1. 1] MARKETING ENVIRONMENT

2. MARKETING ENVIRONMENT
“Marketing Environment can be defined as the internal or external
factors that affects the marketing strategies of a particular organization or
goods and services.”
It basically refers to factors and forces that affect a firm’s ability to build
and maintain successful relationships with customers.
There are three levels of Marketing Environment, which are as follows :
Micro Environment- small forces within a company that affect its ability
to serve its customers.
Meso Environment- the industry in which a company operates and the
industry’s market.
Macro Environment- larger societal forces that affect the micro
environment.

3. MARKETING
ENVIRONMENT
DEMOGRAPHIC
ENVIRONMENT
ECONOMIC
ENVIRONMENT
SOCIAL-
CULTURAL
ENVIRONMENT
NATURAL
ENVIRONMENT
TECHNOLOGICAL
ENVIRONMENT
POLITICAL
ENVIRONMENT

4. DEMOGRAPHIC ENVIRONMENT
 WORLDWIDE POPULATION GROWTH:
The world population is growing at an explosive
rate. It is expected to exceed 7.9 billion by the year
2025. Moreover, population growth is higher in
countries which can least afford it. A growing
population does not mean growing markets, unless
these markets have sufficient purchasing power.
Nonetheless, companies that carefully analyze their
markets can find major opportunities.
 POPULATION AGE MIX:
National population vary in their age mix. Some
have a very young population while some have high
density of old population. A company will market its
products specifically to the greater population in a
specific country. For example, marketers will target
youth segments where the population is young.
Population mix can also be on the basis of literacy.

5. ECONOMIC ENVIRONMENT
INCOME DISTRIBUTION:
In an economy, developed or developing, the
income of people are unevenly distributed. Some fall
in the low level income category, while some in the
high level income category. Generally, in a
developing nation, the population with a low level
income is much higher than the high level. Therefore,
marketers carefully analyze under which income
criteria does their target segment fall and hence,
undertake their marketing strategies. Economic
Marketing Environment refers to the purchasing
power of potential customers and the ways in which
people spend their money.

6. SOCIAL - CULTURAL ENVIRONMENT
Society shapes the beliefs, values, and
norms that largely define consumer tastes
and preferences. People absorb, almost
unconsciously, a world view that defines
their relationships to themselves, to others,
to organizations, to society, to nature, and
to the universe. The diversity in the world
is not only restricted to topography but also
in the languages, cultures as well as
religious beliefs. In this era of
globalization, organizations cater to the
culture of each country where it functions
or operates.

7. NATURAL ENVIRONMENT
The deterioration of the natural
environment is a major global problem.
There is great concern regarding “green
house gases”, depletion of the ozone layer,
global warming and shortages of water. It
impacts the marketing in a large way as
consumers often appear conflicted about
product decisions that affect the natural
environment.
“Corporate Environmentalism” can be
defined as the recognition of the
importance of environmental issues facing
the firm and the integration of those issues
into the firm’s strategic plans.

8. TECHNOLOGICAL ENVIRONMENT
One of the most dramatic forces shaping
people’s lives is technology. Through the
years technology has released such
wonders like penicillin, open-heart surgery,
submachine gun, etc. It also released
mixed blessing such as cell phones and
video games.
Every new technology is a force for
creative destruction. The number of major
new technologies discovered affects the
economy’s growth rate. Marketers should
monitor the regular trends in technology.

9. POLITICAL ENVIRONMENT
The political and legal environment consists
of laws, government agencies, and pressure
groups that influence and limit various
organizations and individuals. Sometimes
these laws also create new opportunities for
business.
Two major trends in the political environment
are:
 Increase in business legislation
 Growth of special interest groups

10. 2] GLOBAL MARKETING
ENVIRONMENT

11. The Demographic Environment
 The World population is showing explosive growth (totaled 6.1
billion in2001 and will exceed 7.9 billion by the year 2025).
 Growth rate : Developed Nations - 0.6%
Developing Nations - 2%
 Young population is more in Developing Nations and in South
Asia. So, marketers caters more to the youth segment.
 Literacy rate is growing at a high rate. Hence the consumers are
now more aware with new products and services.

12. Economic Environment
 As per World Bank, GDP of South Asia is estimated at
1.1Trillion (2.3%of world’s GDP)
 Growing at 8.6%per annum.
 But Per Capita GDP is low.
 Income level is rising but still large number of population is
under low level category.
 Most of the countries are now turning into free economy by
accepting liberalization.

13. Socio Cultural Environment
 Companies engaging in activities in different
countries also take care of the cultures, beliefs and
values of each country.
 Separate Marketing strategies are planned for
different cultures.
 For example McDonalds change its menu and
removed Beef to preserve the Indian culture.

14. Natural Environment
• In western Europe, “green” parties have vigorously
pressed for public action to reduce industrial
pollution.
• In the United States, Sierra club and Friends or the
Earth carry these concerns into political and social
action.
• The Soap Industry increased its products’
biodegradability.

15. Technological Environment
 Accelerating pace of change.
 Unlimited opportunities for innovation.
 Varying R&D Budgets.
 Increased regulation of technological change.

16. Political-Legal Environment
 Increase in Business Legislation.
 Less govt. intervention.
 Growth of Special interest Groups.
 Safety
 Information
 Choice
 Representation
 Redressal
 Consumer Education

17. 3] INDIAN MARKETING
ENVIRONMENT

18. Characteristics of 21st Century
 knowledge and information based society
 Global networking.
 High mobility of population from rural to urban areas.
 Increasing productivity.
 Reliance on innovation and creativity
 Conscious society-customer aware of his rights and
obligations.

19. Emerging Trends
 Emergence of trade blocked.
 Population explosion.
 Rapid technological changes.
 Social changes.
 Literacy levels.
 World as a global economic village.

20. Market Scenario
 The entire world is a boundary less global village
due to it telecom and transport revolution.
 Customers needs, wants, desires, values and ethics
are changing day by day.
 Customers want more options and alternatives.
 There is a shift from sellers market to buyers
market.

21.  Organisations have to look for their competitive
edges and develop on their strengths and explore
new opportunities.
 Organisations have to offer value added focused
services to attract customers.
CONT…

22. India's Strengths-marketing Prospective
• Huge resources both human and natural.
• Inflation under check.
• Stability of government irrespective of ideology.
• Capable of providing food to many nations.
• Matured democracy.
• Global it hub.

23. Weaknesses
 Population growth unchecked.
 Fiscal deficit.
 Inadequate infrastructure
 Slow judiciary.
 Complicated procedures and systems.
 Unexpected high level of unethical practices.
 R&D base is very low.
 27% population below poverty line.

24. 4] PESTEL ANALYSIS

25. ORGANIZATION
Political
Economic
Legal
Social
Technological
Environmental
PESTEL ANALYSIS

26. What is PESTELAnalysis?
PEST stands for the analysis of the external factors which is
beneficial when conducting research before beginning a new
project or to help conduct market research. It is a tool for
analyzing organization’s macro environment .
The origin of this framework is difficult to establish however
some data is available which refers to the ETPS environment by
Francis J. Aguilar. Later it was reorganized as STEP by Arnold
Brown(1967).
Later in 1980s several authors included variations from
taxonomy classifications and thus formed PEST or PESTLE
Analysis framework.

27. POLITICAL FACTORS
 Government policies
 Government terms and change
 Trading policies
 Pressure groups
 Funding, grants and initiatives
 Wars and conflict

28. ECONOMIC FACTORS
• Home economy situation and trends.
• Overseas economies and trends.
• General taxation.
• Taxation specific to product/services.
• Seasonal/weather issues.
• Market and trade cycles.
• Industry-specific factors .
• Market routes and trends.
• Customer/end-user drivers.

29. SOCIAL FACTORS
 Life trends.
 Demographics.
 Consumer attitudes and opinions.
 Media views.
 Law changes affecting social factors.
 Brand, company, technology image.
 Consumer buying patterns .
 Fashion and role models .
 Ethnic/religious factors

30. TECHNOLOGICAL FACTORS
• Competing technology development.
• Technological advancements.
• Research and development funding.
• Associated/dependent technologies .
• Replacement technology /solutions.
• Maturity of technology.
• Information and communications.

31. ENVIRONMENTAL FACTORS
• Environmental legislation.
• Public awareness of environmental issues.
• Political agenda on the environment.
• Consumer buying patterns.
• CSR awareness and expectations.

32. LEGAL FACTORS
 Current Legislation
 Future Legislation
 European/ International legislation
 Regulatory bodies and processes.

33. PESTEL ANALYSIS
of
RETAIL INDUSTRY

34. RETAIL INDUSTRY
Retail consists of the sale of goods or merchandise from a fixed
location, such as a department store, boutique or kiosk, or by mail, in
small or individual lots for direct consumption by the purchaser.
Retailing may include subordinated services, such as delivery.
Purchasers may be individuals or businesses. In commerce, a
"retailer" buys goods or products in large quantities from
manufacturers or importers, either directly or through a wholesaler,
and then sells smaller quantities to the end-user. Retail establishments
are often called shops or stores. Retailers are at the end of the supply
chain. Manufacturing marketers see the process of retailing as a
necessary part of their overall distribution strategy. The term "retailer"
is also applied where a service provider services the needs of a large
number of individuals, such as a public utility, like electric power.

35. PESTELANALYSIS OF RETAIL INDUSTRY
Environmental regulations and protection.
Tax policies.
Interest rates & monetary policies.
Contract enforcement law.
Consumer protection.
Employment laws.
Government organization / attitude.
Competition regulation.
Political Stability.
Safety regulations.
POLITICAL ECONOMICAL
Economic growth
Interest rates & monetary policies
Government spending
Unemployment policy
Taxation
Exchange rates
Inflation rates
Stage of the business cycle
Consumer confidence

36. Income distribution
Demographics, Population growth
rates, Age distribution
Labor / social mobility
Lifestyle changes
Work/career and leisure attitudes
Entrepreneurial spirit
Education
Fashion, hypes & Living conditions
Health consciousness & welfare,
feelings on safety
SOCIAL
Government research spending
Industry focus on technological effort
New inventions and development
Rate of technology transfer
Life cycle and speed of technological
obsolescence
Energy use and costs
Changes in Information Technology
Changes in Internet
Changes in Mobile Technology
TECHNOLOGICAL

37. Consumer buying behavior.
Buying pattern
Socio cultural effect on purchasing.
ENVIRONMENTAL
Retail industry sourcing and overseas
Corporate Social Responsibility.
Tax issue.
M & A expansion and consolidation.
LEGAL

39. INTRODUCTION
 Liberalization of economy for a country refers to set it
free it from direct or physical controls imposed by the
government.
 Economic reforms were based on the assumption that
market forces could guide the economy in a more effective
manner than government control.
Examples of one of other undeveloped countries like
Korea, Thailand, Singapore, etc. that had achieved rapid
economic development as a result of liberalization were kept
in consideration.

40. A Balance of Payments crisis in 1991 which pushed the
country to near bankruptcy.
The Rupee devalued and economic reforms were enforced
upon India.
India central bank had refused new credit and foreign
exchange reserves had reduced to the point that India
could hardly finance three weeks’ worth of imports.
CAUSES OF INDIAN LIBERALIZATION

41.  Elimination of industrial licensing and registration.
 Liberalizing the MRTP act.
 Freedom for expansion and production.
 Increase in the investment limit of the small industries.
 Freedom to import capital goods.
 Freedom to import technology.
 Free determination of interest rates.
ACTIONS TAKEN DURING LIBERALIZATION

42.  Gigantic Annual growth in GDP.
 A rate of growth that will double average income in a
decade.
 Rapid Growth in all manufacturing as well as service
sectors.
 Exports of information technology enabled services
predominantly strong.
ECONOMIC IMPACT OF LIBERALIZATION

43.  Increase in rate of economic growth.
 Increase in competitiveness of industrial sector.
 Reduction in poverty and inequality.
 Fall in fiscal deficit.
 Control on prices.
 Decline in deficit of BOP.
 Increase in Efficiency.
POSITIVE IMPACT OF LIBERALIZATION

44.  Less importance to agriculture.
 Pressure by IMF and World Bank.
 More depending on Foreign Debt.
 Dependence on Foreign technology.
 Undue importance to Privatization.
 Problem of Unemployment.
NEGATIVE IMPACT OF LIBERALIZATION

46.  Indian economy had experienced major policy changes
in early 1990s.
 The new economic reform, popularly known as,
Liberalization, Privatization and Globalization (LPG
model) aimed at making the Indian economy as fastest
growing economy and globally competitive.
 The series of reforms undertaken with respect to
industrial sector, trade as well as financial sector aimed
at making the economy more efficient.
INTRODUCTION

47.  The rate of growth of the GDP of India has been on the
increase from 5.6 % during 1980-90 to 7 % in the 1993-
2001 period.
 The cumulative FDI inflows from 1991 to September
2006 were Rs.1, 81,566 crores (US $ 43.29 Bn).
 In respect of market capitalization, India is in the fourth
position with $ 894 Bn after the US ($ 17,000 Bn)
 The foreign exchange reserves of India have enlarged.
EFFECTIVE IMPACTS