MARKETING ENVIRONMENT

Marketing deeds are those which are affected by many activities internally and externally of a
business firm. The marketing activity are entirely induced by activities and forces of decision
makers. The attributes comprises of all those effect which cause changes to market and
maqrking effort.
Marketing program of organization is altered and formed by organization’s internally
demand to start its business planning by focusing externally at requirement of customer,
rather than internally at what it want to produce. The organization should be certain of the
activities ongoing in the organization and should appreciate the changes which leads to
change the pattern of demands in its services.
It has to be ensure of the opportunities in the market and the threats which could affect the
marketing environment.
Organization which is marketing oriented scans outside the surrounding to acknowledge the
opportunities and to minimize the possible threats encountered by an organization. Business
activities of an organization is affected by various factors which comprises in a marketing
environment.

THE MARKETING ENVIRONMENT COMPRISES: -

1. MICRO

2. MACRO

MICRO ENVIRONMENT

Micro environment of organization consists of various factors which affect organizations

function internally

COMPONENTS
 Organizations
 Customer
 Competitors
 Suppliers
 Market intermediaries
 Public
 1. ORGANISATIONS: -
In making marketing plans, the manager consider other departments in consideration.
Marketing manager also focus on other companies comply with organisations.
finance is related with funds and using funds to continue marketing plans.
Purchasing department is focused with supplies of material whereas Manufacturing is
responsible with production of products with desired quantity and quality.
All revenues and cost which help the organization with ongoing status are measured by
Accounts section. And other departments also have affect on marketing structure.
INTERNAL ENVIRONMENT (in organization)
 Finance department
 Purchasing department
 Manufacturing department
 Accounts department
 Advertisement concept
 Societal concept

2. CUSTOMER: -
Consumer market comprises of individual and households that they buy goods and services
for own consumption. Business market buy goods and services for augmented processing or
for use in production process. Whereas reseller markets buy goods and services to resell them
and earn profit.
Government markets include government agencies which buys goods and services to
generate public services or transfer the goods and services to those who need them.
FACTORS CONSIDERD BY ORGNISATION FOR CUSTOMERS
 Needs of consumer
 Taste and preference
 Socio-economic factors
 Satisfaction/value
 Feedback

3. COMPETITIORS: -
All companies do not acquire same marketing strategy. The company’s marketing strategy is
affected by other host of competitors. Each firm consider its own company size and position
in market to those of competitors. These competitors have to identified, monitored and
outwill to gain and continue with customer loyalty.
On the basis of strategies of competitors, a company develop its own plan and strategy.
Competitive advantage of company rely on strength, weakness and position of rivalries in
market.
Being large firm isn’t suffcient. Sometimes small companies are capable to create such
strategies that they enjoy much perks than large industries. Large firm with higher postion in
industry uses the major strategies that smaller firms can’t incur.
FACTORS CONSIDERD BY ORGNISATION FOR COMPETITORS
 Sale and growth
 Distribution channels and areas
 Promotion/offer/schemes
 Credit policy
 Services

4. SUPPLIERS: -

Company is provided with resources to product its goods and services by Suppliers. It
provides an important link to deliver value to the customers. Marketing Manager must
examine supply availability- supply shortages or delays, labor strikes and other events
can cost sales in the short run and adversely affect customer satisfaction in long run.
Marketing manager also keeps an eye on fluctuation on trends in price.The company’s
sales volume can be harm by the growth in price which is force by increase in supply
cost.
FACTORS CONSIDERD BY ORGNISATION FOR SUPPLIERS
 Cost
 Quality
 Credit policy
 Delivery schedule
 Mode of delivery
 Return policy

5. MARKET INTERMEDIARIES: -
There is a sustainable link between organization and its customer which is called
intermediaries and distribution. Firms which produce at large scale mostly find it difficult to
deal with final customers in selected market. That is the reason the intermediaries are
choosen to supply products for detailed specification and to know the demands of market.
MARKET INTERMEDIARIES INCLUDE
 Reseller
 Distribution firm
 Marketing services agencies
 Financial intermediaries
To find customers for goods and services, resellers are the distribution channel for
help. Resell merchandise are bought by retailers and whole sellers.

6. PUBLIC: -

It is the utmost priority of companies to satisfy public at large with competitors and
consumers. Public has actual interest on company’s ability to achieve their objective.
Public relation is broadly marketing operation where goodwill, favorable reaction,
donations, hidden potential fixture buyers are few of the responses for which
organization expects from the public. The overall performance of companies depends
on how public in the society treat their activity. Companies have to spend time on
observing public by understanding their needs, wants and what they actually demand
while dealing with them wisely.

TYPES
 Financial public
 Action centric group
 Service public
 Media public
 MACRO ENVIRONMENT

Environment comprises of major forces which not only create impact on organization but
also had broader impact on factors of micro environment.
COMPONENTS
 Demographic
 Economics
 Natural environment
 Technological
 Political
 Cultural-Social
 Legal

1. DEMOGRAPHIC: -

Demographic is the study about population characteristics which is used to describe

consumers. Current and potential customers of market is determined by
demographics. Where is customer, who is the buyers, and what, market is selling.
Demographic includes the study of population in terms of size, location, gender,
density, age, sex, ratio, income and other statistics.
Company is more interested in studying the preference of population and what are the
current needs and standard of living in different cities with different religion.

CONTENTS OF DEMOGRAPHIC
 Income: - identifies the purchasing power and status of public.
 Lifestyle: - pattern of living identified through their activities, status, opinion.
Lifestyle also depends on the other factors of demographic.
 Sex
 Education
 Social class
 Occupation
 Age
 Infants
 Teens
 Adults
 Senior citizen
 Women
 Men
2. ECONOMIC: -

Economic environment is most fundamental component of marketing environment. It

majorly affects the success of business organization with its survival too. The
economic policy of government has major impact on business. Some categories of
business are graciously affected by government policies, some are adversely affected
and some remain constant.

ECONOMIC TRENDS
 Agriculture trends
 Industrial output trends
 Per capita income trends
 Pattern of income distribution
 Pattern of saving and expenditure
 Market growth
 Demand patterns of industry
 GDP, inflation

3. NATURAL ENVIRONMENT

Natural environment has adverse effect on business operations. It is uncontrollable

and has no pre determination of it so that major steps could be taken. Companies
should understand their responsibility towards environment and should contribute
their part to reduce damage in environment.
Shortage of nonrenewable resources is increasing day by day. Probable shortages of
assumed raw materials, for examples, oil, coal, minerals, unstable cost of energy,
increased levels of pollution; changing role of Government in environment protection
are a few of the hazards the world is facing on physical environment forces.

 Calamities
 Pollutions

4. TECHNOLOGICAL

The most dramatic force we are forcing right now is technological. With every
advancement it changes rapidly and customers are easily attracted towards easy
lifestyle which causes more demand of latest updates and these changes cause effects
on company’s and organization as it cost them too much to change and update
everything.
Technology has brought many changes to human life. Be it in the field of science,
medicine, entertainment, communication or travel equipment. One can notice the
changes in product or efficiency.
 5. POLITICAL ENVIRONMENT

Political environment comprises of factors related to the management of public affairs

and their effect on the business of the organization. Political environment has a
constant relationship with the ecosystem and the economic policy. Certain standards
are specified by government for the products including packaging.
Government decides most of the business rules and regulations are based upon
political environment.

6. CULTURAL-SOCIAL
Cultural-social forces are referred to attitudes, sentiments, ethics, values, living of
individual in a society. Opportunities and threats can be faced by marketers by the forces that
changes the attributes of market. The buying habits of consumers and their language with
their beliefs and practices, taste and preferences all factors influence the social environment
and consumption.

7. LEGAL ENVIRONMENT

Marketing environment is strongly affected by the laws and regulations made by

government to regulate the business in smooth process. The advertising, distribution
channel and price setting all are affected by legal prospectus. To run a business, legal
environment is needed to be umderstand.

IMPORTANCE OF MARKETING ENVIRONMENT

 It helps to analyses the marketing situation.
 It estimates the effect of threat and opportunity on business.
 Companies are facilitated with information to rise the awareness for changes
in environment.
 On the basis of analysis the marketing strategies are developed.
 The advantages from opportunities are best rather than loosing to a competitor.
 The best strategies can be developed under the light of analyzing of happening
around you.
 E-COMMERCE INDUSTRY

E-commerce is process of buying or selling of products on online services or over the

internet. Electronic commerce impasse on technology such as mobile commerce, electronic
fund transfer, supply chain management, online transaction, inventory management system,
automated data collection.
World wide web is one part of transaction lifecycle commonly used by modern electronic
commerce.
The e-commerce industry includes companies that produce or sell software to business and
corp0rations of all size. The ample range of products and services offered work to improvise
and expand customers IT capabilities by ratification such internal task as inventory
management, operation management and tracking purchases.
The e-commerce transactions occur either B2B, B2C, C2B or C2C.

MACRO ENVIRONMENT OF E-COMMERCE

Customers and suppliers are affected by several factors of micro environment to a certain
extent by organization. The environment which surrounds the digital marketing is complex
and forever unstable. It is always evolving, altering and moving. All this bring new
opportunities for organization to exploit in order to improve their ability to effectively target
their preferred audience. However, the implementation of marketing actions of online
marketer is probably different from that offline one.

1. POLITICAL ENVIRONMENT: - While the challenges may not be the

same before the e-retailers as the physical retail stores but still they face many
political hurdles. There are many factors affecting the e-business. The government
has charge in place in order to control and access the enhancement as well as the
usage of the internet. Digital retailers have to ensure that they remain on top of
changes in these laws so that there would be smooth running of e-commerce
business and remain correct in legal position. Taxes are also regulated by
government for different countries. In order to minimize loss of the country,
government has to implement taxes and might increase tariffs in order to reduce
illegal activities and economic loss of the country. Government also impose tax on
imported products which is needed to be taken care by digital marketers.

2. ECONOMIC ENVIRONMENT: - The economic surrounding is bigger

scene today in market place. Globalization is the biggest reason for the online
 business in the market to everyone in the world at any time which has reduced the
cultural barrier. The economic stability of country affects the behavior of
population. People only buy products if they have enough disposable income.,
therefore during recession, sales fall for non-necessity goods and services. The
factors which should affect digital marketers are that they need to be aware of
economic changes that could affect their business. For example, recession or
recent trend in market can easily have impact on ongoing business.

3. SOCIAL ENVIRONMENT: - Society itself is a very powerful force during

shaping of trends and business. The step toward online shopping has increased
vastly. Society finds it more convenient to shop online but some people still find it
difficult to shop as less knowledge and less access to internet, they trust less for
online transaction as frauds and cybercrimes do take place more these days.

4. TECHNOLOGY: - Technology is the most evolving and unstable

environment which changes rapidly and retailers need to be aware of the
technological changes and have to be updated, otherwise they will lack behind
their competitors both domestically and internationally. Retailers have to adapt the
changes as e-commerce is evolving day by day. Technology has caused people to
easily access and compare prices of all e-commerce products and services and
made more convenient. With every advancement, people demand new
upgradation which causes cost to retailer to update everything.

5. ENVIRONMENTAL: - environmental factors too have impact on e-

commerce industry. Although direct impact is very low, still focus on
sustainability. E-retailers invest in sustainability from waste reduction to
sustainable packaging and using renewable resources.

6. LEGAL ENVIRONMENT: - with every advanced and increased use of

online media, online business is the most emerging trend nowadays. But being
functional online meant to face legal aspects. There are various issues associated
with e-business. The website has to be incorporated, unless all the purchase and
selling activity related to products will be considered illegal. Trademark
infringement of business can be serious matter and hindrance for business. The
company has to protect the transactions details of customers unless they had to
face Australian privacy laws.
 FLIPKART
Flipkart is one of the world’s top 10 visiting e-commerce website in India. It
was founded by Sachin Bansal and Binny Bansal in 2007. They previously
worked for amazon.com and resinged to create new company which
incorporated on Oct 2007. The first product they sold to a customer from
Hyderabad was a book leaving Microsoft to change the world. Flipkart currently
own more than 30000 employees. Flipkart does payment method by COD,
credit & debit card transaction, net banking, e-vouchers. It has a revenue of
$199 billion. Major warehouses of flipkart are located in Bangalore
(headquarter), Chennai, Delhi, Hyderabad, Mumbai, Noida, Kolkata, pune.
Flipkart has an attractive payment mode while advance search engine
optimization. Attractive and hourly discount coupons make customers to
purchase from flipkart. They are successful in e-commerce site because of
memorable online experience without inconvenience. It experienced 2 million-
unit sales in a month with growth at 25% eyeing a $50 million run rate. Flipkart
is the only e-commerce site who added a pay later feature to allow shoppers to
shop at the time of need and pay later by the 10th of next month.
MICRO ANALYSIS OF FLIPKART

The micro environment comprises of factors in immediate vicinity of a business that

influence its functioning.

1. CUSTOMERS

Primary goal of any business.

Flipkart identifies customers perception and choices and the ability to purchase the
products and services. The increase in competition leads to focus on more satisfaction
of customer. They focus on lifestyle and income level, the amount of time they spend
on social media so as to attract through social advertisements. It focusses on the
people who are too busy to go for shopping and can spend above 5000 RS. They
provide extra discounts and offers to shop more. They want to be the limelight for the
people who want hassle free shopping. Flipkart is an open platform for general public
to become merchant. Products are displayed on the basis of categories required.
 2. PUBLIC
It includes five type of public: -
 FINANCIAL PUBLIC: - it started with initial funding of 4 lakhs. Investors
includes MIH INDIA, a part of south African media company NASPERS
company. ACCEL Partner, Iconiq Capital LIC, TIGER Global. More than 700
million were invested by TIGER GLOBAL which is apparently higher.

 LOCAL & GENERAL PUBLIC: - In FY 2013-14, loses of flipkart in India

entitles amount to RS 719.5 cr on revenue of RS 3035.8 cr.

Flipkart has really a good number of followers on social media platform.

FACEBOOK more than 2M
TWITTER

 CITIZEN ACTION: - flipkart fake discount offer busted on social media.

With big billion-day trending on social media, it was a buzz with several users
sharing grievances.
 INTERNAL PUBLIC :- emplyoees of flipjkart work 24/7 to make it the best
e-commerce site. Emplyoees have good opinion about working environment.

3. COMPETITORS

Flipkart has many rivals in market and has to face many challenges to reach
their profit margin. Its major competitors include amazon and snapdeal. To
face competiton in market flipkart made its logistic team the stongest and
made the site customer oriented. It has a customized section as flipfit where
customized gifts are available for purchase and selling.

4. INTERMEDIARIES
Flipkart has currently hired the alpha sellers which sell goods to beta sellers.
It has preferd seller such as super-comnet, omnitech retail and retail net which is used to
purchase from flipkart’s wh0lesale unit and dell them to consumers. Various merchants are
allowed to sell their product through flipkart and be the mediater of flipkart and consumer.

5. SUPPLIERS
No limited suppliers. It is a open platform for everyone. One of the supplier
is WS RETAILER.
 FMCG INDUSTRY

Fast Moving Consumer Goods is the 4th largest and fast expanding industry in the Indian
Economy and also the biggest contributor to GDP of India. FMCG are those goods which are
sold rapidly and at a effective price. FMCG goods include packed foods, beverages, soaps,
detergents, toiletries, household goods and many more. The FMCG setor has market size of
more then 2 trillion while rural India contributing to one third of its revenue, with around
60% urban share in profit and rest 40% share is of semi-urban segments. The Indian FMCG
has a strong MNC presence and well established network with high competition.

MACRO ENVIRONMENT ANALYSIS OF FMCG

1. ECONOMIC
Growth of FMCG product is relatable to the growth of Indian Economy. The increasing
power of economy has positive impact on FMCG industry. With this result company has to
produce more and more innovative products to compete in a race. There has been a current
slow down in global economic scenario where there has been rise in unemplyoement and low
purchasing power of consumer. This leads for the consumer not to buy expensive products
and services. Due to this condition, RMCG companies had to reduce their price for products
and services.
Organization with smart strategies understand the economic environment and take
measurable steps according to changes. With the implementation of GST, their have been
reduction in prices and boon in consumption of FMCG product. Income is a main factor of
the economic environment. Increase in income leads to increase in growth of economic
sector.

2. POLITICAL
FMCG has large impact from political environment. The legislations should be avoided from
implementation which lead to serious imputation. Major restrictions are implemented by the
organization on import policies. Infra and transportation are improved in rural as well as in
urban areas also.
 3. TECHNOLOGICAL
Technology advancement is boost in production with upgradation in quality of products and
services provided to customer. To improve brand communication and market, organization
adopted e-business. Supply chain is more ease with the involvement of technology
advancement. The rate of productivity and effective IT technologies cost is lowered by
organization. Technology always play a vital role in FMCG sector with advancement in
packaging, increase life of fhelf products and many more.

4. DEMOGRAPHIC
India is the biggest economy in the world in means of population hence increase in
opportunities for the FMCG industry. With the increase in population, the demand of
products will increase. It has a positive impact on the industry.

5. SOCIO-CULTURAL ENVIRONMENT
The Social progress of FMCG industry is positive as people’s lifestyle has improved. Due to
the consumption of packaged goods provided by FMCG industry, the health and hygiene of
people has improved in comparison of the goods sold on streets, which mean that the
morality ratio will be low in the future. The FMCG sector is dominated mainly by the MNCs,
which invest millions of dollars every year to improve the conditions of people in India.
For ex: HUL has started a “project SHAKTI” in rural areas to financially sanction rural
women and generate livelihood opportunities for them. The pr0ject now has over one lakh
micro enterpreurs across 18 states.

6. NATURAL ENVIRONMENT
The FMCG sector manufacture products from raw material supplied from fields directly.
Therefore, they usually protect and preserve the environment. FMCG sector also take steps tp
preserve green house by using herbal waste, establishing green buildings and carrying out
procudures that are in support of green and also minimization of water consumption.
government has also framed some anti-dumping laws which restricts any manufacturing firm
to dump its waste in any clean source of water.
 HINDUSTAN UNILEVER LIMITED (HUL)

HUL is British-Dutch, manufacturing co. Headquater is located in Mumbai,India. It was

founded in 1993 as Lever Brothers. MR. SANJIV MEHTA is the CEO of the co. HUL works
to create a improved future everyday and helps people to feel good, look good and get more
out of life with brands and services that are apropriate for them and suitable for other.
The company has 18,000 emplyoees and generate sales of INR of 37660 Cr. HUL is
subsidiary of Unilever. The most focus is on values and ethics and is concerned with quality.
HUL has some of its iconic brands such as Dove, Ponds, Vaseline, Lipton, Lakme, Knorr and
many more.

MICRO ENVIRONMENT ANALYSIS OF HUL

1. SUPPLIERS
HUL has around 2000 suppliers, who help them in achieveing success in 190 countries
worldwide. They take agricultural raw materials directly from the farmers. They linked with
TATA Chemicals for soaps and shampoos.
Other Suppliers of HUL are Mother Dairy, Nirma, Mespack and many more. In 2012, HUL
has hosted its South-Asia partner in order to win Supplier summit in Mumbai.

2. CUSTOMERS
HUL covers all consumers comprises of premium class or middle class. It has international
expertise as well as wealth of knowledge to cater the different segments or products and
satisfies the needs of the customers. They ensure to deliver branded products of excellent
quality to win their customers loyalty and confidence. The organization also ensure open
communication with customers to get their feedback and improve its product offering. A rural
health programme is also run by the name of “Lifebuoy Swasthya Chetna” for the adoption of
hygiene practices among rural India.

3. COMPETITORS
HUL faces very stiff and tough competition in every segment. The major competitors are
P&G, ITC, Patanjali, Nestle, Reckitt Benckiser and many more. ITC is the most firm
competitor of HUL.The robust supply chain and distribution network is the competitive
advantage enjoyed by them.
 4. INVESTORS AND STAKEHOLDERS
HUL displayed high standards of cooperative behavior towards its stakeholders. They have
partnered with stakeholders so that they can provide leadership, promote transparency and
share best practices with HUL.

5. MARKET INTERMEDIARIES
HUL has large disrtibutiuon system. For online shopping, they are linked with “SANGAM
DIRECT”, which is an online chain for grocery shopping.

6. ORGANIZATION
The structure of organization of HUL consists of speed and fleiblity in decision making
process and its implementation, due to its empowered managers across all the operations of
the company.