Unit- 2

Global Marketing Environment

MCQ- https://www.eguardian.co.in/global-business-environment/

Israel : https://www.youtube.com/watch?v=3es47IkcYDs&t=30s
Japan: https://www.youtube.com/watch?v=9tt9BaS5KJY&t=34s
 Key Environments

• Marketing Environment
– The actors and forces that affect a firm’s
ability to build and maintain successful
relationships with customers.

4-3
 Key Environments

• Aspects of the marketing environment:

– Microenvironment:
• Actors close to the company
– Macroenvironment
• Larger societal forces

4-4
 The Microenvironment

• Departments within the company impact

marketing planning.
4-5
 The Microenvironment

• Suppliers help to create and deliver customer

value.
– Treat suppliers as partners.
4-6
 The Microenvironment

• Marketing intermediaries help to sell, promote,

and distribute goods.
– Intermediaries take
many forms.
• Resellers
• Physical
distribution firms
• Marketing services
agencies
• Financial
intermediaries

4-7
 The Macroenvironment

• Customer markets must be studied.

• Market types
– Consumer
– Business
– Government
– Reseller
– International
4-8
 The Macroenvironment

• Successful companies provide

better customer
value than the competition
– Size and industry position
help to determine the competitive
strategy.

4-9
 The Macroenvironment

Various publics must also

be considered.
– Government – Local
– Media – General
– Financial
 Citizen Action Groups
4 - 10
 Actors in the
Microenvironment
• What is a microenvironment in marketing?
• The microenvironment in marketing is
closely linked to your business and directly
affects marketing operations. It includes
factors like customers, suppliers, business
partners, vendors, and even competitors.
Microenvironment factors are controllable to
some extent.
Major Macro environmental
Forces
What is a macro marketing environment?
• Your macro marketing environment is made up of
all the factors beyond the control of your
organization. An easy way to remember these
factors is by using the PESTLE acronym, which
stands for:
• P: Political factors
• E: Economic factors
• S: Social and demographic factors
• T: Technological advancement factors
• L: Legal and regulatory factors
• E: Environmental factors
 Dell

• Michael Dell founded Dell Computer Corporation with

$1,000 when he was a college student at the University of
Texas at Austin in 1984. Today Dell is the world’s leading
direct computer systems company with annual revenues in
excess of $40 billion and over 34,000 employees.
 The Marketing Environment
• The marketing environment consists of all factors external to
an organization that can affect the organization’s marketing
activities.

Exhibit 2-1
 Identifying Market Opportunities and Threats

• Many firms use environmental scanning to identify

important trends and determine whether they represent
present or future market opportunities or threats.
• Exhibit 2-2
 The Social Environment
• The social environment includes all factors and trends
related to groups of people, including their number,
characteristics, behavior, and growth projections.

Number of
People

Growth Social Characteristics

Projection
Environment

Behavior
 The Demographic Environment
• The demographic environment refers to the size,
distribution, and growth rate of groups of people
with different characteristics.
• The demographic characteristics of interest to
marketers relate in some way to purchasing behavior,
because people from different countries, cultures,
age groups, or household arrangements often exhibit
different purchasing behaviors.
• A global perspective requires that marketers be
familiar with important demographic trends around
the world as well as within the United States.
Population Estimate —Year 2025
Exhibit 2-3
 Demographic Trends
• World and country population statistics are
important, but most marketers target
subgroups. Trends in population subgroups
are typically the most useful to marketers, for
example, the growth of the urban population.
 Demographic Trends
• Another interesting trend is the aging of
the population. The aging of the
population is especially evident in Italy,
Japan, Britain, and the United States.
 The Cultural Environment
• The cultural environment refers to factors and
trends related to how people live and behave.

Values

Subgroup Ideas
Activities Cultural
Factors

Beliefs Attitudes
 Cultural Diversity
– Cultural differences are important in both international
and domestic markets.
– Much of the population and buying power growth in the
United States is and will be from multicultural groups.

Exhibit 2-6
 Changing Roles
– As more women enter
the workforce and
household compositions
change, typical household
roles are altered.
– Tremendous market
opportunities exist for
firms that can develop
effective strategies for
appealing to these
changing roles.
Emphasis on Health & Fitness
• The pursuit of a more healthful lifestyle
includes:
– eating more nutritious foods
– exercising regularly
– participating in various sports activities
– focusing on wellness.
• This translates into potential market
opportunities for firms that provide products
and services geared toward improving health
and fitness.
 The Desire for Convenience
• Increased desire for convenience created by:
– Changes in household composition
– Increases in the number of working women
– General shortage of time
 Consumerism
• Consumerism is the movement to
establish and protect the rights of
buyers.
• One increasingly important
consumer issue is environmentalism.
• Successful marketers can respond by
developing environmentally safe
products and communicating their
environmental contributions.

• Television with connection

 The Economic Environment
• The economic environment includes factors and
trends related to income levels and the
production of goods and services.
• Economic trends in different parts of the world
can affect marketing activities in other parts of
the world.
• The gross domestic product (GDP) represents
the total size of a country’s economy measured
in the amount of goods and services produced.
The Political/Legal Environment
• The political/legal environment encompasses factors and
trends related to governmental activities and specific laws
and regulations that affect marketing practice.

Global
Trends

Political
Legal
Environment
Regulation Legislation
 Global Political Trends
• In today’s world economy, international political
events greatly affect marketing activities. For
example the impact of the war on terrorism on
the travel and security industries.
• A second important political trend is movement
toward free trade and away from protectionism.
Studies show that countries with the freest trade
have the highest GDP growth.
Legislation
 Regulations and Regulatory Agencies
• Most legislation in the United States is
enforced through regulations developed by a
variety of agencies, and marketers must
often work with regulatory authorities at the
federal, state, and local levels.
The Technological Environment
• The technological environment includes
factors and trends related to innovations
that affect the development of new
products or the marketing process.
• These technological trends can provide
opportunities for new product
development, affect how marketing
activities are performed, or both.
The Competitive Environment
• The competitive environment consists of
all the organizations that attempt to serve
similar customers.
Brand Competitors The most direct competition, offering the
same types of products as competing firms.
For example, Nike is a brand competitor of
Reebok as both companies manufacture
shoes.

Product Offer different types of products to satisfy

Competitors the same general need. Domino’s Pizza,
McDonald’s, and Kentucky Fried Chicken
are product competitors.
The Institutional Environment
• The institutional environment consists of all
the organizations involved in marketing
products and services.
Market
Retailers
Research Firms

Advertising Suppliers

Wholesalers Customers
 The Future
– The only certainty about the future is that
it will be uncertain, and change will occur
at an increasing rate.
– It will also be more complex.
– Businesses and consumers now must
operate in an era of terrorism and lack of
trust.
 Summary
• After studying this chapter, you should be able to:
– Understand the nature of the marketing environment and
why it is important to marketers.
– Describe the major components of the social environment
and how trends in the social environment affect marketing.
– Understand how the economic environment affects
marketing.
– See how the political/legal environment offers
opportunities and threats to marketers.
– Appreciate the importance of the technological
environment to marketers.
– Understand differences in the competitive environment.
– Know how changes in the institutional environment affect
marketers.
• What are the challenges of defining a marketing
environment?
• We can't downplay the benefits of defining and
monitoring your marketing environment. Still, there is
only so much we can accurately predict. Even with 
technological advancements, predictive software tools,
and a keen eye on the marketing environment, some
changes can't be forecasted or controlled. 
• Techniques that work in one marketing environment
may not work in the next. For businesses operating in
multiple regions, this may prove a considerable
challenge. The speed of change in the macro
marketing environment may make it seem
unnecessary to monitor and predict the environment. 
• Business and marketing teams must stay nimble,