This document analyzes the marketing environment and provides examples of key factors that must be considered. It discusses both the microenvironment including suppliers, customers, competitors, and publics. It also examines the macroenvironment such as demographic trends, economic conditions, natural resources, technology, political landscape, and cultural values that influence marketing strategies. Understanding how these various forces interact is important for adapting to changes in the external environment.

1. ANALYZING MARKETING
ENVIRONMENT

2. Xerox invented photocopying and for decades
flat out dominated the industry it had created.
But Xerox’s harrowing experience provides a
cautionary tale of what can happen when a
company – even a dominant market leader -
fails to adapt its changing marketing
environment.

3. Xerox has rethought,
redefined, and
reinvented itself. The
company now
―connects closely with
customers in a content
rich digital
marketplace.‖

4. Two disciplined methods
 Marketing Intelligence: The systematic Collection and
analysis of publicly available information about
consumers, competitors and developments in the
marketing environment.
 Marketing Research: The systematic Design,
collection, analysis and reporting of data relevant
to a specific marketing situation facing an
organization.

5. Marketing Environment?
 The actors & forces outside marketing that affect
marketing management’s ability to build and
maintain successful relationships with target
customers.

6. Actors close to the company that affect its ability
to serve its customers.
MICRO ENVIRONMENT

7. MICRO ENVIRONMENT

8. The Company
 Top Management
 Finance
 Research & Development
 Purchasing
 Operations
 Accounting

9. Suppliers
 Provide resources needed by the company to
produce its goods & services.
 Treated as Partners in creating & Delivering
customers value.

10. Marketing Intermediaries
Firms that help
company to
promote, sell
and distribute
its goods to
final buyers.

11. Marketing Intermediaries
Resellers
Physical
Distribution
Firms
Marketing
Service
Agencies
Financial
Intermediaries

12. Competitors
To be successful,
a company must
provide greater
customers value
& satisfaction
that its
competitors do.

13. Publics
 Any group that has an actual or potential interest in
or impact on an organization’s ability to achieve its
objectives.
 Financial Public
 Media Public
 Government Public
 Citizen Action Public
 General Public
 Internal Public

14. CUSTOMERS
Consumer Markets
Business Markets
Resellers Markets
Government
Markets
International
Markets

15. Consists of broader forces that affect the actors
in the microenvironment.
MACRO ENVIRONMENT

16. MACRO ENVIRONMENT

17. Demographic Environment
 The study of human populations in terms of size,
density, location, age, gender, race, occupation and
other statistics.

18. Demographic Environment
 Increasing Population
 ―1 Bn population in Asia will move to cities in next 20
years.‖ Haruhiko Kuroda, President Asian Development
Bank.
 Rapid growth in urban population in Asia
 In India, urban population to rise to 523 million by
2025
Source: Marketing Whitebook 2007-08, Businessworld, p.84

19. Demographic Environment
 Growing Middle class
 McKinsey Global Institute (MGI) has divided the Indian
population into 5 economic classes
 Division based on real annual disposable income

20. MGI division of Indian Population
 Deprived households
 have an annual disposable income of less than Rs
90,000. The poorest economic class
 Mostly unskilled or semi‐skilled workers on daily wages
 Aspirers
 have an annual disposable income in the range of Rs
90,000 to Rs 200,000
 Spend most of their income on basic necessities
 Small‐time retailers, small farmers, etc.

21. MGI division of Indian Population
 Seekers
 have an annual disposable income between Rs 200,000
and Rs 500,000.
 Mostly white‐collar employees, mid‐level government
officials, newly employed postgraduates, medium‐scale
traders.
 Strivers
 have an annual income ranging from Rs 500,000 to Rs
1,000,000. Have a stable income source and access to
amenities
 Mostly professionals such as lawyers, CAs, senior
government officials, rich farmers

22. MGI division of Indian Population
 Global Indians
 have an annual disposable income in excess of Rs
1,000,000 Creamy layer in society
 Globe‐trotters with a high standard of living

23. Demographic Environment
 Growth in the rural population
 A changing family system
 The changing role of women
 Increasing diversity

24. Economic Environment
 Factors that affect consumer buying power and
spending patterns.
 Global Financial Crisis
 Changing Income Distribution and consumer spending
patterns.
Ernst Engel—Engel’s Law
 As income rises: The percentage spent on food declines
 The percentage spent on housing remains constant
 The percentage spent on savings increases

25. Natural Environment
 Involves the natural resources that are needed as
inputs by marketers or that are affected by
marketing activities.
 Shortages of raw materials
 Increased pollution
 Increase government intervention
 Environmentally sustainable strategies

26. Technological Environment
Robotic surgery
Miniature
Electronics
Laptops, Computers
and Internet
Credit Cards
Televisions
Automobile

27. Political Environment
 Laws and Government agencies that influence and
limit various organizations and individual in a given
society.
 Laws covering issues like
 Competition
 Fair Trade practices
 Environmental Protection
 Product Safety
 Consumer Privacy etc.

28. Cultural Environment
 Institutions and other forces that affect society’s
basic values, perceptions, preferences and
behaviors.