Classification of market environment
Internal
External
marketing policies and strategies adopted by the company based on their own marketing philosophy
4Ps
Price
Production
Place
Promotion
can also be members, employees, finance or HR department
this is beyond the control of the company
Micro
Macro
refers to elements or forces that affect the business directly
beyond the control of the company and affects the company indirectly
Suppliers
Customers
Intermediaries
Demographic
Legal
Natural
Ecological
External Environment (Macro)
Demographic Forces
before setting up a business, one should gather demographic information
demography refers to studying the population in terms of density, size, gender and race.
this is important because these constitute the potential market for the company
Examples
Babies: demand for toys, baby foods, accessories
Younger Audience: Cosmetics, Designer Fashionable goods and lifestyle goods
Changing habits, taste and preferences provide direction to marketers
Demography is important as it helps to divide the population into target markets
Natural Forces
includes natural resources used as an input that affects their marketing activities.
concern
shortage of raw materials
air pollution
land pollution
noise pollution
ability for a company to make the product becomes increasingly difficult
pollution casuses social cost
sociologists and ecologists asses this social cost, this affects the company's reputation if they company is indulging in actions that are damaging the environment.
to maintain ecological balance the marketer has to keep this in mind
Control the environmental consequences of the product by adopting green production
Following the environmental criteria while deciding on product ingredients, design and packaging
Respond to issues raised by the environmentalists and consumerists
Technological Forces
one of the fastest changing factors in the macro-environment
Technological environment refers to the state of technology in areas of production, manufacture, construction or mining,
Advances in technology
greater productivity
low cost of production
higher quality
requires high capital investment
may lead to unemployment where men are replaced by machines.
due to which, labour unions oppose the introduction of new technology
increasing trend of e-commerce because of easier availability of information
marketers must constantly observe and keep track of competition and customer wants
Socio-Cultural Forces
includes basic beliefs, values and institutions
this determines the value system of the environment
this affects the marketing efforts
sociological aspects like caste, customs and culture
have far reaching influence on business
Example
Industrialization
employment of women in factories and offices have increased
people's attitudes towards food and clothing have also changed.
code of conduct a business should follow
if a business practices unethical practices, the government will intervene to discipline it.
if a company isn't paying fair wages to traders, trade unions and the government will intervene