemployment, exchange rates, inflation, wages, and supply and demand.
3. sOcIAl-cUlTURAl ENVIRONMENT :
The socio-cultural environment in a broad sense consists of the social system and
culture of a nation. The system is stated as an intangible element that may affect
behavior, relationships, perceptions and ways of life, survival and the presence of a
person in the society. Examples include social classes, religious norms, wealth
distribution, language, business and health practices, social values and attitude
towards work.
4. TEchNOlOGIcAl ENVIRONMENT :
Technological environment refers to the changes in the output, production
methods, use of equipment and quality of the product. It includes force related to
scientific innovations and improvements in products as well as production
technology. Some examples of the technological environment include disruptive
technologies, artificial intelligence, new production processes, and machine
learning.
5. POlITIcAl-lEGAl ENVIRONMENT :
The political-legal environment is a combination of a lot of factors such as the
current political party in power, the degree of politicization of trade and industry, the
efficiency of the current government, government policies, current legal framework,
the public attitude towards the economy, taxation, political stability, and employment
laws etc.
The Legal Environment of Business includes various legislations, laws,
schemes, administrative orders by governmental authorities, judicial
precedents, decisions by various commissions and agencies of the governments,
etc.