Birat Shrestha

MMKT 221
FUNDAMENTALS OF
MARKETING
BBA, Hons/Emph
KUSOM
August 2019
2. ANALYZING THE MARKETING
ENVIRONMENT
MARKETING ENVIRONMENT
The actors and forces outside
marketing that effect marketing
management’s ability to build and
maintain successful relationship
target customers
 MARKETING ENVIRONMENT ANALYSIS
 Marketers must be environmental trend trackers and
opportunity seekers
 Marketing environment analysis
 Research and marketing intelligence
 Customer and competitor environment analysis

 Marketers adapt strategies to meet new marketplace

challenges and opportunities
MARKETING ENVIRONMENT TYPES
• Micro-Environment

• Macro-Environment
COMPANY’S MICRO-ENVIRONMENT
 Micro-Environment – The actors close
to the company that affects its ability to
serve its customers and controllable to
some extent
 The Company
 Suppliers
 Marketing Intermediaries
 Customers
 Competitors
 Publics
THE COMPANY
 Company Groups
 Top Management – sets mission, objectives,
strategies, and policies
 Marketing
 Finance
 Research and Development
 Purchasing
 Operations
 Accounting

 All functions must – “Think Consumer”

SUPPLIERS
 Suppliers form an important link in the
company’s overall value delivery system
 They provide the resources needed by the
company to produce goods and services
 Supplier cost, delivery time, supply
quality can affect marketing activities
MARKETING INTERMEDIARIES
 Firms that help the company to promote, sell,
and distribute its goods to final buyers
 Physical Distribution Firms
 Resellers and Distributors
 Wholesalers

 Retailers

 Cash and Carry

 Wal-Mart, Big Bazaar, Shoppers Stop, Pantaloon

 Marketing Services Agencies – Ad Agencies

 Financial Intermediaries – banks
 The resellers can dictate the purchase terms
 The resellers also help establish the product
 Companies treat them as partners
CUSTOMERS
 Customer Relationships
 Consumer Markets – individual and households
 Business Markets – goods and services for further
processing and for production process
 Reseller Markets – goods and services to resell at a
profit
 Government Markets – goods and services to
produce public services who need them
 International Markets – buyers in other countries
including consumers, producers, resellers, and
governments
COMPETITORS
 Analysing the offerings from competitors
 Delivering superior value and greater customer
satisfaction than the competitors
 Gaining strategic advantage by positioning the
offerings strongly against competitors’ offerings
in the minds of the consumers
 Developing winning strategies
PUBLIC
 Any group that has an actual or potential
interest in or impact on an organisation’s ability
to achieve its objectives
 Financial Publics – banks, investment houses
 Media Publics – editorial opinion, magazines, TV
 Government Publics – product safety, truth in Ads
 Citizen-Action Publics – environmental groups
 Local Publics – neighborhood residents, community
 General Publics – peoples’ attitude toward products
 Internal Publics – workers, managers, BOD
COMPANY’S MACRO-ENVIRONMENT
 Macro-Environment – The larger societal forces
that affect the microenvironment which are
uncontrollable to a larger extent
 Demographic Environment
 Economic Environment
 Natural Environment
 Technological Environment
 Political Environment
 Social Environment
 Cultural Environment
DEMOGRAPHIC ENVIRONMENT
 Demography - the statistical study of human population
 Size, Gender Ratio and Age Mix
 Occupation and Education
 Religion and Race
 Population Growth Rate
 Social Class Structure
 Increasing Population and Growing Middle Class
 Growth in Rural Population – income, infrastructure
 Changing Family System – joint, nuclear, DISK (Duel-
Income-Single-Kid) Families – affects demand types
 Changing Role of Women – career orientation
 Educated, Professional Population – white collar
products
 Increasing Diversity – Japan (Japanese) and USA
(Mixed Races) – diverse product range requirements
 ECONOMIC ENVIRONMENT
 Economic Environment – consists of factors
that affect consumer purchasing power and
spending patterns
 Industrial, Subsistence, and Developing
Economies
 Affordability factors and product adaptations
 Economic Trends and Events
 The Global Financial Crises – interrelated and
dependent economies, FDIs
 Changing Income Distribution and Consumer
Spending Patterns
 People shifting their spending across food,
housing, transportation, health care, and other
goods and services categories as family income
rises – Engel’s Law
 Remittance effect
 Emergence of new consuming class – affluent,
luxury segments
 NATURAL ENVIRONMENT
 Natural Resources that are required as
inputs by marketers or that are affected by
marketing activities
 Natural Resources – minerals, crude oils,
vegetation
 Pollution Levels – air, water, disposal,
chemical wastages, non-biodegradable
packaging materials
 Raw Materials – availabilities and shortages
 Government interventions in natural
resource management
 Recycling Requirements and Renewable
Resources
 Strategies for “Environmental Sustainability”
 TECHNOLOGICAL ENVIRONMENT
 Technological advances are the most dramatic
forces affecting today’s marketing strategies
 Technological Forces that create new
technologies, creating new product and market
opportunities – Internet, Online Marketing
 Technological environment changes rapidly
 New technology creates new markets and
opportunities
 RFID (Radio Frequency Identification) – used by
Wal-Mart to manage its inventories with
suppliers
 One technology hurts another industry
 Transistors hurt Vacuum-Tube Industry
 Digital Photography hurting Film Industry
 iPod hurting Walkman
 Xerography hurting Carbon Paper Industry
 POLITICAL ENVIRONMENT
 Government laws and government agencies
 Pressure groups
 Tariff and quota regimes
 Legislation regulating business
 Public policy – laws and regulations to control business activity for the
good of society
 Increasing legislation – competition, fair trade practices, product
standard, protecting companies and consumers, and interest of society
 Changing government agency enforcement –new commissions,
enforcing laws and acts
 New forms of nontariff barriers – WTO
SOCIAL ENVIRONMENT
 Socially responsible behavior
 “Do the right thing” – going beyond regulatory system
 Protecting long-run interests of consumers and
environment
 Protecting customer information and privacy
 Developing policies, guidelines, to Corporate Social
Responsibility (CSR)
 Cause related marketing
 Linking to worthwhile causes
 Sponsoring medical research projects
 Aligning with NGOs and INGOs
 “Do well by doing good”
 Participating in social cause
 CULTURAL ENVIRONMENT
 Forces that affect society’s basic values,
perceptions, preferences and behaviors
 Persistence in cultural values
 Core beliefs and values that are not changed
 Shape specific attitudes and behaviors
 Passed from parents to children and reinforced by
schools, religious institutions, business, governments
 Shifts in secondary cultural values
 Secondary beliefs and values are more open to change
 People’s view
 Materialism Vs spiritualism
 Self-realisation through religion or seeking fun,
pleasure, change, escape, adventure, careers
 “Do-it-yourself” type – home improvement products
 Cocooning – staying at home types
 Patriotism, ethnocentrism and use of foreign brands
 “Lifestyles of health and sustainability” – organic
products, hybrid cars
RESPONDING TO THE MARKETING
ENVIRONMENT
 Reactive Marketing (companies can passively
accept the marketing environment as an
uncontrollable element to which they must adapt
avoiding threats and taking advantage of
opportunities as they arise)
 Proactive Marketing (companies working to
change the environment rather than simply
reacting to it)
THANK YOU/BEST WISHES
Questions/Answers