Module 2

Marketing Environment

Learning objectives

1. Understand the Marketing environment-micro and macro

2. Services: Importance, distinctive characteristics of services, service mix

Marketing Environment

The actors & forces outside marketing that affect marketing management’s ability to build & maintain successful relationships with target customers

Micro & Macro environment

Micro environment- The actors close to the company that affect its ability to serve its customers– the company, suppliers, marketing intermediaries, customer markets, competitors & publics

Micro LevelMicro LevelInfluences that affect a particular firmInfluences that affect a particular firm

Micro environment

Marketing

The company

Suppliers

MarketingInterme-diaries

customers

competitors

Publics

Macro Environment

The larger societal forces that affect the microenvironment- demographic, economic, natural, technological, political & cultural forces

Macro LevelMacro LevelInfluences that affect all firmsInfluences that affect all firms

Macro Environment

Company

Demographic forces

Economic forces

Naturalforces

Technologicalforces

Politicalforces

Culturalforces

Demographics

People MakePeople MakeMarketsMarkets

Characteristics of Characteristics of PopulationsPopulations

SizeSize

DistributionDistribution GrowthGrowth

Economic Factors

People withPeople withMoney to SpendMoney to Spend

and Willing toand Willing toSpend itSpend it

Stage of the Stage of the Business Business

CycleCycle

InflationInflationInterestInterest RatesRates

Competition

Rivals Rivals for Customers’for Customers’

Limited Limited Buying PowerBuying Power Substitute Substitute

ProductsProductsEveryEvery

CompanyCompany

BrandBrandCompetitionCompetition

Differential AdvantageDifferential Advantage

Social and Cultural Forces

People MakePeople MakeMarketsMarkets

BeliefsBeliefs

Socio-culturalSocio-culturalPatternsPatterns

Changing QuicklyChanging Quickly

ValuesValues LifestylesLifestyles

Social and Cultural Changes

Concern forConcern for Natural EnvironmentNatural Environment

Quality notQuantity

Changing Gender RolesChanging Gender Roles Two Incomesand Balance

Physical Fitness andPhysical Fitness andHealthHealth

Exercise and Diet

Premium on TimePremium on Time Convenience

Political and Legal Forces

Monetary Monetary and and

Fiscal PoliciesFiscal Policies

GovernmentalGovernmentalRelationship Relationship

with with IndustriesIndustries

Social LegislationSocial Legislationandand

RegulationRegulation

LegislationLegislation RelatedRelated

totoMarketingMarketing

Technology

Affects HowAffects HowMarketing isMarketing isCarried OutCarried Out

Altering Altering ExistingExisting

IndustriesIndustries

Impacts lifestyles, Impacts lifestyles, consumption patterns,consumption patterns,

economic well-beingeconomic well-being

StartingStartingNewNew

IndustriesIndustries

StimulatesStimulatesMarketsMarkets

and and Other IndustriesOther Industries

Operating Environment

Services marketing

A large number of business organizations offer services – airlines, banks, hotels, insurance companies, consulting firms, medical & law practices, entertainment companies, real estate firms, financial services firms, retailers etc

7ps- 4ps + people, physical evidence and process

Product Services Continuum

Mostly goods Mostly services

Canned goods Automobiles Hotels Air travel InsuranceConsulting

teaching

Nature & characteristics of services

Service intangibility- Services cannot be seen, tasted, felt, heard or smelled before they are bought

Service inseparability- Services are produced & consumed at the same time & cannot be separated from their providers

Service variability- Services quality may vary greatly, depending on who provides them & when, where & how

Service perishability- Services cannot be stored for later sale or use

The service profit chain1. Internal service quality2. Satisfied & productive service employees3. Greater service value4. Satisfied & loyal customers5. Healthy service profits & growth