Marketing Environment

Before we start with marketing environment it is important to know what a market is and how can marketing be defined as. A market is any structure that allows buyers and sellers to exchange any type of goods, services and information. •The market facilitates trade and enables the distribution and allocation of resources in a society. •Markets allow any tradable item to be evaluated and priced. A market emerges more or less spontaneously or is constructed deliberately by human interaction in order.

•Marketing can basically be looked upon as the interaction between marketing mix variables and environmental variables. •It is only with the help of marketing variables, that the market managers tackle the environmental variables. •Marketing is an ongoing process of planning and executing the marketing mix for products, services or ideas to create exchange between individuals and organizations. According to Kotler “Marketing is a social and managerial process by which individuals and groups obtains what they need and want through creating, offering and exchanging products of value with others”.

The American Marketing Association defines marketing as:- “The performance of business activities that direct the flow of goods and services from producers to consumers or users”. •Marketing tends to be seen as a creative industry, which includes advertising, distribution and selling. • It is also concerned with anticipating the customers’ future needs and wants, which are often discovered through market research. •Essentially, marketing is the process of creating or directing an organization to be successful in selling a product or service that people not only desire, but are willing to buy.

In the words of Stanton “ Marketing is a total system of interacting business activities designed to plan ,price, promote and distribute want satisfying products and services to present and potential customers”. Therefore good marketing must be able to create a “proposition” or set of benefits for the end customer that delivers value through products or services.

Government agencies, political parties, pressure groups and laws create tremendous pressure and constraints for marketing management. •Laws affect product design, pricing and promotion. Irrespective of the political ideologies, intervention in the marketing process has become common in every nation. •The legal environment is also referred to as public policy environment. The vast government network of laws and regulation, policy decisions, government bureaucracy and the legislative processes have varied impact on marketing strategies. •Multinationals like Coca Cola and IBM had to flee India during 1977 due to a hostile political environment.

The positive political situation has permitted these corporations to again operate in the country. The impact of political and legal forces may be summarized as under: ? Substantial amount of legislation regulating business exists to protect consumers from unfair business practices, to avoid unfair competition, to safeguard small firms and to conserve foreign exchange. ?Marketing managers are required to get full knowledge and understanding of political and legal forces for achieving their goals. Political factors include government regulations and legal issues and define both the formal and informal rules under which the firm must operate.

For example •Tax policy •Employment laws •Environmental regulations •Trade restrictions and tariffs •Political stability •Study and knowledge of economic forces is essential to preparing effective marketing plans. •Anticipation of future economic conditions will enable the firm to devise appropriate marketing strategies. Under economic environment, a marketing manager generally studies the following factors and trends: •Trends in cross national product and real income growth •Pattern of income distribution •Variations in geographical income distribution and trends •Expenditure patterns and trends Trends of consumer savings and how consumers like to hold their savings •Borrowing pattern, trends and governmental and legal restrictions •Major economic variables Economic factors affect the purchasing power of potential customers and the firms cost of capital. For example •Economic growth •Interest rate •Exchange rates •Inflation rates •Economic conditions affect marketing directly because such organizations are themselves a part of the market place. For instance, the costs of all inputs positively respond to upward swing of economic condition. •This will affect the output price and consequentially affect the sales.