Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

BASICS OF MARKETING I

Session 4 : Understanding external environment

Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Learning objectives

• Understand the environmental forces influencing marketing decision making

• Understand the impact of key environmental forces on marketing decision making

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SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

External Environment

DemographicDemographic

SocialChangeSocial

Change

EconomicConditionsEconomicConditions

Political & Legal Factors/

Govt.

Political & Legal Factors/

Govt.TechnologyTechnology

CompetitionCompetition

EnvironmentalScanning

Target Market

ProductDistributionPromotion

Price

ProductDistributionPromotion

Price

External Environment is not controllable Ever-Changing

Marketplace

Ref: Marketing by Lamb

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SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Social Factors

ValuesValues

AttitudesAttitudes

LifestyleLifestyle

Social FactorsSocial

Factors

Ref: Marketing by Lamb

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SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Social factors

• Values : e.g. Strong family bondage, love for the family is a core value for the Indian market

• Attitudes : e.g. Role of women in family : User/buyer to decision maker

• Lifestyle : Indulging , making a statement, spend

vs. save

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SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Demographic

Age distribution: 62.3% of Indian population is between 15 years to 59 years age group

• The rising young population in India has given rise to the internet boom and e-commerce in the country.

• Boom in real estate market due to double income, young nuclear families

• Occupation and literacy profile: Socioeconomic (SEC) is a widely expected to classify the population

Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Ref: Marketing Management by Saxena

Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Demographic

• Shift in income levels : There has been increasing number of population with rising incomes. (Refer next slide for the different class of income groups)

• Geographical changes : e.g. migration to cities : Urban population has grown from 109.1 mn (1971) to 217.6 mn (1991)

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SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Income Groups

• Destitute: Below Rs. 16000

• Aspirants: Between Rs. 16001 and 22000

• Climbers: Between Rs. 22001 and 45000

• Consuming Class: Between Rs. 45001 and 215000

• Very Rich: over Rs. 215000

Ref: Marketing Management by Saxena

Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Ref: Marketing Management by Saxena

Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Economic Factors

Distribution of Consumer

Income

Distribution of Consumer

Income

InflationInflation

RecessionRecession

Economic Areas of Concern to

Marketers

Economic Areas of Concern to

Marketers

Ref: Marketing by Lamb

Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Political/Legal/Govt. factors

• Change in political/legal environment can have both favorable and non favorable impact on business and marketing decisions

e.g. Ban on liquor, cigarette advertising can be unfavorable , but supporting government policies in case of telecom industry are a boon to the industry

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SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Competition

• Competition includes direct and predicted competition

• The possible competitors can be predicted by analyzing firms who could enter the market because of synergy with existing products, fresh entrants in an industry with low entry barriers

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SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Technology

• Technology can be a favorable as well as otherwise for marketerse.g. technological innovations make products redundant in consumer durable sector whereas technological up gradations has benefited the Indian automobile sector

Designed & developed by E4

SBA SEMESTER ONE SESSION 4 BASICS OF MARKETING- I

Ref: Marketing Management by Saxena