MARKETING ENVIRONMENT

Marketing Environment

Part of the External environment of the firm

consisting of variables confronting the firm

The company has little or no control over these

variables
MARKETING ENVIRONMENT VARIABLES

1. Social Forces
2. Economic Forces
3. Technological Forces
4. Competitive Forces
5. Regulatory Forces
Social Forces

Is an important factor that affects marketing strategy

Includes the following:

Characteristics of the People
Its Income
Its Values
Social Forces
Characteristics of the People

May be derived through demographics

Demographics provide information on where people

are, their numbers, age, sex, income an
occupation
Social Forces
Income of the People

Provides clue as to what they can afford and as such,

adjustments have to be made on various marketing
activities affected
Social Forces
Culture

Is a social force which must be considered by marketers

Consists of the set of values, ideas and attitudes of a

group of people and are transmitted from one
generation to another
Economic Forces

Consists of factors that affect consumers purchasing and

spending power
2 important macroeconomic conditions that marketers must
consider in making decisions:
Inflation reduce purchasing power of consumers
Recession unemployment tend to rise
Technological Forces

Rapidly changing force which creates many new marketing

opportunities but also turns many existing products extinct

It provides mechanical, physical and numerous other

processes which help in attaining higher standard of living

Development in existing technology can make some products

obsolete and it makes marketing more challenging
Technological Forces

Marketing Activities where technology can be useful:

1. Generation of marketing information in retail

establishments
2. Development of new products
3. Understanding the consumer
Competitive Forces
Most business firms are confronted with competitors
In designing the firms marketing strategy, it must consider
its current and potential competitors.
Basic forms of Competition:
Pure Competition
Monopolistic Competition
Oligopoly
Monopoly
Basic forms of Competition
Pure Competition
Is that market situation where there are many competitors offering
sale identical products or services
The price of the product is determined by market & not by individu
al buyer and seller
Characterized by following:
1. Firm sells similar products.
2. Easy for prospective sellers to engage in selling and for
prospective buyers to engage in buying
3. Many buyers and sellers who fully know the market
Basic forms of Competition
Monopolistic Competition
Exists when there are many sellers (but less than those of pure
competition) in a particular market competing each other

Manufacturers often promote certain features of their products,

then charge higher prices

Is the most ideal for marketers who want to use the marketing mix
in pursuit of profit objectives of their respective firms
Basic forms of Competition
Oligopoly
Is that market situation where a few firms compete in a given industry
The products sold are homogeneous or identical
Prices are set by oligopolist in collusion with one another
Examples:
Gasoline
Steel
Automobiles
Cement
Cigarette
Basic forms of Competition
Monopoly
Exists when there is only a single seller in a particular market

Include firms that supply electricity and water

Government regulates the prices of some monopolies like public

utilities
Basic forms of Competition
Relevance of Marketing Mix in Various Competitive Situation

Competitive Situation Relevance of Marketing Mix

Pure Competition Irrelevant
Monopolistic Competition Most Relevant
Oligopoly Slightly Relevant
Monopoly Irrelevant
Regulatory Forces
Government institutions are entities that constrain, direct and infl
uence decisions that the business firms have to make including
marketing
Laws enacted by national government and local ordinances by p
rovincial and municipal government are those that restrict busin
ess activities
Restrictions are designed for the following purposes:
To protect the consumers from unsafe products and un
fair trade practices
To ensure business competition and fair trade practices