MARKETING MANAGEMENT

Chapter 2
UNDERSTANDING THE MARKETING ENVIRONMENT

Chapter 2 Understanding the Marketing Environment

Definition and Concepts

A companys marketing environment consists of the actors and forces outside marketing that affect managements ability to build and maintain successful relationships with target customers. (Philip Kotler) The microenvironment consists of the following actors close to the company that affect its ability to serve its customers: (1) The company (2) The suppliers (3) The marketing intermediaries (4) The customer markets (5) The competitors (6) The public.
The macro environment consists of the following larger societal forces that affect the microenvironment: (1) Demographic (2) Economic (3) Natural (4) Technological (5) Political (6) Legal (7) Cultural.
Marketing Management Dr. K. Karunakaran

Himalaya Publishing House

Chapter 2 Understanding the Marketing Environment

Microenvironment

Macro environment

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran

Chapter 2 Understanding the Marketing Environment

Opportunities
Examples of Opportunities Posed by Marketing Environment in India 1. The New Economic Policies of the Government of India in general. 2. The New Industrial Policy. 3. Liberalisation of industrial licensing. 4. Foreign Exchange Regulation Act (FERA) and Monopolies and Restrictive Trade Practices Act (MRTP) liberalization. 5. Curtailment of and disinvestments in public sector. 6. The New Trade Policy lowering of import tariffs, abolition of import licenses, convertibility of rupee, globalisation, etc. 7. Fiscal and monetary reforms, banking sector reforms, capital market reforms. 8. Removal or phasing out of subsidies. 9. Encouragement to foreign direct investment (FDI). 10. Dismantling of price controls and introduction of market-driven price environment.

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran

Chapter 2 Understanding the Marketing Environment

Threats
Examples of Threats Posed By Marketing Environment In India 1. Entry of Multi-National Companies (MNCs) into the Indian market on a large scale increases the competition for products and services. 2. Survival of the fittest rule forces many weaker and small-scale companies to close down due to non-viability. 3. Big players start buying smaller players through mergers and acquisitions. 4. Removal of subsidy affects profitability and viability of many industries. (Fertiliser industry is one such affected sector where units had to close down or stop products of certain products). 5. Banks and insurance sector came under competitive environment and were compelled to operate viably, at par with the private sector. 6. In general, many industrial units across India faced a destabilization consequent to the economic reforms. Their markets, market shares and profits came under severe pressure and viability became a big question.

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran