Marketing environment refers to the forces that affect marketing decisions and ability to build and maintain profitable

customer relationship. Microenvironment refers to the environmental forces close to the company that combine to make up the value delivery network and affects the ability to serve its target customers. Environmental elements which are external to the marketing management, largely uncontrollable, potentially relevant to the decision making and changing and constraining in nature.

Marketing Environment

Micro environment: Elements

The company Suppliers The marketing intermediaries Customers Competitors Publics Supporting organizations

The Company
Top management sets the company mission, objectives and goals, Marketing formulates marketing plan under the set mission to achieve the organizational objectives; Finance department is responsible for sourcing and using funds to carry out the marketing plan, R & D focuses on designing safe and attractive products, Purchasing concerned with ensuring the supplies in time, Operations concerned with producing products with desired quality and quantity, Accounting has to compute costs and revenues.

Supplier
Link in the companys overall value delivery network. Provide materials to produce goods and services Shortage of supply or delays might affect the customer satisfaction and company image, profitability.

Intermediaries
Promote, sell, and distribute its goods and services Represent the company to the ultimate customers. Build and maintain profitable customer relationships.

Customers
Types of customers: Individual household customers who buy goods and services for personal or household consumption. Business markets buy goods and services for further processing or for use in their production process. Resellers buy goods and services to resell at a profit through creating place utility in particular. Government markets are made up of government agencies that buy goods and services to produce public utilities, or transfer of goods and services to others who need these

Competitor
Provide benchmark Sources of motivation Threats Affect Marketing program

Public
Financial publics influence the companys ability to obtain funds. Banks, stockholders, investment houses are the major financial publics. Media publics carry news, features, editorials and opinion. News papers, magazines, radio and television channels are the media publics. Citizen action groups: Companys marketing practices and decisions may influenced by the activities of socially active groups like environmental groups, consumer association etc. Local publics include neighbors, local community. Internal publics include employees, managers, directors, and people concerned with the management of the company.

Supporting Organizations
Educational Institutions Research organizations Logistics providers Utility service providers

Macro environment: Elements

Demographic Environment Social-Cultural Environment Economic Environment Technological Environment Political & Legal Environment Natural Environment

Why study macro environment ?

The marketing process begins with assessing needs, problems and opportunities. Maintaining a superior product market fit requires blending the controllable and uncontrollable variables into an effective marketing program. Survival and sustainable growth of the company mostly depend on keeping customers satisfied. Increased complexity in making decisions and managing marketing efforts effectively. Rule of game in marketing is changing. Success depends on the effective management and mastering of these changes favorably.

Demographic Environment
Population Growth Household pattern Population Age Mix Ethnic and other markets Educational Groups Occupation Geographical distribution

SocialSocial-cultural Environment
Lifestyle:
People lead busy life. Husband and wife working Values: Values shape consumer behavior. People belong different values like individualism, fashion crazy, tradition bound, folk loving, tremendous interest to newness, aesthetic and home decor items. Shift in values in many cases creates new business opportunities while posing threats to others.

Economic Environment
Levels of economic development i) Subsistence ii) Raw-materials exporting iii) Industrializing economy iv) Industrialized economy Income i) Personal Income ii) Income distribution iii)Disposable income iv)Discretional income Spending pattern

Technological Environment
Marketer should monitor the following trends in technology: i) Accelerating pace of change ii) Unlimited opportunities for innovation: iii) Varying R & D budgets: iv) Increased regulation of technological change

Political Environment
Legislation Regulating Business Privatization Pollution control act creates opportunity for the pollution control technology and devices. Fiscal policy and tax laws may provide incentives to new industries. Economic Liberalization

Natural Environment
Marketers need to be aware about the four trends in natural environment: Shortage of raw materials: Increased energy costs encourages the development of i) alternative sources of energy like solar, nuclear and other forms of energy, ii) more efficient ways to use the energy means, fuel efficient operating system and consumer items. Increased pollution levels Changing role of government