Download - 3 understanding the marketing environment
Understanding the Marketing Environment
Session 2
Why environment scan?
• “If the rate of change inside a company is less than the rate of change outside a company, then the end is in sight”
Jack Welch, ex CEO, GE
Elements of the environment scan
• Environment monitoring or scanning is defined as the process of gathering information regarding a firms external environment, analyzing it and forecasting its impact on the company’s business.
• External environment…..uncontrollable element• Internal environment……controllable element
External environment
• Macro elements…those which affect all firms in the industry
• Demographics
• Economic conditions– Global– Domestic
• Cultural issues
• Political
• Micro elements…those which relate to a specific firm• Suppliers
• Customers
• Intermediaries
• Competition
External elements impacting company’s marketing program
Co’s marketingprogram
Demographics
Economicconditions
Competition
Technology
Social &cultural
Political & Legal
Demographics
Years
Age group2001 2006 2011 2016
0 – 14 366(35.6) 262(32.5) 355(29.7) 343(27.1)
15 – 59 598(58.2) 673(60.4) 747(62.5) 811(64)
60+ 65(6.3) 78(7) 94(7.9) 113(8.9)
Age distribution & projection of Indian population, in millions.
Statistical outline of India, 2003-04, Jan 2004, Tata Services Ltd.
Characteristics of population
• Size• Distribution…age, sex, rural-urban• Growth…absolute, sectors• Profile & character…nuclear family, working
women, youth, literacy, BPL
EDUCATION LEVEL
OCCUPATION
Illiterate School upto 4 yrs/lit but no formal education
Schooling
5-9 yrs
SSC/HSC Some college
but not graduate
Graduate/
post graduate, general
Graduate/ postgraduate
professional
Unskilled worker E2 E2 E1 D D D D
Skilled worker E2 E1 D C C B2 B2
Petty trader E2 D D C C B2 B2
Shop owner D D C B2 B1 A2 A2
Businessman/industrialist with nos. of employees….none
D C B2 B1 A2 A2 A1
Businessman/industrialist with nos. of employees….1-9
C B2 B2 B1 A2 A1 A1
Businessman/industrialist with nos. of employees….10+
B1 B1 A2 A2 A1 A1 A1
Self employed professional D D D B2 B1 A2 A1
Clerical/salesman D D D C B2 B1 B1
Supervisory level D D C C B2 B1 A2
Officer/Executive….. junior C C C B2 B1 A2 A2
Officer/Executive….. senior B1 B1 B1 B1 A2 A1 A1
Socio-Economic classificationBased on education & occupation of the chief wage earner
Impact of the environment
• Affects buying behavior• Demographic shifts
– Children, teens, youth, women– Disposable surpluses– Emergence of the rural markets
• Social & cultural changes– Lifestyle changes– Values and beliefs– Time poor society– Working women
• Technological impact– Concern for the natural environment– Tech savvy generation– E-marketing
Impact of the external environment
• Variables are– The firm’s market
• The changes taking place
• Emergence of new markets
• Maturing of the markets
– The suppliers• Competitiveness
• Quality consciousness
• New generation
– The intermediaries• Source of revenue
• Avenue of market reach & presence
The challenge
• External elements……uncontrollable • Internal elements……..controllable
– Supporting functions like production, finance, HR, R&D, Image– Marketing variables…the 4 P’s & the 7P’s
• Concept of Marketing Mix