UNIT I MARKETING FOR THE 21st CENTURY

MARKETING
 Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.
----The American Marketing Association.
 Marketing is a societal process by which individuals and groups obtain
what they need and want through creating, offering, and freely exchanging
products and services of value with others.

MARKETING MANAGEMENT
 Marketing management as the art and science of choosing target markets
and getting, keeping, and growing customers through creating, delivering,
and communicating superior customer value.
 Marketing management isthe process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and service
to create exchanges that satisfy individuals and organizational objectives.
------- The American Marketing Association.

What is marketed?
Marketers market 10 main types of entities: goods, services, events, experiences,
persons, places, properties, organizations, information, and ideas.
• Goods: Physical goods constitute the bulk of most countries’ production
and marketing efforts.
• Services:As economies advance, a growing proportion of their activities
focus on the production of services. Services include the work of airlines,
hotels, car rental firms, barbers and beauticians, maintenance and repair
people, and accountants, bankers, lawyers, engineers, doctors, software
programmers, and management consultants.
• Events:Marketers promote time-based events, such as major trade shows,
artistic performances, and company anniversaries. Global sporting events
such as the Olympics and the World Cup are promoted aggressively to both
companies and fans.
• Experiences: A firm can create, stage, and market experiences. Walt
Disney World’s Magic Kingdom allows customers to visit a fairy kingdom,
a pirate ship, or a haunted house.

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 • Persons:Artists, musicians, CEOs, physicians, high-profile lawyers and
financiers, and other professionals all get help from celebrity marketers.
• Place:Marketers include economic development specialists, real estate
agents, commercial banks, local business associations, and advertising and
public relations agencies.Ex:In the software industry Bangalore is
positioned as the “silicon valley” of India. In the tourism industry, Kerala
is marketed as “God’s own country”.
• Properties:Are intangible rights of ownership to either real property (real
estate) or financial property (stocks and bonds). They are bought and sold,
and these exchanges require marketing.
• Organizations:Work to build a strong, favorable, and unique image in the
minds of their target publics. Universities, museums, performing arts
organizations, corporations, and nonprofits all use marketing to boost their
public images and compete for audiences and funds.
• Information:Is essentially what books, schools, and universities produce,
market, and distribute at a price to parents, students, and communities. Ex:
An X-ray or an MRI, is not a product but an information. (Siemens medical
systems).
• Ideas: Every market offering includes a basic idea. Social marketers are
busy promoting such ideas as “Friends Don’t Let Friends Drive Drunk” and
“A Mind Is a Terrible Thing to Waste.”

MARKETS
A “market” is a physical place where buyers and sellers gathered to buy
and sell goods.
WHO MARKETS?
MARKETERS AND PROSPECTS: A marketer is someone who seeks a
response—attention, a purchase, a vote, a donation—from another party, called
the prospect. If two parties are seeking to sell something to each other, we call
them both marketers. Marketers are responsible for demand management.

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Eight demand states are
 Negative demand: Consumers dislike the product and may even pay to
avoid it. Ex: Dental work where people don’t want problems with their
teeth and use preventive measures to avoid the same. Insurance, which
people should have but they delay buying an insurance policy. Similarly,
people would like to avoid heart attacks and hence may pay for a full body
check up where the results might be negative, but still the customer has to
pay. The marketer has to solve the issue of no demand by analyzing why
the market dislikes the product and then counter acting with the right
marketing tactics
 Nonexistent demand: Consumers may be unaware of or uninterested in
the product. Ex: farmers may not be interested in new farming methods
College students may not be interested in foreign language courses.
Marketing should look for ways to benefit others with their product and of
course thus sell their product
 Latent demand: Consumers may share a strong need that cannot be
satisfied by an existing product: Ex: normal phones vs smart phones. They
might settle for a normal phone, but then later on they get the itch to buy a
smart phone.
 Declining demand: Consumers begin to buy the product less frequently or
not at all. Ex: When CD players were introduced and IPOD came in the
market, the demand for walkman went down.
 Irregular demand: Consumer purchases vary on a seasonal, monthly,
weekly, daily or even hourly basis. Ex: Seasonal products like umbrellas,
air conditioners or resorts.
 Full demand: Consumers are adequately buying all products put into the
market place. Ex: Ideal Situation where supply is equal to demand.
 Overfull demand: More consumers would like to buy the product than can
be satisfied. Ex: National park is terribly overcrowded in the summer.
 Unwholesome demand: Consumers may be attracted to products that have
undesirable social consequences. Ex: Cigarettes, hard drinks, alcohol.

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Structure of Flows in a Modern Exchange Economy

 Manufacturers go to resource markets (raw material markets, labor

markets, money markets), buy resources and turn them into goods and
services, and sell finished products to intermediaries, who sell them to
consumers. Consumers sell their labor and receive money with which they
pay for goods and services. The government collects tax revenues to buy
goods from resource, manufacturer, and intermediary markets and uses
these goods and services to provide public services. Each nation’s
economy, and the global economy, consists of interacting sets of markets
linked through exchange processes

KEY CUSTOMER MARKETS:

• Consumer markets • Global markets.
• Business markets. • Nonprofit markets.
A Simple Marketing System

Consumer Markets

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 • Companies selling mass consumer goods and services such as juices,
cosmetics, athletic shoes, and air travel spend a great deal of time
establishing a strong brand image by developing a superior product and
packaging, ensuring its availability, and backing it with engaging
communications and reliable service.
Business Markets:
• Companies selling business goods and services often face well-informed
professional buyers skilled at evaluating competitive offerings.
• Business buyers buy goods to make or resell a product to others at a profit.
• Business marketers must demonstrate how their products will help achieve
higher revenue or lower costs.
• Advertising can play a role, but the sales force, the price, and the
company’s reputation may play a greater one.
Global Markets
• Companies in the global marketplace must decide which countries to enter;
how to enter each (as an exporter, licenser, joint venture partner, contract
manufacturer, or solo manufacturer); how to adapt product and service
features to each country; how to price products in different countries; and
how to design communications for different cultures.
• They face different requirements for buying and disposing of property;
cultural, language, legal and political differences; and currency
fluctuations. Yet, the payoff can be huge.
Nonprofit and Governmental Markets
• Companies selling to nonprofit organizations with limited purchasing
power such as churches, universities, charitable organizations, and
government agencies need to price carefully.
• Lower selling prices affect the features and quality the seller can build into
the offering.
• Much government purchasing calls for bids, and buyers often focus on the
lowest bid.
CORE MARKETING CONCEPTS
Needs, Wants, and Demands:
 Needs are the basic human requirements such as for air, food, water,
clothing, and shelter.
 These needs become wants when they are directed to specific objects that
might satisfy the need.EX:A person in Afghanistan needs food but may
want rice, lamb, and carrots. Wants are shaped by our society.
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  Demands are wants for specific products backed by an ability to pay. Wants
become demands when supported by purchasing power.Ex: Many people
want a Mercedes; only a few are able to buy one.

Supply Chain
 The supply chain is a longer channel stretching from raw materials to
components to finished products carried to final buyers. The supply chain
for coffee may start with Ethiopian farmers who plant, tend, and pick the
coffee beans, selling their harvest to wholesalers or perhaps a Fair Trade
cooperative. If sold through the cooperative, the coffee is washed, dried,
and packaged for shipment Then transports the coffee to the developing
world where it can sell it directly or via retail channels.

Value:
 Value is defined from the customer’s perspective as a trade-off between the
benefits received versus the price paid. Value is represented by the ratio of
perceived benefits to price paid.
Value= Benefits derived from a product
Cost of acquiring the product
Satisfaction:
 Satisfaction reflects a person’s judgments of a product’s perceived
performance (or outcomes) in relationship to expectations.
 If the person performance falls short of expectations, the customer is
dissatisfied.
 If it matches expectations, the customer is satisfied.
 If it exceeds them, the customer is delighted.

Segmentation:
 Market segmentation is the process of taking the total heterogeneous
market for a product and dividing it into several submarkets or segments,
each of which tend to be homogeneous in all its significant.
 Market segmentation can be identified by examining demographic,
psychographic and behavioural differences among buyers.
Ex:Gramean bank in India.

Target market:
 A target market is the market segment which a particular product is
marketed to. It is often defined by age, gender etc.,
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 Ex:Volvo develops its cars for buyers to whom safety is a major concern.

Competition

 Competition includes all the actual and potential rival offerings and
substitutes a buyer might consider.
 An automobile manufacturer can buy steel from U.S. Steel in the United
States, from a foreign firm in Japan or Korea, or from a minimill such as
Nucor at a cost savings, or it can buy aluminum for certain parts from
Alcoa to reduce the car’s weight, or engineered plastics from Saudi Basic
Industries Corporation (SABIC) instead of steel.

Marketplace:
• The marketplace is physical, such as a store you shop in.
Market space:
• The market space is digital, as when you shop on the Internet.
Meta market:
 A Meta market is a cluster of complementary products and services closely
related in the minds of consumers, but spread across a diverse set of
industries.
 Ex: The automobile meta market consists of automobile manufacturers,
new and used car dealers, financing companies, insurance companies,
mechanics, spare parts dealers, service shops, auto magazines, classified
auto ads in newspapers, and auto sites on the Internet.

Exchange:
 Exchange is the process of obtaining a desired product from someone by
offering something of value in return.

Transaction:
 Transaction is a trade of values between two or more parties. When an
agreement is reached we say that transaction takes place.

Marketing Channels:To reach a target market, the marketer uses three kinds of
marketing channels.
 Communication channels deliver and receive messages from target buyers
and include newspapers, magazines, radio, television, mail, telephone,
billboards, posters, fliers, CDs, audiotapes, and the Internet. Beyond these,
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 firms communicate through the look of their retail stores and Web sites and
other media. Marketers are increasingly adding dialogue channels such as
e-mail, blogs, and toll-free numbers.
 Distribution channels: The marketer uses distribution channels to display,
sell, or deliver the physical product or service(s) to the buyer or user. These
channels may be direct via the Internet, mail, or mobile phone or telephone,
or indirect with distributors, wholesalers, retailers, and agents as
intermediaries.
 Service channels: To carry out transactions with potential buyers, the
marketer also uses service channels that include warehouses, transportation
companies, banks, and insurance companies.

NEW MARKETING REALITIES

 Network information technology. The digital revolution has created an

Information Age that promises to lead to more accurate levels of
production, more targeted communications, and more relevant pricing. •
 Globalization. Technological advances in transportation, shipping, and
communication have made it easier for companies to market in, and
consumers to buy from, almost any country in the world. International
travel has continued to grow as more people work and play in other
countries.

 Deregulation. Many countries have deregulated industries to create greater

competition and growth opportunities. In the United States, laws restricting
financial services, telecommunications, and electric utilities have all been
loosened in the spirit of greater competition.
 Privatization. Many countries have converted public companies to private
ownership and management to increase their efficiency, such as the
massive telecom company Telefónica CTC in Chile and the international
airline British Airways in the United Kingdom.
 Heightened competition. Intense competition among domestic and foreign
brands raises marketing costs and shrinks profit margins. Brand
manufacturers are further buffeted by powerful retailers that market their
own store brands. .
 • Industry convergence. Industry boundaries are blurring as companies
recognize new opportunities at the intersection of two or more industries.
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 The computing and consumer electronics industries are converging, for
example, as Apple, Sony, and Samsung release a stream of entertainment
devices from MP3 players to plasma TVs and camcorders.
 Retail transformation. Store-based retailers face competition from catalog
houses; directmail firms; newspaper, magazine, and TV direct-to-customer
ads; home shopping TV; and e-commerce.
 Disintermediation. The amazing success of early dot-coms such as AOL,
Amazon.com, Yahoo!, eBay, E*TRADE, and others created
disintermediation in the delivery of products and services by intervening in
the traditional flow of goods through distribution channels. These firms
struck terror into the hearts of established manufacturers and retailers. In
response, traditional companies engaged in reintermediation and became
“brick-and-click” retailers, adding online services to their offerings. Some
became stronger contenders than pure-click firms, because they had a larger
pool of resources to work with and established brand names
 Consumer buying power. From the home, office, or mobile phone, they
can compare product prices and features and order goods online from
anywhere in the world 24 hours a day, 7 days a week, bypassing limited
local offerings and realizing significant price savings. Even business buyers
can run a reverse auction in which sellers compete to capture their business.
They can readily join others to aggregate their purchases and achieve
deeper volume discounts
 Consumer information. Consumers can collect information in as much
breadth and depth as they want about practically anything. They can access
online encyclopedias, dictionaries, medical information, movie ratings,
consumer reports, newspapers, and other information sources in many
languages from anywhere in the world
 Consumer participation. Consumers have found an amplified voice to
influence peer and public opinion. In recognition, companies are inviting
them to participate in designing and even marketing offerings to heighten
their sense of connection and ownership. Consumers see their favorite
companies as workshops from which they can draw out the offerings they
want

MARKETING CONCEPTS
 Marketing activities should be carried out under a well thought philosophy
of efficient, effective and socially responsible marketing.
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  There are five competing concepts under which organizations conduct
marketing activities.
They are:
1. The production concept. 4. The marketing concept.
2. The product concept. 5. The societal marketing concept.
3. The selling concept.
The production concept
 The production concept is one of the oldest concepts in business. It holds
that consumers prefer products that are widely available and inexpensive.
 Managers of production-oriented businesses concentrate on achieving high
production efficiency, low costs, and mass distribution.
 Marketers also use the production concept when they want to expand the
market.
Ex: It makes sense in developing countries such as China, where the largest
PC manufacturer, Legend (principal owner of Lenovo Group), and
domestic appliances giant Haier take advantage of the country’s huge and
inexpensive labor pool to dominate the market.
The product concept
 The product conceptproposes that consumers favor products offering the
most quality, performance, or innovative features.
 Managers in these organizations focus on making superior products and
improving them over time.
 Consumers generally look and prefer quality of the product.
 Consumers generally buy products to meet their overall needs and not
specific needs.
Ex: Apple is one company which works highly on product concept to get
the best products to their consumers.
The selling concept
 The selling conceptholds that consumers and businesses, if left alone, won’t
buy enough of the organization’s products.
 The organization must therefore undertake an aggressive selling and
promotion effort.
 Selling concept is practiced most aggressively with unsought goods- goods
that customers normally do not think of buying, such as encyclopedias,
cemetery plots, life insurance, vacuum cleaner, firefightingequipment’s
including fire extinguishers.
 Most firms practice the concept when they have over capacity. Their aim is
to sell what they make rather than what the market wants.
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The Marketing Concept
 Instead of a product-centered, “make-and-sell” philosophy, business
shifted to a customer-centered, “sense-and-respond” philosophy.
 The job is not to find the right customers for your products, but to find the
right products for your customers.
 Ex: Dell computer provides product platforms on which each person
customizes the features he desires in the computer.
 The marketing concept holds that the key to achieving organizational goals
is being more effective than competitors in creating, delivering and
communicating superior customer value to the chosen target markets.
 The marketing concept rests on four pillars:
1. Target market
2. Customer needs
3. Integrated marketing: When all the company’s departments work
together to serve the customer’s interest, the result is integrated
marketing.
4. Profitability: In the case of private firms, the major objective is profit.
In case of non-profit and public organizations, it is surviving and attracting
enough funds to perform useful work.

Contrast between the selling and marketing concepts

Harvard’s Theodore Levitt drew a perceptive contrast between the selling and
marketing concepts:
 Selling focuses on the needs of the seller; marketing on the needs of the
buyer.
 Selling is preoccupied with the seller’s need to convert his product into
cash; marketing with the idea of satisfying the needs of the customer by
means of the product and the whole cluster of things associated with
creating, delivering, and finally consuming it.

The Societal Marketing Concept

It holds that the organization’s task is to determine the needs, wants and the
interest of target markets and to deliver the desired satisfaction more effectively
and efficiently than competitors in a way that preserves or enhances the
customer’s or society’s wellbeing.
THE HOLISTIC MARKETING CONCEPT
 The holistic marketing concept is based on the development, design and
implementation of marketing programs, processes and activities.
 The diagram shows a schematic overview of four broad components
characterizing holistic marketing.
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Relationship marketing
• Aims to build mutually satisfying long-term relationships with key
constituents in order to earn and retain their business.
 Four key constituents for relationship marketing are customers, employees,
marketing partners (channels, suppliers, distributors, dealers, agencies),
and members of the financial community (shareholders, investors,
analysts).
 The ultimate outcome of relationship marketing is a unique company asset
called a marketing network, consisting of the company and its supporting
stakeholders—customers, employees, suppliers, distributors, retailers, and
others—with whom it has built mutually profitable business relationships.
 EX: Sending birthday cards to clients, offering reward plans to customers
and creating web pages and forums for clients to find the answers to their
questions and to become better informed. Making a change based on
customer requests is also a relationship marketing technique.
Integrated marketing
• Integrated marketingoccurs when the marketer devises marketing activities
and assembles marketing programs to create, communicate, and deliver
value for consumers such that “the whole is greater than the sum of its
parts.”
 Two key themes are that (1) many different marketing activities can create,
communicate, and deliver value and (2) when coordinated, marketing
activities maximize their joint effects.
 EX: Using an integrated communication strategy means choosing
communication options that reinforce and complement each other. A
marketer might selectively employ television, radio, and print advertising,
public relations and events, and PR and Web site communications.
Applying an integrated channel strategy ensures to maximize sales and
brand equity.
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Internal marketing
• Internal marketingis defined as viewing employees as internal customers,
viewing jobs as internal products that satisfy the needs, and wants of these
internal customers while addressing the objectives of the firm.
 Internal marketing is an ongoing process that occurs strictly within a
company whereby the functional process is to align, motivate and empower
employees at all management levels to consistently deliver a satisfying
customer experience.
Ex: Apple has a unique organizational culture that emphasizes innovation,
creativity, and expertise. In order to promote this culture, they are highly
selective when they recruit employees and extremely thorough when they
train them. Apple realizes that the best way to promote the image of their
brand is for every employee, particularly the ones who work with
customers, to accurately represent that image. Anyone who has been to an
Apple store knows that the employees are experts in the products they sell
and are willing to answer an endless number of questions. They are smart,
accessible, and knowledgeable, positively reflecting the company as a
whole.
Performance marketing
 Performance marketingrequires understanding the financial and
nonfinancial returns to business and society from marketing activities and
programs.
 Top management tries to examine what is happening to market share,
customer loss rate, customer satisfaction, product quality and other
measures.
 Financial Accountability- Marketers are being asked to justify their
investments to senior management in financial and profitability terms.
 Social Responsibility- The effects of marketing clearly extend beyond the
company and the customer to society as a whole. Marketers must be ethical,
environmental, legal and social context of their activities. Consumers
demand such behaviour.

MARKETING ENVIRONMENT
“A company marketing environment consists of the actors and the forces
that affect the company’s ability to develop and maintain successful
transactionsand relationships with its target customers.” ------– Philip Kotler

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Internal Environment
Internal environment refers to the factors existing within a marketing
firm.These factors are generally controllable in nature.The different internal
forces are:
• Top Management: The organizational structure, Board of Director,
professionalization of management...etc..Factors like the amount of support
the top management enjoys from different levels of employees,
shareholders and Board of Directors have important influence on the
marketing decisions and their implementation.
• Finance and Accounting: Accounting refers to measure of revenue and
costs to help the marketing and to know how well it is achieving its
objectives. Finance refers to funding and using funds to carry out the
marketing plan. Financial factors are financial policies, financial position
and capital structure.
• Research and Development: Research and Development refers to
designing the product safe and attractive. They are technological
capabilities, determine a company ability to innovate and compete.
• Manufacturing: It is responsible for producing the desired quality and
quantity of products.Factors which influence the competitiveness of a firm
are production capacity technology and efficiency of the productive
apparatus, distribution logistics etc.,
• Purchasing: Purchasing refers to procurement of goods and services from
some external agencies. It is the strategic activity of the business
• Company Image and Brand Equity: The image of the company refers in
raising finance, forming joint ventures or other alliances soliciting
marketing intermediaries, entering purchase or sales contract, launching
new products etc.
External factors
External factors are beyond the control of a firm, its success depends to a
large extent on its adaptability to the environment.The external marketing
environment consists of:

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 a) Macro environment, and b) Micro environment

Micro environment

 The microenvironment consists of the factors close to the company that

affect its ability to serve its customers—the company, suppliers,
marketing intermediaries, customer markets, competitors, and publics.
 It implies the factors and forces in the immediate environment which affect
the company’s ability to serve its market.
 The micro environment factors are:
• Suppliers
• Competitors
• Market Intermediaries
• Public
• Customers

Company

 In designing marketing plans, marketing management takes other company

groups into account—groups such as top management, finance, research
and development (R&D), purchasing, operations, and accounting. All of
these interrelated groups form the internal environment.
 Top management sets the company’s mission, objectives, broad strategies,
and policies.
 Marketing managers make decisions within the strategies and plans made
by top management.

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  Marketing managers must work closely with other company departments.
Other departments have an impact on the marketing department’s plans and
actions. And, under the marketing concept, all of these functions must
“think consumer.”
 Ex: To provide a great customer experience, Xerox must “find out what
customers are facing—what their problems and opportunities are. Everyone
at Xerox shares this responsibility. That includes people and departments
that have not always been customer-facing, like finance, legal, and human
resources.

Suppliers

 Suppliers form an important link in the company’s overall customer value

delivery network.
 They provide the resources needed by the company to produce its goods
and services.
 Supplier problems can seriously affect marketing. Marketing managers
must watch supply availability and costs. Supply shortages or delays, labor
strikes, and other events can cost sales in the short run and damage
customer satisfaction in the long run.
 Rising supply costs may force price increases that can harm the company’s
sales volume.
 Most marketers today treat their suppliers as partners in creating and
delivering customer value.
 For example, Toyota knows the importance of building close relationships
with its suppliers. Rather than bullying suppliers, Toyota partners with
them and helps them meet its very high expectations. Toyota learns about
their businesses, conducts joint improvement activities, helps train supplier
employees, gives daily performance feedback, and actively seeks out
supplier concerns. It even recognizes top performers with annual
performance awards. High supplier satisfaction means that Toyota can rely
on suppliers to help it improve its own quality, reduce costs, and quickly
develop new products.
 In all, creating satisfied suppliers helps Toyota produce lower-cost, higher-
quality cars, which in turn results in more satisfied customers.

Marketing intermediaries

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  Marketing intermediaries help the company promote, sell, and distribute its
products to final buyers.
 They include resellers, physical distribution firms, marketing services
agencies, and financial intermediaries.
 Resellers are distribution channel firms that help the company find
customers or make sales to them. These include wholesalers and retailers
who buy and resell merchandise.
 Physical distribution firms help the company stock and move goods from
their points of origin to their destinations.
 Marketing services agencies are the marketing research firms, advertising
agencies, media firms, and marketing consulting firms that help the
company target and promote its products to the right markets.
 Financial intermediaries include banks, credit companies, insurance
companies, and other businesses that help finance transactions or insure
against the risks associated with the buying and selling of goods.
 Today’s marketers recognize the importance of working with their
intermediaries as partners rather than simply as channels through which
they sell their products.
 Ex: When Coca-Cola signs on as the exclusive beverage provider for a
fast-food chain, such as McDonald’s, or Subway, it provides much more
than just soft drinks. It also pledges powerful marketing support. Coca-Cola
assigns cross-functional teams dedicated to understanding the finer points
of each retail partner’s business. It conducts a staggering amount of
research on beverage consumers and shares these insights with its partners.
Coca-Cola Food Service’s Web site, www.CokeSolutions.com, provides
retailers with a wealth of information, business solutions, and
merchandising tips.

Competitors

 The marketing concept states that, to be successful, a company must

provide greater customer value and satisfaction than its competitors do.
Thus, marketers must do more than simply adapt to the needs of target
consumers. They also must gain strategic advantage by positioning their
offerings strongly against competitors’ offerings in the minds of
consumers.
 No single competitive marketing strategy is best for all companies. Each
firm should consider its own size and industry position compared to those
of its competitors.
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  Large firms with dominant positions in an industry can use certain
strategies that smaller firms cannot afford. But being large is not enough.
There are winning strategies for large firms, but there are also losing ones.
And small firms can develop strategies that give them better rates of return
than large firms enjoy.

Publics

 A public is any group that has an actual or potential interest in or impact

on an organization’s ability to achieve its objectives.
 Seven types of publics:
 Financial publics. This group influences the company’s ability to obtain
funds. Banks, investment analysts, and stockholders are the major financial
publics.
 Media publics. This group carries news, features, and editorial opinion. It
includes newspapers, magazines, television stations, and blogs and other
Internet media.
 Government publics. Management must take government developments
into account. Marketers must often consult the company’s lawyers on
issues of product safety, truth in advertising, and other matters.
 Citizen-action publics. A company’s marketing decisions may be
questioned by consumer organizations, environmental groups, minority
groups, and others. Its public relations department can help it stay in touch
with consumer and citizen groups.
 Local publics. This group includes neighborhood residents and community
organizations. Large companies usually create departments and programs
that deal with local community issues and provide community support. For
example, the P&G Tide Loads of Hope program recognizes the importance
of community publics. It provides mobile laundromats and loads of clean
laundry to families in disaster-stricken areas.
 General public. A company needs to be concerned about the general
public’s attitude toward its products and activities. The public’s image of
the company affects its buying.
 Internal publics. This group includes workers, managers, volunteers, and
the board of directors. Large companies use newsletters and other means to
inform and motivate their internal publics. When employees feel good
about the companies they work for, this positive attitude spills over to the
external publics.

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Customers

 The aim of the entire value delivery network is to serve target customers
and create strong relationships with them. The company might target any
or all five types of customer markets.
 Consumer markets consist of individuals and households that buy goods
and services for personal consumption.
 Business markets buy goods and services for further processing or use in
their production processes, whereas reseller markets buy goods and
services to resell at a profit.
 Government markets consist of government agencies that buy goods and
services to produce public services or transfer the goods and services to
others who need them.
 International markets consist of these buyers in other countries, including
consumers, producers, resellers, and governments. Each market type has
special characteristics that call for careful study by the seller.

The Macro Environment

 The macro environment consists of the larger societal forces that affect
the microenvironment—demographic, economic, natural, technological,
political, and cultural forces.

The Demographic Environment

 Demography is the study of human populations in terms of size, density,

location, age, gender, race, occupation, and other statistics. The
demographic environment is of major interest to marketers because it
involves people, and people make up markets.
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  Ex: The U.S. population is currently about 310 million and may reach
almost 364 million by 2030. The single most important demographic trend
in the United States is the changing age structure of the population. The
Web site www.Disaboom.com reaches people with disabilities through
social-networking features akin to Facebook combined with relevant
information, everything from medical news to career advice, dating
resources, and travel tips. Several large marketers, including J&J, GM, and
Ford advertise on Disaboom.com.

Economic Environment

 The economic environment consists of economic factors that affect

consumer purchasing power and spending patterns.
 Nations vary greatly in their levels and distribution of income. Some
countries have industrial economies, which constitute rich markets for
many different kinds of goods. At the other extreme are subsistence
economies; they consume most of their own agricultural and industrial
output and offer few market opportunities. In between are developing
economies that can offer outstanding marketing opportunities for the right
kinds of products.
 Ex: India’s Tata Motors, which markets the least expensive car ever in the
world, the Tata Nano. Dubbed “the people’s car,” the Nano sells for just
over 100,000 rupees (about US$2,500). It can seat four passengers, gets 50
miles per gallon, and travels at a top speed of 60 miles per hour. The
ultralow-cost car is designed to be India’s Model T—the car that puts the
developing nation on wheels. “Can you imagine a car within the reach of
all?” asks a Nano advertisement. “Now you can,” comes the answer. Tata
hopes to sell one million of these vehicles per year.

Natural Environment

 The natural environment involves the natural resources that are needed as
inputs by marketers or that are affected by marketing activities.
 Marketers should be aware of several trends in the natural environment.
The first involves growing shortages of raw materials. A second
environmental trend is increased pollution. A third trend is increased
government intervention in natural resource management.
 Ex:PepsiCo recently introduced new half-liter bottles of its Lipton iced tea,
Tropicana juice, Aquafina FlavorSplash, and Aquafina Alive beverages
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 that contain 20 percent less plastic than the original packaging. Aquafina
has trimmed the amount of plastic used in its bottles by 35 percent since
2002, saving 50 million pounds of plastic annually

Technological Environment

 Technological forces are most dramatic forces which are changing rapidly.
These macro-economic forces create new markets and opportunities for
marketers. For example a PC to Laptop and laptop to Palmtop is happen
due to technological force which really change and business strategies and
decision making process.
 Ex: Clothing retailer American Apparel uses RFID to manage inventory in
many of its retail stores. Every stocked item carries an RFID tag, which is
scanned at the receiving docks as the item goes into inventory.

Legal environment

Organizations are very susceptible to change in laws and interpretations done by

courts. Example: For instance, some people have sued McDonald’s blaming
McDonald’s hamburger lead them to obesity. There is not much that firms can
do about several laws. For example, some laws require organizations to make
disclosure to customers about the applied interest rate they will be paying for
product purchased on instalments.

Social and Cultural environment

Cultural factors in heritage, living styles, religion etc. also affects a company
marketing strategy. Social responsibility also become the part of marketing and
slowly emerged in marketing literature. Socially responsible marketing is that
business firms should take the lead in eliminating socially harmful products.

Political environment
It includes Government actions, Government legislations, public policies and act
which affect the operations of a company or business. These forces may affect
an organization on local, regional, national or international level. So marketers
and business management pay close attention to the political forces to judge how
government actions which will affect their company.

CONCEPTUAL FRAMEWORK

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 The conceptual framework of marketing defines the overall planning,
strategic process, goals and objectives of marketing.
 The diagram summarizes the major activities involved in managing
Customer-Driven Marketing Strategy and the developing an Integrated
Marketing Mix.
 Customers stand in the centre. The goal is to create value for customers and
build strong and profitable customer relationships.
 Next comes, marketing strategy, the company decides which customers it
will serve (segmentation and targeting) and how it will serve them
(differentiation and positioning).
 It identifies the total market, then divides it into smaller segments, selects
the most promising segments, and focuses on serving and satisfying
customers in these segments.
 Guided by marketing strategy, the company designs an integrated
marketing mix made up of factors like- product, price, place and promotion
(4Ps).
 To find the best marketing strategy and mix, the company engages in
marketing analysis, planning, implementation and control.

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 Through these activities, the company watches and adapts to the actors and
forces in the marketing environment.
 The main focus of this conceptual framework is on creating and delivering
value to the customer in order to maintain long term relationship in two
prominent ways, which are as follows:
1. Customer-driven marketing strategy:
 A sound marketing requires a careful customer analysis. Each company
must divide-up the total market, choose the best segments and design
strategies for profitably serving chosen segments. This process involves:
• Market segmentation.
• Target marketing.
• Market differentiation and positioning.
 These elements are commonly known as STP.
2. Developing an integrated marketing mix:
 The company is ready to begin planning the details of the marketing mix.
The marketing mix is the set of controllable, tactical marketing tools that
the firm blends to product the response it wants in the target market.
 Various possibilities can be collected into four groups of variables known
as “the four Ps” as shown in the diagram.

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 It holds that the four Ps concepts take the seller’s view of the market, not
the buyer’s view. From the buyer’s viewpoint, in the age of customer
relationships, the four Ps might be better described as the four Cs.

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