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The actors (suppliers, intermediaries, customers, competitors, publics and
Forces (demographic, economic, natural, technological, political, and cultural)
That affect (actors- that may work with or against the company
forces – shape marketing opportunities, pose threats)
Marketing management’s ability
to build and maintain successful relationships
With target customers.
Marketing research and mktg intelligence = collect information about mktg
Made up of
1. Micro environment
2. Macro environment
The actors close to the company that affect its ability to serve its customers –
the company, suppliers, marketing intermediaries, customer markets,
competitors, and publics.
These actors can be controlled by the company by its own actions,
and hence called controllable factors.
2. Macro environment:
The larger societal forces that affect the microenvironment – demographic,
economic , natural, technological, political, and cultural forces.
The forces which can not be controlled by the company with its own actions,
at least in the short run, also called uncontrollable factors.
The company’s Microenvironment:
Fig (Actors in company’s Microenvironment)
1. The Company:
In designing mktg plans,
Coordinate with other co groups- top management, finance, R&D etc.
Important in the co’s overall customer value delivery system.
3. Marketing Intermediaries:
Help the co to promote, sell, and distribute its products to final buyers.
Include: Resellers, physical distribution firms, marketing services agencies,
and financial intermediaries.
Distribution channel firms that help the co find customers or make sales.
b) Physical Distribution firms:
Help the co to stock and move goods from their points of origin to their
C) Marketing Services agencies:
Marketing Research firms, advtg agencies, media firms, and mktg consulting
d) Financial Intermediaries:
Banks, credit cos, insurance cos, and other businesses that help financial
The co must provide greater customer value and satisfaction than its
Gain strategic advantage by positioning.
Any group that has an actual or potential interest in
Or impact on an organization's ability to achieve its objectives.
a) Financial Publics:
Banks, investment houses, and stockholders.
The group which influences the co’s ability to obtain funds.
b) Media Publics:
News papers, magazines, radio and television stations.
This group carries news, features, and editorial opinion.
c) Government Publics:
Mgmt must take govt developments into account.
On issues of product safety, etc.
d) Citizen-action Publics:
A co’s mktg decision may be questioned by consumer orgns, environmental
groups, and others.
e) Local Publics:
Neighborhood residents and community orgns.
f) General Publics:
A co concern about the general public’s attitude towards its products and
g) Internal Publics:
Includes workers, managers, and board of directors.
Large cos use newsletters and other means to inform and motivate their
Five types of customer markets.
1. Consumer Markets: consist of individuals and households
2. Business Markets: for further processing or for use in their production
3. Reseller Markets: buy goods and services to resell at a profit.
4. Government Markets: Made up of government agencies to produce
public services or transfer them to others who need them.
5. International Markets: Consist of these buyers in other countries,
including consumer markets, producers, resellers, and governments.
The company’s Macro environment:
Six major forces:
Fig (Forces of company’s Macro environment)
1. Demographic Environment:
The study of human populations in terms of size, density, location, age,
gender, occupation, and other statistics.
It involves people, and people make up markets.
• Increasing Population
• A growing middle class
Indian population into five economic classes on the basis of their real
annual disposable income.
Deprived households: An annual disposable income of less than
Poorest economic class in the economy. Mostly unskilled and semiskilled
Aspirers: Annual disposable income between Rs.90,000/- to Rs.2,00,000/Spent almost half of their incomes on basic necessities.
Small time retailers, small farmers, and low-skilled industrial workers.
Seekers: Annual disposable income between Rs.2,00,000/- to
White-collar employees, mid-level government officials, newly-employed
post graduates etc
Strivers: Having an income range from Rs.5,00,000/- to 10,00,000/- per
Established professionals like lawyers, doctors, rich farmers, medium-scale
McKinsey Global Institute (MGI) report
Defines the middle class as combination of seekers and strivers.
• Growth in Rural Population
E.g., Project Shakti launched by HUL
• A Changing Family System
Double Income No kids (DINK)
Double Income Single Kid (DISK)
• The Changing role of women
• A Better-educated, More White-collared, More Professional Population
• Increasing Diversity
2. Economic Environment:
It consists of factors that affect consumer purchasing power and spending
• The Global Financial Crisis
• Changing Income Distribution and Consumer Spending Patterns
Engel’s Law: Differences noted over a century ago by Ernst Engel in how
people shift their spending across food, housing, transportation, health
care, and other goods and services categories as family income rises.
Findings of Engel’s Law:
Food, housing, and transportation use up the maximum household income.
As family income rises, the percentage spent on food declines,
The percentage spend on housing remains about constant (except for utilities
such as gas, electricity, and public services), and savings increase
Changes in major economic variables such as income, cost of living, interest
rates, and saving and borrowing patterns
Have a large impact on the market place.
3. Natural Environment:
Involves the natural resources that are needed as inputs by marketers or that
affected by marketing activities.
• Shortage of raw materials
• Increased pollution
• Increased government intervention
Green movement – concern for the natural environment
Cos are developing strategies and practices that support
environmental sustainability .
4. Technological Environment:
Forces that create new technologies, creating new product and market
5. Political and Social Environment:
Consists of laws, government agencies, and pressure groups that influence
and limit various organizations and individuals in a given society.
Legislation Regulating Business
Regulation can encourage competition and ensure fair markets for goods and
Increased Emphasis on Ethics and Socially Responsible Actions:
Socially Responsible Behavior:
“Do the right thing”.
Protecting the long-run interests of their consumers and environment.
To build more positive image.
E.g., P&G, ITC Classmate notebooks etc
“Do well by doing good”.
6. Cultural Environment:
It is made up of institutions and other forces that affect
A society’s basic values, perceptions, preferences, and behaviors.
Beliefs and values are shaped by a particular society in which people are
Core beliefs and values are passed on from parents to children and are
reinforced by schools, religious institutions, business, and government.
Secondary beliefs and values are more open to change.
Believing in marriage is a core belief; believing that people should get married
in early life is secondary belief.
Shifts in Secondary Cultural Values:
Although core values are fairly persistent, cultural shifts do take place, but
much more slowly.
Marketers track such values on a regular basis to explore opportunities.
The major cultural values of a society are expressed in
people’s views of themselves and others, as well as in their view of
organizations, society, nature and universe.
People’s View of themselves:
Some people seek personal pleasure, wanting fun, change and escape.
Other seek self-realization through religion, recreation, or pursuit of careers
or other life goals.
People use products, brands, and services as a means of self-expression.
Do-It-Yourself- Recent Movers: DIY attitude – Gen X – enjoy playing board and
card games with family and children.
Adventurers: Rarely follow a single path.
E.g., Master Cards – experience of lifetime – “There are some things in life
that money can’t buy. For everything else, there’s MasterCard”.
People’s views of others:
“Cocooning” – people are going out less with others and stay at home to
enjoy - networked home office, home theatres etc.
People’s view of Organizations:
To earn money to enjoy their non work hours.
People’s View of Society:
Patriotism-Independence day-to sell products and services.
People’s view of nature:
People’s Views of the Universe:
Materialism to spirituality.
E.g., Aastha Channel – religious discourses, yoga, and spirituality.
Responding to the Marketing Environment: