Topic The Marketing Environment Sherlock Holmes asked Dr

Topic The Marketing Environment

Sherlock Holmes asked Dr. Watson “ How many steps led up to baker street Apartment. He said I Don’t Know You see but you do not observe 3 -2

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Marketing Environment § Includes: – Micro environment: actors close to the company that affect its ability to serve its customers. – Macro environment: larger societal forces that affect the microenvironment. • Considered to be beyond the control of the organization. 3 -4

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Retail Stores Copyright 2007, Prentice Hall, Inc. 3 -11

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Low Cost carriers Copyright 2007, Prentice Hall, Inc. 3 -14

Nissan Brings back Datsun with Go Car § http: //www. usatoday. com/story/money/ cars/2013/07/15/datsun-go-nissanindia/2518257/ Copyright 2007, Prentice Hall, Inc. 3 -15

http: //www. cokesolutions. com/Pages/defau lt. aspx Copyright 2007, Prentice Hall, Inc. 3 -16

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Actors in the Microenvironment

The Company’s Macroenvironment

Demographic Environment § Increasing population – Rapid growth in urban population in Asia – In India, urban population to rise to 523 million by 2025 – A growing middle class – Division based on real annual disposable income: Deprived households , Aspirers Seekers , Strivers , Global Indians

Demographic Environment § Baby Boomers: post-WW-II – – – . 78 million born between 1946 and 1964. Equal 28% of population. Earn more than 50% of all personal income. Almost 25% belong to racial or ethnic minority. Spend a lot on anti-aging products and services. Are likely to postpone retirement. the first two Baby Boomer presidents, Presidents William J. Clinton and George W. Bush, both born in the first year of the Baby Boom, 1946 3 -25

Demographic Environment § Generation X: – 45 million born between 1965 and 1976. – Defined by shared experiences: • Increasing divorce rates. • More of their mothers employed. – Cynical of frivolous marketing pitches. – Care about the environment. – Prize experience, not acquisition. 3 -26

Demographic Environment § Generation Y: – 72 million born between 1977 and 1994. – Have large amount of disposable income. – Comfortable with computer technology. – Tend to be impatient and “Now-Oriented. ” – Many product lines targeted at those who are part of Generation Y: • Teen and young adult games • Clothes, furniture, food § § Titan introduced range of sunglasses – Fast track http: //www. youtube. com/watch? v=YCp. I 2 m. X--RA http: //www. youtube. com/watch? v=Nks. WT 1 ig. TGU 3 -27

– Role of woman – 50% of population , has changed which resulted into whole range of new products-ready to cook, ready-mixes, cooking range, chapatti-maker, washing machine, vacuum cleaner, iron, ready-to-eat cereal – http: //www. youtube. com/watch? v=H_R 5 D 4 c. Pm. C 0 – Top priority to the family, and families continue to maintain strong kinship bonds and ties. Washing Machines , Kurkure , MDH Masala Ad’s giving total family picture and Love , e. g. the Vicks. Vaporub story, Magi noodles – carry on Jaani, Yeh Mom Made hai - Rasna (weaving core Indian values into marketing) http: //www. youtube. com/watch? v=v. KRSQx_Hef. Q&feature=fvwrel - Young children more influential about choice of http: //www. youtube. com/watch? v=LEYl. DGa 6 o. N 8 3 -28

Political Environment § Includes laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. § Areas of concern: – Increasing legislation. – Changing government agency enforcement. – Increased emphasis on ethics and socially responsible behavior. 3 -29

Political-Legal Environment Govt. Intervention in the industry is reality § § § In India , food companies need approval to launch brands that duplicate what already exists in market, such as another cold drink , or a brand of rice. It is mandatory all veg. Items carry green dot and non- veg carry red dot. In India all packaged products should have the maximum retail price or MRP on the package. Auto Industries had to introduce expensive emission controls in the car – Euro II compliance In India , Delhi the state Govt. Implemented the rule that public transportation vehicles like auto rickshaws and buses use only compressed Natural Gas ( CNG) as a fuel instead of Diesel and petrol RBI in India is in process of formulating guidelines to credit card companies , keeping in mind the interest of consumers 3 -30

Economic Environment § Consists of factors that affect consumer purchasing power and spending patterns. § India’s economy has been showing vibrancy and growth from 1991 ever since the Govt. initiated programs to ease Govt. Controls on industry and commerce. § GDP- 5%-2009 § The global financial crisis of 2007– 2009 has affected the consumption and production of many products-subprime housing loans § Value marketing involves ways to offer financially cautious buyers greater value —the right combination of quality and service at a fair price 3 -31

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Changing consumption pattern of Indian consumer § Indian consumer going major transformation § Lifestyle products § Shopping basket has increased Tata Nano Captured India’s growing Middle class The Marketing strategy for companies needs to be focused on the opportunities that economic growth spins off. 3 -33

Natural Environment § Involves natural resources that are needed as inputs by marketers or that are affected by marketing activities. § Factors include: – Shortages of raw materials. – Increased pollution. – Increased government intervention. – Environmentally sustainable strategies. 3 -34

Natural Environment § Companies into environmentally friendly products § Green Marketing § E. g Air (prevention and control of pollution) Act 1981 insists that “ Eco Marks” label in consumer products are environmental friendly § § § Tata-Green cars , green buildings Wal-Mart plans to work with suppliers to make products that are 25 percent more energy-efficient over the next three years. GE Ecomagination to create products for better world 3 -35

Technological Environment § § § Most dramatic force shaping our destiny. Changes rapidly. Creates new markets and opportunities. Challenge is to make practical, affordable products. Safety regulations result in higher research costs and longer time between conceptualization and introduction of product. Accelerating pace of change – personal computers , digital wristwatches , video recorders , fax machines , internet § Unlimited opportunities of innovations-AID cures , happiness pills , painkillers , robotics , safe contraceptives , nonfattening foods , fantasy products like flying cars , 3 -D TV’s § Dell , HP , Apple and Microsoft with “smart” mobile phones § Less risk innovations like freeze-dried coffee , combination shampoos , conditioners , antiperspirants and Deo’s 3 -36

Cultural Environment § The institutions and other forces that affect a society’s basic values, perceptions, preference, and behaviors. – Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government. – Secondary beliefs and values are more open to change. • Marketers may be able to change secondary beliefs, but NOT core beliefs. 3 -37

Cultural Environment Shifts in Secondary Cultural Values § People’s view of themselves – Yankelovich Monitor’s consumer segments: • Do-it-yourselfers—recent movers • Adventurers – Master card “There are some things money cant buy for everything else there is Master card” http: //www. youtube. com/watch? v=Pe 5 XSm. Mmt. P 8 § People’s view of others – More “cocooning” – going out less and staying home”

Cultural Environment Shifts in Secondary Cultural Values § § People’s view of organizations People’s view of society – National emotions http: //www. youtube. com/watch? v=sclt. YH 13 u. EY http: //www. youtube. com/watch? v=6 dd. JNRWJr. Mc – Patriots defend it – Reformers want to change it – Malcontents want to leave it

Cultural Environment Shifts in Secondary Cultural Values § § § People’s view of nature LOHAS (Lifestyle of health and sustainability)-41 million in US, spends $215 billion – Some feel ruled by it – Some feel in harmony with it – Some seek to master it – Global market by 2020 $102 million – GOI has earmarked Rs. 1 billion for the promotion of sustainable Agriculture in tenth five year plan (2002 -2007) People’s view of the universe – Renewed interest in spirituality: Channels like Aastha

Views on Responding Uncontrollable • React and adapt to forces in the environment Proactive Reactive • Aggressive actions to affect forces in the environment • Watching and reacting to forces in the environment