Marketing Management

Unit I Section3 Part 1

MIS, Data Warehousing, Data Mining &
Marketing Environment

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 What we will learn in this
Section
• What are the components of a modern marketing
information system?
• What are useful internal records?
• What is involved in a marketing intelligence system?
• The need of environmental scanning.
• How external micro environment affects the company’s
strategies.
• The influence of external macro environment on
company’s plans.
• The difference between the external macro and micro
environment.
• The role of organization’s internal environment in dealing
with opportunities and threats. 2
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 Need for environmental
scanning
• Identifying the opportunities that company
has in immediate future.
• Identifying the threats faced by the
company.
• Demand forecasting
• Developing appropriate business plans.
• Adjusting the company strategy in
changing competitive environment.

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Marketing Environment

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 Environmental Forces
• Demographic
• Economic
• Socio-Cultural
• Natural
• Technological
• Political-Legal

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 Population and Demographics
• Household
• Growth rate
patterns
• Size
• Regional
• Age distribution characteristics
• Ethnic mix • Movement
• Educational
levels
•

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 Age Structure in India (Urban)
• 0–14years:30.8%(male173,478,760
 /female163,852,827)

• 15–64 years: 64.3% (male

363,876,219/female 340,181,764)
• 65 years and over: 4.9% (male
27,258,020/female 26,704,405)

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 Aging of the Population
• Populations age for two key reasons
– Birth rate is declining
– Life expectancy is rising
• The aging population has concerns:
– Wellness
– Financial well-being
– Safety and security
– Recreational needs
•
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 Geographic Redistribution
• Geographical redistribution
separates different
generations in different
space and time zones
– Increases gaps both within
and between generations
• People living in different areas
of the country reflect
different values, lifestyles,
and attitudes
– Regional marketing responds
to and feeds the differences
by exposing newly arrived
residents to regional tastes

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 Economic Environment

• Purchasing Power
• Income
Distribution
• Savings Rate
• Debt
• Credit Availability
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 Economic Forces
Stages in the Business Cycle
Prosperity Low unemployment and high total income
create high buying power
Recession Rising unemployment reduces total buying
power; consumer and business spending
decline
Depression Unemployment extremely high, wages and
total disposable income are very low, and
there is a lack of consumer confidence
Recovery Economy is moving out of recession or
depression towards prosperity
 Economic Forces (cont’d)
Buying Power


• Resources, such as money,

goods, and services, that can be
traded in an exchange
• Income
– Disposable income (After Tax)
– Discretionary income (Income
available for spending or saving
after buying the basic
necessities)
• Wealth
 Economic Forces (cont’d)
Willingness to Spend


• An inclination to buy because of expected

satisfaction from a product, influenced by the
ability to buy and the numerous
psychological and social forces
• Expectations influencing the willingness to
spend:
– Future employment
– Income levels
– Prices
– Family size
– General economic conditions (e.g.,
rising prices)
The Increasing Middle Class & Neo
Rich
• Four key implications:
– An increasing range in
prices of products
– More customer militancy
– Affordability
– The neo rich

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 Improvement of Downtrodden
• Two distinct
implications:
– Segmented
markets
– Cultural
diversity

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 Political Forces
Reasons for Maintaining Relations with
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Elected Officials and Politicians

• To influence the creation of laws and
regulations affecting industries and
specific businesses
• Governments are potentially large
customers
• Political officials can assist in securing
foreign markets
• Campaign contributions of corporate-
related individuals and political action
committees may provide influence
• Lobbyists work to communicate
businesses’ concerns about issues
affecting their industries and markets
 Legal and Regulatory Forces
Procompetitive Legislation


• Laws designed to:

– preserve competition
– prevent the restraint of trade and the
monopolizing of markets
– prevent illegal competitive trade
practices
Consumer Protection Legislation


• Laws enacted to protect customers from:

– adulterated and mislabeled food and
drugs
– deceptive trade practices and the sale
of hazardous products
– the invasion of personal privacy and the
misuse of personal information by
firms
 Natural Environment
• Shortage of raw
materials
• Increased energy costs
• Global warming
• Anti-pollution pressures
• Governmental
protections

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 Technological Environment
• Pace of change
• Opportunities for
innovation
• Varying R&D budgets
• Increased regulation of
change

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 Pace of Change
• The time taken to reach the same level
of penetration
– Radio: 38 years
– Telephone: 25 years
– Cable television: 10 years
– Internet: Less than 5 years
Did You Know this about USA?

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Digi Home

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Marriage Proposal

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 Socio Cultural Environment
• Effects of the working
women trend:
– A significant change in
the resources of a
household
• Time shortage: lack
of free time
• Time shift: the time
when nonwork-
related activities
may be pursued
– A shift in the lifestyle of
families
• With both spouses
working,
households have 42
turned into
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 Examining and Responding to
the Marketing Environment
Environmental Scanning


• The process of collecting information about

forces in the marketing environment
– Observation
– Secondary sources
– Market research
Environmental Analysis


• The process of assessing and interpreting the

information gathered through environmental
scanning
– Accuracy
– Consistency
– Significance
 Examining and Responding to the
Marketing Environment (cont’d)
Responding to Environmental Forces


• Reactive approach
– Passive view of environment as
uncontrollable
– Current strategy is cautiously
adjusted to accommodate
environmental changes
• Proactive approach
– Actively attempts to shape and
influence environment
– Strategies are constructed to
overcome market challenges and
take advantage of opportunities
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 What we learnt in this Unit
• What are the components of a modern marketing
information system?
• What are useful internal records?
• What is involved in a marketing intelligence system?
• The need of environmental scanning.
• How external micro environment affects the company’s
strategies.
• The influence of external macro environment on
company’s plans.
• The difference between the external macro and micro
environment.
• The role of organization’s internal environment in dealing
with opportunities and threats
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