•“Marketing Environment includes the actors and forces that affect management’s ability to build and maintain successful relationships with target customers”. •These factors may be- –Controllable: which the company can control –Non-controllable: which the company can monitor and respond.

1. Today you have to run
faster to stay in same place
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Dr. Amitabh Mishra

2. • “Marketing Environment includes the actors and
forces that affect management’s ability to build and
maintain successful relationships with target
customers”.
• These factors may be-
– Controllable: which the company can control
– Non-controllable:which the company can monitor and respond.
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3. Types of Marketing Environment
• Marketing environment may be-
1. Controllable or Micro-environment: Includes the actors/forces
close to the company that affect its ability to serve its customers.
2. Non-controllable or Macro-environment: Involves larger societal
forces that affect the whole microenvironment and are beyond the control
of company .
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4. The Marketing Environment
Company
Demographic
Economic
Natural
Technological
Political
Cultural
Company
Customers
Intermediaries
Suppliers
Competitors
Publics
MICRO
MACRO
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Dr. Amitabh Mishra

5. Controllable/ Internal or
Micro-environment
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6. • Companies and their suppliers, intermediaries, customers,
competitors and public all operate in macro-environment of
forces that shape opportunity and pose threat.
• Micro-environment may include-
a) Company
b) Suppliers
c) Market intermediaries
d) Customers
e) Competition
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7. Company
• Marketers must consider other parts of the organization
including finance, R&D, purchasing, operations and
accounting
• Marketing decisions must relate to broader company goals
and strategies
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8. Suppliers
• The suppliers provide the resources needed to
produce goods and services. Like- Raw material,
Energy, Labour, Capital etc.
• Marketers must watch supply availability and pricing.
• Effective partnership relationship management with
suppliers is essential
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9. Market intermediaries
• Marketing Intermediaries help the company to promote,
sell, and distribute its goods to final buyers.
• It is the channel through which a company link with
customers.
• It include-
– Manufacturer,
– C & F agent,
– Distributer, wholesaler,
– Retailer,
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10. Customers
 “Customers are the Public that generates the
demand”
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11. Competition
• Demand for a firm’s products or services is also affected by
nature and intensity of competition.
• Conducting competitor analysis is critical for success of the
firm.
• A marketer must monitor its competitors’ offerings to
create strategic advantage.
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12. Non-controllable/
External or Macro-Environment
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13. Types of Macro-Environment
• Within the rapidly changing global picture the company
must monitor six major forces of marketing environment-
1. Demographic Environment
2. Economic Environment
3. Natural Environment
4. Socio-cultural Environment
5. Technological Environment
6. Political-legal Environment
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14. 1. Demographic Environment
• Demographic environmental forces which the marketers must monitor
includes-
a) Population growth (World, cities, regions, nations).
b) Population-age mix
c) Ethnic market
d) Educational group
e) Household pattern
f) Geographical shift in population
• This will define the demand of particular segment.
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15. a. Population Growth
• World population is showing explosive growth.
• The growing population does not mean growing
markets unless these markets have sufficient
purchasing power.
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16. • Population explosion is major concern for marketers
because of two reasons-
– Several resources which are essential for the survival of
human being (fuel, food and minerals) are limited and
may run out at some point of time.
– The population growth is highest in the countries and
communities that can least afford it.
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17. b. Population Age mix
• National population vary in their age mix.
• A population can be divided in to six age groups-
i. Pre-school.
ii. School age children
iii. Teens
iv. Young adults age 25 & 40
v. Middle age adults age 40 & 65
vi. Older age adults age 65 & above.
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18. Source: CIA World Factbook
World Demographics 2009
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19. c. Ethnic Markets
• Countries vary in ethnic and racial makeup.
• Example- In Japan almost every one is
Japanese. Whereas in USA, people come
form all the nations.
• Each ethnic group has certain specific
wants and buying habits
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20. d. Educational group
• The population in any society falls into five
educational group-
i. Illiterate
ii. High school drop outs
iii. High school degree
iv. College degree
v. Professional degree
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21. e. Household Pattern
• Household pattern of nation’s population may
be-
i. Traditional
ii. Non traditional or diverse
• Traditional household consist of husband,
wife and children (Sometimes grandparents)
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22. • In USA one out of eight households are non traditional.
• Non traditional consist of-
– Single live-alones
– Adults live- together of one or both sexes
– Single parent families
– Childless married couples
– Empty nest
• More people are divorcing or separating, choosing not
to marry, marrying later, or marrying without intention
to have children
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23. f. Geographical shift in population
• This is a period of great migratory movements between
and within country.
• As foreign group enter other country, some local group
start protesting.
• Population movement also occurs as people migrate
from rural to urban areas and then to suburban areas.
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24. • Forward looking companies and entrepreneurs take
advantage of growth in immigrant population.
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25. 2. Economic Environment
• Marketers require people as well as purchasing
power.
• Economic forces that affect marketing
environment include-
a) Income distribution
b) Saving, debt and credit availability
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26. a. Income distribution
• Nations vary in level and distribution of income
and industrial structure-
• There are four types of industrial structures-
i. Subsistence economies
ii. Raw material exporting economies
iii. Industrializing economies
iv. Industrial economies
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27. • Subsistence economies-
• In Subsistence economies-
– The vast majority of people engage in simple agriculture,
– Consume most of their outputs, and
– Barter the rest for simple goods and services.
• These economies offer only few opportunities to
the marketer.
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28. • Raw material exporting economies are rich in one or
more natural resources but poor in other respects.
• Much of their revenue comes from exporting these
resources.
• These countries are good market for-
– Excavating equipments,
– Tools and supplies;
– Material handling equipments; trucks etc.
• They are also market for western style commodities and
luxury goods
• Example- Saudi Arabia (Oil)
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29. • In an Industrializing Economy, manufacturing begins to
account for 10% to 20% of GDP.
• As manufacturing increases the country relies more on
imports of raw materials, steel, and heavy machinery and less
on imports of finished textiles, paper products and processed
foods.
• Industrialization creates a new rich class and a small but
growing middle class, both demanding new types of products.
• EX- India, Philippines, Egypt etc.
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30. • Industrial economies are major exporters of
manufactured goods and investment funds.
• They buy manufactured goods from one another and
also export them to other type of economies in
exchange for raw material and semi furnished goods.
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31. • Technology is one of the most dramatic force which change
people life.
• Every new technology is a force of “creative destruction”.
i.e. it creates many new marketing opportunities but also
turns many existing products extinct.
• New technology creates major long run consequences that
are not always foreseeable.
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3. Technological Environment

32. • The marketers must monitor following trends in
technology
1. Accelerating pace of change
2. Unlimited opportunities for innovation
3. Varying R&D budgets
4. Increased regulation of technological change
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33. • Marketing decisions are strongly affected by
developments in Political & Legal Environment.
• Politics or the governing bodies have great
influence over market environment.
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4. Political-legal Environment

34. • Pattern of government (like Social, Capitalistic &
Communist) these are the kind of rules It is composed
of-
– Laws
– The policies
– Tax and tariffs are deciding factors
– Government agencies
– Pressure groups
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35. • Society shapes our beliefs, values, and norms.
• People absorb, almost unconsciously a world view
that defines their relationship to-themselves, to
others, to organizations, to society, to nature and
to universe.
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5. Social-Cultural Environment

36. • Socio-cultural environment determines how society,
– Views of themselves
– Views of others
– Views of organizations
– Views of society
– Views of nature
– Views of universe
• Some other characteristics of interest to marketers are-
– The persistence of core cultural values
– The existence of subculture.
– Shift of values through time.
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37. • Natural Environment involves the natural resources that
are needed as inputs by marketers or that are affected by
marketing activities.
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6. Natural Environment

38. • Marketers need to study the trends in natural environment
as-
• Shortages of raw materials
• Increased pollution
• Increased government intervention
• Increased energy cost
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