Marketing Environment by Rajesh Ande

8/8/2019 Marketing Environment by Rajesh Ande

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The market environment refe rs to all of theforce s out sid e of ma rket ing that affe ctma rket ing ma nageme n t s ab ility to bu ild and ma inta in success ful relat ions h ips with ta rgetcustome rs. The ma rket e nvir onme n t consis ts of both the ma croe nvir onme n t a nd the

m icroe nvir onme n t .


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The m icroe nvir onme n t refe rs to the fo rce s that a re close to the com pany and affe ct its ab ility to se rve its custome rs. It inc lude s thecom pany itself, its supp lie rs , ma rket ing inte rme diarie s, custome r ma rket s,com pet ito rs , and publ ics.


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The com pany asp ect of m icroe nvir onme n t refe rs to the inte rn al e nvir onme n t of the com pany. This inc ludes all departme n ts, such a s ma nageme n t,

f inanc e, resea rch a nd develo pme n t, purcha sing ,ope rat ions and accou n t ing. Each of the sedepartme n ts ha s an impact o n ma rket ing decisions. For exam p le, resea rch a nd

develo pme n t ha ve inp ut a s to the featu res apr oduct can pe rform a nd accou n t ing appr oves the f inanci al sid e of ma rket ing p lans and bu dg et s.


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The supp lie rs of a com pany are al so a n importa n t a sp ect of the m icroe nvir onme n tbe cau se e ven the slighte st delay in rece iving supp lies can re sult in custome r diss at isfact ion. Ma rket ing ma nage rs mu st wat ch supp lyava ilab ility a nd othe r trends deal ing withsupp lie rs to e ns ure that pr oduct w ill bedel ive red to custome rs in the t ime f ramerequ ired in ord e r to ma inta in a strong custome r relat ions h ip.


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Ma rket ing inte rme diaries refe rs to reselle rs , physicaldis t ribut ion f irms, ma rket ing se rvices agencies, a nd f inancial inte rme diaries. The se a re the peo p le that hel p thecom pany pr omote, sell, a nd dis tribute its pr oducts to f inal

buye rs. Reselle rs are tho se that hol d and sell the com pany s pr oduct . They mat ch the dis tribut ion to the custome rs and inc lude p laces such a s Wal-Ma rt, Ta rget, a nd Best Buy. Physical dis tribut ion f irms are p laces such a s wa rehou ses that sto re a nd t ransp ort the com pany s pr oduct f rom its origin to its dest inat ion. Ma rket ing se rvices agencies arecom panies that offe r se rvices such a s cond uct ing ma rket ing resea rch, a dve rt ising , a nd cons ult ing. Financialinte rme diaries are ins t itut ions such a s ba nks , creditcom panies and ins uranc e com panies.


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A nothe r asp ect of m icroe nvir onme nt is the custome rs. The re a rediffe rent ty pe s of custome r ma rket s inc luding cons ume r ma rket s,bu sin ess ma rket s, gove rn me nt ma rket s, inte rn at ional ma rket s, a nd re selle r ma rket s. The cons ume r ma rket is ma de u p of individ ual s who buy goo ds and se rvice s for the ir ow n pe rsonal u se o r use in the ir hou sehol d. Busin e ss ma rket s inc lude tho se that buy goo ds and se rvices for use in producing the ir ow n products to sell. This is diffe rent f rom the re selle r ma rket wh ich inc lude s bu sin esse s thatpurcha se goo ds to re sell a s is for a prof it . The se a re the samecom panies me nt ioned as ma rket inte rme diarie s. The gove rn me ntma rket consis ts of gove rn me nt a gencie s that buy goo ds to produce

publ ic se rvice s or trans fer goo ds to othe rs who nee d them . Inte rn at ional ma rket s inc lude buye rs in othe r cou ntries and inc ludes custome rs f rom the pr eviou s cate gorie s


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C om pet ito rs are al so a fa cto r in them icroe nvir onme n t a nd inc lude com panie s with sim ilar offe rings for goo ds and se rvice s. To rema in com pet it ive a com pany mu stconsid e r who the ir b igge st com pet ito rs arewh ile consid e ring its ow n size a nd posit ion in

the ind ustry. The com pany shoul d develo p astrate gic advan ta ge o ve r the ir com pet ito rs


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The f inal a sp ect of the m icroe nvir onme nt is publ ics, wh ich is any grou p that ha s an inte rest in or impact o n the o rganizat ion s ab ility to meet its goal s. For exam p le, f inancial publ ics can hind e r a com pany s ab ility toobta in funds affe cting the le vel of credit a com pany ha s. Me dia publ ics inc lude new sp ape rs and ma gazines that can publ ish a rticles of inte restregarding the com pany and edito rials that may influe nc e custome rsopini ons. Gove rn me nt publ ics can affe ct the com pany by passing legislat ion and laws that put restric tions on the com pany s actions. C it izen-action publ ics inc lude e nvir onme ntal grou ps and m inority grou ps and can que stion the a ct ions of a com pany and put them in the publ ic sp otl ight . Local publ ics are ne ighbo rhoo d and commu nity o rganizat ions and will alsoque stion a com pany s impact o n the lo cal a rea a nd the le vel of

resp onsibility of the ir act ions. The gene ral publ ic can greatly affe ct thecom pany as any cha nge in the ir att itu de, whethe r posit ive o r negat ive, can cau se sale s to go u p or dow n be cau se the gene ral publ ic is ofte n thecom pany s custome r ba se . A nd f inally, the inte rn al publ ics inc lude alltho se who a re em ploye d with in the com pany and deal w ith theorganizat ion and cons truct ion of the com pany s pr oduct .


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The ma croe nvir onme n t refe rs to all fo rce s thatare part of the la rge r society a nd affe ct them icroe nvir onme n t . It inc lude s conc ep ts suchas demo graphy, e conomy, natu ral fo rce s,te chnolo gy, polit ics , and cultu re .


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D emo graphy refe rs to stu dying huma n populat ions in te rms of size,densi ty, lo cat ion , a ge, gend e r, race, a nd occupat ion. This is a ve ryimporta nt fa cto r to stu dy for ma rkete rs and hel ps to divid e thepopulat ion into ma rket segme nts and ta rget ma rket s. A n exam p leof demo graphy is classi fying grou ps of peo p le a ccording to the yea r they we re bo rn. The se classi f icat ions can be refe rred to a s babyboome rs , who a re bo rn betwee n 1946 a nd 1964, gene rat ion X, whoare bo rn betwee n 1965 a nd 1976, a nd gene rat ion Y, who a re bo rn betwee n 1977 a nd 1994 . Each classi f icat ion ha s differentcha racte ris t ics and cau se s they f ind importa nt . This can bebe nef icial to a ma rkete r as they can decide who the ir product

woul d be nef it mo st a nd ta ilor the ir ma rket ing p lan to att ract thatsegme nt . D emo graphy cove rs ma ny asp ects that a re importa nt toma rkete rs inc luding fam ily dynam ics , geo graphic shifts, wo rk forcecha nge s, and levels of dive rsi ty in any given area .


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A nothe r asp ect of the ma croe nvir onme n t is theeconom ic envir onme n t . This refe rs to the purcha sing powe r of pote n t ial custome rs and the way s in wh ichpeo p le sp end the ir mo ney. With in th is area a re twodiffe ren t e conom ies, sub siste nc e a nd ind ust rialized. Subsis te nc e e conom ie s are ba sed mo re in agricultu reand cons ume the ir ow n ind ust rial out put . Ind ust rialeconom ies ha ve ma rket s that a re dive rse a nd carr y

ma ny diffe ren t ty pe s of goo ds. Each is importa n t to thema rkete r be cau se ea ch ha s a h ighly diffe ren t sp ending patte rn as well a s diffe ren t dis tribut ion of wealth .


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The natu ral e nvir onme nt is anothe r importa n t fa cto r of thema croe nvir onme n t . This inc ludes the natu ral resou rces thata com pany u ses as inp ut s and affe cts the ir ma rket ing act ivit ies. The conc e rn in th is area is the incr ea sed

pollut ion , sho rta ges of raw mate rials and incr ea sed gove rn me n tal inte rven t ion. A s raw mate rials be comeincr ea sing ly scarce r, the ab ility to create a com pany s pr oduct get s mu ch ha rd e r. A lso, pollut ion can go a s far as negat ively affe ct ing a com pany s reputat ion if they a reknow n for dama ging the e nvir onme nt . The la st conc e rn ,gove rn me n t inte rven t ion can ma ke it incr ea sing ly ha rd e r for a com pany to fulf ill the ir goal s as requ ireme n ts getmo re st ring en t .


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The te chnolo gical e nvir onme n t is pe rha ps one of thefaste st cha nging facto rs in the ma croe nvir onme n t . This inc lude s all develo pme n ts f rom a n t ibiot ics and surge ryto nuclea r m issiles and chem ical wea pons toautomob iles and credit cards. A s the se ma rket s develo p it can create new ma rket s and new u ses for pr oducts. It also requ ires a com pany to stay ahea d of othe rs and upd ate the ir ow n te chnolo gy as it be come s

out date d. They mu st stay informe d of t rends so theycan be part of the next b ig th ing , rathe r tha n be com ing out date d and suffe ring the cons eque nc e s f inancially.


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The polit ical e nvir onme n t inc ludes all law s,gove rn me n t a gencies, and grou ps that influe nc e o r lim it othe r organizat ions and individ ual s with in asociety . It is importa n t fo r ma rkete rs to be awa re of the se re st ric t ions as they can be com p lex. Somepr oducts are regulate d by both state a nd fede ral law s. The re a re e ven re st ric t ions for some pr oducts as towho the ta rget ma rket may be, fo r exam p le, cigarette s shoul d not be ma rkete d to you ng e r childr en. The re a re

also ma ny re stric t ions on subl im inal me ssage s and mo nopolie s. A s law s and regulat ions cha ng e ofte n , th is is a ve ry importa n t a sp ect fo r a ma rkete r to mo nito r.


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The f inal a sp ect of the ma croe nvir onme n t is thecultu ral e nvir onme n t, wh ich consis ts of ins t itut ions and ba sic value s and bel ief s of agrou p of peo p le . The value s can also be fu rthe r cate gorized into core bel ief s, wh ich passed on f rom gene rat ion to gene rat ion and ve ry diff icultto cha ng e, a nd second ary bel ief s, wh ich te nd tobe ea sie r to influe nc e . A s a ma rkete r, it is

importa n t to kn ow the diffe renc e betwee n thetwo a nd to fo cus you r ma rket ing cam pa ign torefle ct the value s of a ta rget au dienc e


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Whe n deal ing with the ma rket ing envir onme n t it is importa n t fo r a com pany tobe come pr oa ct ive . By do ing so, they can create the kind of e nvir onme n t that they w illpr osp e r in and can be come mo re eff icien t byma rket ing in area s with the greate st custome r pote n t ial. It is importa n t to p lace equalem pha sis on both the ma cro a nd m icroe nvir onme n t a nd to rea ct a ccording ly tocha ng e s with in them


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The exte rn al e nvir onme n t can be au di te d in mo re deta il using othe r appr oa che s such a s SWOT A nalysis , M ichael Po rte r's Five Fo rce s A nalysis or PEST A nalysis.


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PURPOSE OF MA RKETINGENVIRONMENTA NA LYSIS

To kn ow whe re the e nvir onme n t is hea ding; toob se rve a nd size u p the rele van t e ven ts and trends in the e nvir onme n tTo disc e rn wh ich e ven ts and trends arefavou rable f rom the sta nd po int of the f irm . A nd wh ich a re u nfavou rable ; to f igure out theopp ortu ni t ie s and th reat s h idd en in theenvir onme n tal e ven ts and t rends.


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To pr oje ct how the e nvir onme n t-ea ch fa cto r of theenvir onme n t-w ill be at a futu re po int of t ime .To asses the scope of variou s opp ortu nit ie s and

sho rtlist tho se that can favou rably impact the bu sin e ssTo hel p secure the right f it betwee n the e nvir onme n tand bu sin e s unit, wh ich is the crux of ma rket ing; tohel p the bu sin e ss uni t re sp ond with mat ch ing pr oduct-ma rket st rate gies; to fa cilitate fo rmulat ion of ama rket ing st rate gy in the right way- in line w ith thetrends in the e nvir onme n t a nd the o pp ortu nit ies eme rging the re in.


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D ivision of ma rket ing Envir onme n t

Me ga /Ma cro e nvir onme n t

Envir onme n tal fa cto rs sp ecif ic to the bu sin ess conc e rn ed


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Me ga /Ma cro e nvir onme n t

D emo graph ic Envir onme n tSocio-C ultu ral e nvir onme n tEconom ic envir onme n tPolit ical e nvir onme n tNatu ral e nvir onme n tTechnolo gy envir onme n tLegal e nvir onme n tGove rn me n t policies


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Envir onme n t that is sp ecif ic to thebu sin ess

The ma rket/ dema ndThe cons ume r

The ind ustryThe com pet it ionGove rn me n t policies (sp ecif ic to the bu sin ess

conc e rn ed)Supp lie r-relate d facto rs


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D emo graph ic Envir onme n t


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Marketing Environment by Rajesh Ande