Faculty of Management and Administrative Sciences

Report of Market Envirnoment

Hamza Adeel…………….18272720-008
Shawaiz Haider……….18272720-112
Kinza Kousar……………....18272720-062
Farkhanda shazadi…………..18272720-002
Saira rana……………….18272720-018

18272720-112@uog.edu.pk
Pro.Tasaddque Hussain
Sec (B)
M.B.A (3.5)
2nd Samester

April, 30, 2019

 Table Of Content
Micro Envirnoment and its Components.................................................................................................. 3
Definition ................................................................................................................................................. 3
1. The company ................................................................................................................................... 3
2. Suppliers: ......................................................................................................................................... 3
3. Marketing Intermediaries: ............................................................................................................. 4
4. Competitors: .................................................................................................................................... 5
5. Public: .............................................................................................................................................. 5
The Company's Macro environment......................................................................................................... 6
1. Demographic Environment ............................................................................................................ 6
2. Economic Environment .................................................................................................................. 9
3. Natural Environment.................................................................................................................... 11
4. Technological Environment ......................................................................................................... 12
5. Political Environment ................................................................................................................... 14
6. Culture Environment.................................................................................................................... 15
Micro Envirnoment and its Components

Definition
“The micro environment in marketing includes all those micro factors that impact on business
strategy, decision making and performance. It is very important for business success to conduct
macro environment and micro environment analysis before decision-making process. Macro
environment include political, economic social, technological, and legal factors. On the other
hand, company micro of the environment factors includes customers, suppliers, competitors,
employees, shareholders and media.”

There are five components related with the micro environment of an organization. These
components are as follows.

1. The company
2. Suppliers
3. Marketing Intermediaries
4. Competitors
5. Public

Let’s discuss each of the above components below.

1. The company

“The organization itself is the first micro environmental element which focuses on the position of
the organization that it performs in the micro environment. The mission of statement & long term
goals or objectives of the organization are firstly urbanized by the top management of the
organization. After which the tactical strategies, short term goals & policies are prepared through
the middle level management, which are followed by the purposeful goals. The top management
of the organization has limited the area in which marketing manager takes his decisions. The
marketing manager works in association with other departments of the Business
Organization because most of the activities of the entire organization are interrelated among each
other. Also the broader managerial goals are common for all the departments of the
organization like purchasing department, Research and Development department, production
department etc. The main focus of all the departments must be the customer leaning behavior
that ensures the delivery of superior significance to customers and this is made probable through
the hard work of the marketing department.”

2. Suppliers:

“Suppliers are the second micro environments component, which are those organizations that
deliver the compulsory resources to all the challenging organizations for the production of goods
or services. The delivery of superior value to the customers is made possible throughout the
useful linkage of the suppliers. The availability of the supplies is lastingly watched by the
organization to ensure the smooth working of its operations. The prices of the key contributions
are also analyzed by the management of the organization because it directly affects the costs of
the organization which is resultantly manipulating the value of its final products. So any add to
in the price of inputs is carefully analyzed. Actions of a supplier can pressure the business
strategy, as they give the materials for production. For instance, if their services will not
sensible and timely that will have an effect on the production time and the sales due to
postponed procedure of production”

3. Marketing Intermediaries:

“The organizations that assist inside promoting, selling & distribution of products to final
customers of definite organization are called marketing intermediaries and are the measured the
utmost factors the micro environments. Marketing intermediaries include the following.”

 Resellers:

“The organizations perform as distribution channels in searching of customers for a particular

organization and also serving in making sales for it. They may take the form of the wholesaler or
retailer that performs the role of purchasing & reselling of products from definite manufacturing
organizations. The expenditure of the organization are cheap with the use of the services of
resellers, but it can reason troubles in the silky running of the entire system.”

 Physical Distribution Firms:

“These are the firms that are supportive in distribution of goods from the manufacturing region
to the selling points. The warehouse is a general example of such physical distribution firms.”

 Marketing Service Agencies:

“The targeting & promotion of the products of an organization is done efficiently with the help
of marketing service agencies.”

 Financial Intermediaries:

“The funding is provided with the help of financial intermediaries like banks etc, which assure
the risks of the organization.”

 Customers:

“The customer market necessity be directly study by the organization because there are more
than one customer markets with their own exclusive features.”

 Consumer Market:
“It consists of household customers that buy the goods or services of the organization for final
utilization.”

 Business Market:

“These integrated other organizations that purchase the goods or services for the consumption in
their production processes.”

 Reseller Market:

“It consists of firms that acquire the goods in array to resell them for profit.”

 Government Market:

“It consists of agencies that obtain goods or services for the production & distribution of public
services.”

 International Market:

“It include buyer belong to foreign countries.”

4. Competitors:

“Every organization faces the competition with definite competitors. So the competing
organization should build up such effective strategy that can convincingly position its products in
the competing market. There is no on its own strategy which can be valuable for all
organizations. This micro environment component has great significance as well as analyzed
deeply. The competitors of an organization can have a direct impact on business
strategies. The organization must know how to do the can competitive analysis of
competitors and have a competitive advantage Anthe organization must recognize what
value added services their competitor provided that or the exclusive selling point of their
competitors. How they can distinguish from their competitors. What remuneration a
company can present to the customers which competitors does not offer.”

5. Public:

“The last element of micro environment is a public, which include a group of individuals that can
pressure the aptitude of the organization to achieve it objectives. So the organization should
develops an valuable marketing plan for both the public as well as customers. Publics can obtain
the following form.”

Financial Public: “It can concern the capability of organization to obtain funds.”

Government Public: “It considers the developmental phase”

Citizen Public: “It includes consumer organizations that can inquiry the decisions of the
organization.”

Local Public: “It includes community organizations & locality people” General Public: “It just
include the general public.”

Internal Public: “It includes employees, managers and board of directors of an organization.”

Media Public: “It carries an perspective view, features & news.”

The Company's Macro environment

“The company and all the other actors operate in a larger macro environment of forces that shape
opportunities and pose threats to the company. The six most influential forces in the company's
microenvironment.”

1. Demographic Environment
“Demography is the study of human populations in terms of size, density, location, age, gentler,
race, occupation and other statistics. The demographic environment of considerable interest to
marketers because it involves people, and people make up markets. Here, we discuss the most
important demographic characteristics and trends in the largest world markets.”
* Population Size and Growth Trendy
“In any geographic market, population size and growth trends can be used to broad potential for
a wide range of goods and services. We often refer to the United States. Japan and Europe as the
'triad' markets. The European Union (EU) together with members of the European Free Trade
Area (EFTA), has a population of around 370 million. With another 120 million from eastern
Europe and 280 million from the former USSR, the overall European market will be significantly
larger than the North America Free Trade Area - the United States, Canada and Mexico with a
population of 370 million and Japan with 128 million. Marketers also view China, with 1.2
billion people, as a potentially lucrative growth market.Population growth trends are important
because they can offer marketers an indication of demand for curtain goods and services, A 'baby
boom' would suggest growing demand for infant foods, nursery appliances, maternity services,
baby clothing, toy sand so forth, in the short to medium term, with rising demand for family-size
accommodation, larger cars, schools and educational services over the longer term.Differences in
population growth patterns between country markets may also suggest different international
marketing opportunities for firms.”
• Changing Age Structure of a Population
“The most noticeable demographic shift in Europe, the United States and affluent Asian
countries is the changing age structure of the population. In all three groups, the national
populations are getting older, and the trend is forecast to continue over the next 50 years. The
ageing population structure reflects two influences. First, there is a long-term slowdown in birth
rate, so there are fewer young people to pull the population's average age down. Western
European countries, with the exception of Ireland, rank below the 2.1 children per
woman(fertility) level found in the United Slates, and well below the 3.3 world average. Italy,
reporting 1.3 children per woman, has the lowest fertility level in the world. Fertility rates in
Japan, Singapore, South Korea and Hong Kong have declined steadily over the last two decades,
and all he below America's 2.1 average. This’ birth-dearth' linked to smaller family sizes is due
to people's desire to improve personal living standards, women's desire to work outside the
home, and widely available and effective birth control practices. Secondly, as longevity increases
there are more elderly people to pull the average age of the population up. By 2031, 38 per cent
of the UKpopulation will be over 50 years old. Compare this with 32 per cent in 1991 and only
28 per cent in 1951. In Germany, the balance of people over 65 years of agate persons of
working age (or the dependency ratio) is expected to exceed 1:1 by 2031. Put more colourfully
by the historian and demographer Paternalist, ‘Europe and the West are growing older and will
never be young again.' The picture is repeated in developed Asian countries. Tine rapid ageing of
the Japanese population is one of the government's biggest long-term worries. Further, the
demographic change of longer life is not confined to advanced countries. In Latin America and
most of Asia, the share of over-60s is set to double between now and2030, to 14 per cent. In
China, it will increase from less than 10 per cent now to around 22 per cent in
2030.Demographic shifts have important implications for marketing managers.”
The Changing American Family
“The notion of an ideal family - mum, dad and two kids - has lately been losing some of its
lustre. People are marrying later and having fewer children. The specific figures may vary among
countries, but the general trend is towards fewer married couples with children. In fact, couples
with no children under 18 now make up a high proportion of all families. These are worrying
trends too for wealthy Asian countries like Singapore, Japan and Hong Kong. Also, the number
of working mothers is increasing. Marketers of goods ranging from cars, insurance and travel to
financial services are increasingly directing their advertising to working women. As a result of
the shift in the traditional roles and values of husbands and wives, with male partners assuming
more domestic functions such as shopping and child care, more food and house-hold appliance
marketers are targeting this group of individuals. Finally, the number of non-family households
is increasing. Many young adults leave home and move into apartments. Other adults choose to
remain single. Still others are divorced or widowed people living alone. By the year 2000,one-
person/non-family and single-parent households - the fastest growing category of households -
will represent a sizeable proportion of all households. In Sweden, for example, one-person
households now account for over 40 per cent off all homes.”
• Rising Number of Educated People

“As economies in eastern Europe and Asia develop, we may expect to see more money spent on
education. The proportion of the population that is educated will rise and the population, as a
whole, will become better educated. The rising number of educated people will increase the
demand for quality products, books, magazines and travel, In many developed and
industrializing countries, the workforce is also becoming more white collar. The most growth
comes in the following occupational categories: computers, engineering, science, medicine,
social service, buying, selling, secretarial, construction, refrigeration, health service, personal
service.”

Increasing Diversity
“In the 1990s, efforts towards European integration have escalated. The EU now comprises 15
member states - France, Luxembourg, Italy. Germany, with East Germany on unification,
Netherlands, Belgium, Denmark, Ireland, United Kingdom, Greece. Spain, Portugal, Sweden,
Austria and Finland. The EC's enlargement programme is still high on politicians' agendas.
Eastern and central European countries, including former Soviet bloc states, are seeking to
participate in theEU, which, in the longer term, could become a reality. The EU, in its present
state, and in a potentially enlarged form, presents huge challenges for domestic and international
marketers. In general, marketers operating, in the vastly expanded EU must recognize the great
diversity across member Mates. Unification strives to achieve harmonization of rules and
regulations, which will affect business practices across the Union. Many marketers believe the
single European market will lead to convergence in consumer tastes. Global advertising agencies
like Saatchi & Saatchi and Young and Rubicam were strong supporters of the idea of the "Euro
con sinner'. However, consumer needs, values, beliefs, habits and lifestyles differ across
individual country markets, just as spending power and consumption patterns arc likely to vary.
Businesses will docent, while the United States will drop to 18 per cent from 23 percent.
However, in June 1997, Asia's economic miracle came to an end. Economic and financial
turmoil struck some of the fastest growing countries in the region. The roots of the Asian
economic crisis van' from country to country. Generally, the seeds of trouble lay in headlong
economic growth and policies and practices that resulted in over-burdened financial systems.”
“ The Asian 'tiger' economies attracted floods of foreign investment which increased land and
asset prices. Lending soared. Authorities embarked on huge, often economically questionable,
infrastructure projects - new cities, railroads, highways, power stations - which brought little
return on investment. The region's currencies were pegged to the US dollar, which had been
appreciating in recent years. Country after country saw their currency depreciate as the crisis
unfolded. Moreover, the region’s exporters were gradually becoming uncompetitive. Many
countries suffered from 'crony capitalism' in which authorities encouraged banks to lend to
politically well connected businesses. Close neighbour, Japan, and the world's second biggest
economy, has also become vulnerable to the crisis, as its financial institutions are big lenders to
the rest of the region. Before the Asian financial crisis developed, it hood become almost an
article of faith that the region would maintain perpetual growth. Business analysts believe that,
where authorities are committed to appropriate reforms, recovery will be possible. Meanwhile,
authorities must adopt measures to arrest further decline and to prevent the turmoil from
spreading even wider. Although there has been a narrowing of the wealth and living standards
gap between the developed western and rising Asian countries in recent decades, the uncertain
economic climate in the Asian economies has important implications for international marketers.
They must determine how changing incomes affect purchasing power and how they translate into
marketing threats and opportunities for the firm. Where consumer purchasing power is reduced,
as in countries experiencing economic collapse or in an economic recession, value-far-money
becomes a key purchasing criterion. Marketers must pursue fact-based marketing to capture and
retain price-conscious customers during lean economic times, unlike boom periods when
consumers become literally addicted to personal consumption. ‘Rather than offering high quality
at a high price, or lesser quality at very low prices, marketers have to look for ways to offer the
more financially cautious buyers greater value -just the right combination of product quality and
good service at a fair price.10 Consumers with the greatest purchasing power are likely to belong
to the higher socioeconomic groups, whose rising incomes mean that their spending patterns are
5ess susceptible to economic downturns than lower-income groups. So, marketers must
determine a population's come distribution. The upper economic strata of a society become
primary targets for expensive luxury goods, the middle income groups are more careful about
spending, but can usually afford some luxuries sometimes, while the lower strata will afford only
basic food, clothing and shelter needs. In some countries, an underclass exists - people
permanently living on state welfare and/or below the poverty line - which has little purchasing
power, often struggling to make even the most basic purchases.”

2. Economic Environment
“Markets require buying power as well as people. The economic environment consists of factors
that affect consumer purchasing power and spending patterns. Marketers should he aware of the
following predominant economic trends. Income Distribution and Changes in Purchasing Power
Global upheavals in technology and communications over the 1990s brought about a shift in the
balance of economic power from the West (mainly North American, Canadian and western
European nations) towards the rapidly-expanding economies of the Asian Pacific Rim. Many of
the Asian 'tiger ‘economies, notably South Korea, Thailand, Malaysia, Indonesia and Singapore,
were enjoying annual growth rates in excess of 7 per cent, compared to the per cent found in
western Europe and the USA. Official statistics suggest that, by 2010, purchasing power income
per head in countries like Singapore and South Korea will exceed that of the United States.
Economic growth projections suggest that Europe will drop down the economic rankings.
Assuming annual growth in western Europe and the United States of 2.5 per cent, and 6 per cent
in Asia as a whole, the share of world grows domestic product (C.DP) taken by Asian developing
countries, including China and India, could rise to 28 per cent in 2010 from 18 per cent in 1990.
Western Europe's share will fall to 17 per cent from 22 percent, while the United States will drop
to 18 per cent from 23 per cent Pin June 1997, Asia's economic miracle came to an end.
Economic and financial turmoil struck some of the fastest-grow ing countries in the region. The
roots of the Asian economic crisis van' from country to country. Generally, the seeds of trouble
lay in headlong economic growth and policies and practices that resulted in over-burdened
financial systems. The Asian 'tiger' economies attracted floods of foreign investment which
increased land and asset prices. Lending soared. Authorities embarked on huge, often
economically questionable, infrastructure projects cities, railroads, highways, power stations -
which brought little return on investment. The region's currencies were pegged to the US dollar,
which had been appreciating in recent years. Country after country saw their currency depreciate
as the crisis unfolded. Moreover, the region's exporters were gradually becoming uncompetitive.
Many countries suffered from 'crony capitalism' in which authorities encouraged banks to lend to
politically well connected businesses. Close neighbour, Japan, and the world's second biggest
economy, has also become vulnerable to the crisis, as its financial institutions are big lenders to
the rest of the region. Before the Asian financial crisis developed, it hood become almost an
article of faith that the region would maintain perpetual growth. Business analysts believe that,
where authorities are committed to appropriate reforms, recovery will be possible. Meanwhile,
authorities must adopt measures to arrest further decline and to prevent the turmoil from
spreading even wider.”
Although there has been a narrowing of the wealth and living standards gap between the
developed western and rising Asian countries in recent decades, the uncertain economic climate
in the Asian economies has important implications for international marketers. They must
determine how changing incomes affect purchasing power and how they translate into marketing
threats and opportunities for the firm. Where consumer purchasing power is reduced, as in
countries experiencing economic collapse or in an economic recession, value-far-money
becomes a key purchasing criterion. Marketers must pursue vaktv-based marketing to capture
and retain price-conscious customers during lean economic times, unlike boom periods when
consumers become literally addicted to personal consumption. ‘Rather than offering high quality
at a high price, or lesser quality at very low prices, marketers have to look for ways to offer the
more financially cautious buyers greater value just the right combination of product quality and
good service at a fair price.10 Consumers with the greatest purchasing power are likely to belong
to the higher socioeconomic groups, whose rising incomes mean that their spending patterns are
susceptible to economic downturns than lower-income groups. So, marketers must determine a
population's come distribution. The upper economic strata of a society become primary targets
for expensive luxury goods, the middle income groups are more careful about spending, but can
usually afford some luxuries sometimes, while the lower strata will afford only basic food,
clothing and shelter needs.
“ In some countries, an underclass exists people permanently living on state welfare and/or
below the poverty line - which has little purchasing power, often struggling to make even the
most basic purchases. Changing Consumer Spending Patterns the total expenditures made by
households tend to van' for essential categories of goods and services, with food, housing and
transportation often using up most household income. Marketers also want to identify how
spending patterns of consumers at different income levels vary. Some of these differences were
noted over a century ago by Ernst Engel, who studied how people shiftied their spending as their
income rose. He found that as family income rises, the percentage spent on food declines, the
percentage spent on housing remains constant electricity and public service Natural Environment
natural environment The natural environment involves the natural resources that are needed as
inputs Natural resources that by marketers or that are affected by marketing activities.
Environmental are needed us inputs by concerns have grown steadily during the past two
decades. Protection of the natural environment will remain a crucial worldwide issue facing
business and the affected by marketing public. In many cities around the world, air and water
pollution have reached dangerous levels. Concern continues to mount about the depletion of the
earth's ozone layer and the resulting 'greenhouse effect’s dangerous warming of the earth. And
many of us fear that we will soon he buried in our own rubbish. Marketers should be aware of
four trends in the natural environment.”

3. Natural Environment
“ The natural environment involves the natural resources that are needed as inputs Natural
resources that by marketers or that are affected by marketing activities. Environmental are
needed us inputs by concerns have grown steadily during the past two decades. Protection of the
natural environment will remain a crucial worldwide issue facing business and the affected by
marketing public. In many cities around the world, air and water pollution have reached
dangerous levels. Concern continues to mount about the depletion of the earth's ozone layer and
the resulting 'greenhouse effect', a dangerous warming of the earth.And many of us fear that we
will soon he buried in our own rubbish. Marketers”
• Shortages of Raw Materials
“Air and water may seem to be infinite resources, hut some groups sec long-run dangers. They
warn of the potential dangers that propellants used in aerosol cans pose to the ozone layer. Water
shortage is already a big problem in some parts of the world. Renewable resources, such as
forests and food, also have to be used wisely. Companies in the forestry business are required to
reforest timberlands in order to protect the soil and to ensure enough wood supplies to meet
future demand. Food supply can be a critical problem because more and more of our limited
farmable land is being developed for urban areas. On-renewable resources, such as oil, coal and
various minerals, pose a serious problem. Firms making products that require these increasingly
scarce resources face large cost increases, even if the materials do remain available. They may
not find it easy to pass these costs on to the consumer. However, firms engaged in research and
development and in exploration earn help by developing new sources and materials.”
• Increased Cost of Energy
“One non-renewable resource oil has created the most serious problem for future economic
growth. The large industrial economies of the world depend heavily on oil. and until economical
energy substitutes can be developed, oil will continue to dominate the world political and
economic picture. Big increases in the price of oil during the 1970s, and dramatic events like the
1991 Gulf War that affect oil availability, have spurred the search for alternative forms of
energy. Many companies are searching for practical ways to harness solar, nuclear, wind and
other forms of energy. In fact, hundreds of firms already offer products that use solar energy for
heating homes and other uses. Others are directing their research and development efforts to
produce high energy-efficient technologies to meet customers needs.”
For example:
the tyre company Michelin recently introduced its energy low-resistance tyres that are said to
offer a 5 per cent reduction in fuel consumption. Car makers Ford, Volkswagen, Opel and
Peugeot-Citron have all produced a new generation of sophisticated compact cars whose small
dimensions and low weight make them the front-runners in the race towards the
environmentalists' 'year-2000 holy grail" - fuel consumption of just 3 litres per 100km.11

4. Technological Environment
“The technological environment is perhaps the most dramatic force now shapingour destiny.
Technology has released such wonders as penicillin, organ transplants and notebook computers.
It has also released such horrors as the nuclear bomb, nerve gas and the machine gun, and such
mixed blessings as cars, televisions and credit cards. Our attitude towards technology depends on
whether weare more impressed with its wonders or its blunders.Every new technology replaces
an older technology. Transistors decimated the vacuum-tube industry, xerography killed the
carbon-paper business, ears and roads hurt the railways, and compact discs hurt vinyl records.
When old industries fought or ignored new technologies, their businesses declined.New
technologies create new markets and opportunities. The marketer should watch the following
trends in technology.Fast Pace of Technological Change Many of today's common products were
not available a hundred years ago: televisions, home freezers, automatic dishwashers, electronic
computers, contraceptives,earth satellites, personal computers, compact disc players,
videoeassette recorders,facsimile machines, mobile phones. The list is unending! Companies that
fail to anticipate and keep up with technological change soon find their products outdated.But
keeping pace with technological change is becoming more challenging for firms today.
Technology life cycles are getting shorter. Take the typewriter. The first generation modern
mechanical typewriter dominated the market for 25 years. Subsequent generations had shorter
lives - 15 years for electromechanical models,7 years for electronic versions and 5 years Tor
first-generation microprocessor-based ones. Other examples of fast technological change are
found. The average life of some computer software products, for example, is now well under one
year.Firms must track technological trends and determine whether or not these changes will
affect their products' continued ability to fulfil customers' needs.”
• increased Pollution
“Industry has been largely blamed for damaging the quality of the natural environment. The
'green' movement draws attention to industry's 'dirty work': the disposal of chemical and nuclear
wastes, the dangerous mercury levels in the ocean, the quantity of chemical pollutants in the soil
and food supply, and the littering of the environment with non-biodegradable bottles, plastics
and other packaging materials. Many companies, especially those at the 'grubbier' ends of
manufacturing, often complain about the cost of fulfilling their obligations to 'clean up'
regulations or to produce new greener technologies. On the other hand, more alert managers have
adapted quickly to rising public environmental concerns, which Many firms are responding to
public environmental concerns with more ecologically sensitive goods, recyclable or
biodegradable packaging, improved pollution controls and more energy-efficient operations.
Niche green markets, where environmentally sensitive consumers are prepared to pay a premium
price for green benefits, have emerged in sectors ranging from cosmetics, toiletries and
detergents to passenger cars. However, most consumers worldwide are more likely to make
trade-offs between green advantages and product quality and performance benefits in their
purchasing decision. So, although environmental pressures upon businesses in the decade ahead
are expected to escalate, firms must seek to balance both the ecological and performance benefit
expectations of the mass of consumers.”

to a decline in the volume of municipal waste in1992, the first time since 1945. Ammonia output
also declined sharply In most developed western nations, well-organize•

• High R&D Budgets

“Technology and innovations require heavy investments in research and development. It is not
uncommon for pharmaceuticals companies, for example, to spend £150-200 million to develop a
new drug. spending is also a feature of many industries including cars, communications,
computers, aerospace, engineering, entertainment and consumer electronics. Some companies
spend billions on R & D each year. A recent study showed that the international top 200
companies devoted an average 4,85 per cent of 1993 sales to R & D, General Motors of the
United States was the world's biggest spender with a budget of more than $4 billion (£2.6
billion), followed by German engineering group Daimler Benz, Ford Motor of the United States
and Japan's Hitachi.14 In recent years, there has been a marked increase in collaborative
technologies Cal research efforts between western governments and industries. In Europe, this
niood spawned subsidized programmes, such as Esprit. Eureka and Jessi, and in the USA
schemes such as Sematic and MCC. These programmes stemmed from two nifu'n concerns; first,
the soaring cost of R & D and the difficulty, even for big companies, of mastering a wide range
of technologies; and second, the increasing international competition, mainly from Japan, in
electronics and related industries. There are mixed views on the success of these programmes,
although collaboration has helped break down barriers between rival firms and stimulated the
dissemination of know-how.”
• Concentration on Minor Improvements
“As a result of the high cost of developing and introducing new technologies, many companies
are tinkering - making minor product improvements - instead of gambling on substantial
innovations. The high costs and risks of commercialization make firms take this cautious
approach to their R & D investment. Most companies arc content to put their money into copying
competitors' products, making minor feature and style improvements, or offering simple
extensions of current brands. Thus much research is in danger of being defensive rather than
offensive.”
• Increased Regulation
“As products become more complex, people need to know that they are safe. Thus, government
agencies investigate and ban potentially unsafe products. In the EU and America, complex
regulations exist for testing new drugs. The US Federal Food and Drug Administration, for
example, is notorious for its strict enforcement of drug testing and safety rules. Statutory and
industry regulatory bodies exist to set safety standards for consumer products and penalize
companies that fail to meet them. Such regulations have resulted in much higher research costs
and in longer times between new-product ideas and their introductions. Marketers should be
aware of these regulations when seeking and developing new products. Marketers need to
understand the changing technological environment and the ways that new technologies can
serve customer and human needs. They need to work closely with R & D people to encourage
more market-oriented research. They must also be alert to the possible negative aspects of any
innovation .”

5. Political Environment
“Marketing decisions are strongly affected by developments in the political environment. The
political environment consists of laws, government agencies and pressure groups that influence
and limit various organizations and individuals in a given society.”
• Legislation Regulating Business
“Even the most liberal advocates of free-market economies agree that the systemworks best with
at least some regulation. Well-conceived regulation can encourage competition and ensure fair
markets for goods and services. Thus governments develop public policy to guide commerce
sets of laws and regulations that limit business for the good of society as a whole.”
“For example in the EU, business operators are subject to European Commission, individual
member state and specific local regulations; in the USA,laws are created at the federal, state and
local levels, and these regulations often overlap.
Second, the regulations are constantly changing what was allowed last year may now be
prohibited. In the single European market, deregulation and ongoing moves towards
harmonization are expected to take time, creating a state of flux, which challenges and confuses
both domestic and international marketers.
The second purpose of government regulation is to protect consumers from unfair business
practices. Some firms, if left alone, would make shoddy products, tell lies in their advertising and
deceive consumers through their packaging and pricing. Unfair business practices have been
defined and are enforced by various agencies.
The third purpose of government regulation is to protect the interests of society against
unrestrained business behaviour. Profitable business activity does not always create a better
quality of life.”
• Growth of Public Interest Groups
“The number and power of public interest groups have increased during the past two decades. In
Chapter 2 we discussed a broad range of societal marketing issues. The pioneering efforts of
Ralph Nader's Public Citizen group in the United States raised the importance of the role of
public interest groups as watchdogs on consumer interests and lifted consumerism into a
powerful social force.”
“Consumerism has spilled over to countries in western Epitope and other developed market
economies such as Australia. Hundreds of other consumer interest groups, private and
governmental, operate at all levels - regional, national, state/county and local levels. Other
groups that marketers next to consider are those seeking to protect the environment and to
advance the rights of various groups such as women, children, ethnic minorities, senior citizens
and the handicapped. As we saw in the case of Nutria’s failed biotechnology project companies
cannot afford to ignore the views of powerful public interest groups.”
• Increased Emphasis on Ethics and Socially Responsible
“Written regulations cannot possibly cover all potential marketing abuses, and existing laws are
often difficult to enforce. However, beyond written laws and regulations, business is also
governed by social codes and rules of professional ethics. Enlightened companies encourage
their managers to look beyond what the regulatory system allows and simply to 'do the right
thing'. These socially response sables firms actively seek out ways to protect the long-run
interests of their consumers and the environment. Increased concerns about the environment
have created fresh interest in the issues of ethics and social responsibility. Almost every aspect of
marketing involves such issues. Unfortunately, because these issues usually involve conflicting
interests, well-meaning people can disagree honestly about the right course of action in a
particular situation.”
• Persistence of Cultural Values
“People in a given society hold many beliefs and values. Their core beliefs and values have a
high degree of persistence. For example, most of us believe in working, getting married, giving
to charity and being honest. These beliefs shape more specific attitudes and behaviours found in
everyday life. Core beliefs and values are passed on from parents to children and are reinforced
by schools, religious groups, business and government.”
For example, family-planning marketers could argue more effectively that people should get
married later than that they should not get married at all.

6. Culture Environment
“The cultural environment is made up of institutions and other forces that affect society's basic
values, perceptions, preferences and behaviours. People grow up in a particular society that
shapes their basic beliefs and values. They absorb a world-view that defines their relationships
with others. The following cultural characteristics can affect marketing decision making.
Marketers must be aware of these cultural influences and how they vary across societies within
the markets served by the firm.”
• Persistence of Cultural Values
“People in a given society hold many beliefs and values. Their core beliefs and values have a
high degree of persistence. For example, most of us believe in working, getting married, giving
to charity and being honest. These beliefs shape more specific attitudes and behaviours found in
everyday life. Core beliefs and values are passed on from parents to children and are reinforced
by schools, religious groups, business and government.Secondary beliefs and values are more
open to change. Believing in marriage is a core belief; believing that people should get married
early in life is a secondary belief. Marketers have some chance of changing secondary values,
but little chance of changing core values. For example, family-planning marketers could argue
more effectively that people should get married later than that they should not get married at all.”
• Shifts in. Secondary Cultural Values
“Although core values are fairly persistent, cultural swings do take place. Consider the impact of
popular music groups, movie personalities and other celebrities on young people's hair styling,
clothing and sexual norms. Marketers want to predict cultural shifts in order to spot new
opportunities or threats. Such information helps marketers cater to trends with appropriate
products and communication appeals.The principal cultural values of a society are expressed in
people's views of themselves and others, as well as in their views of organizations, society,
nature and the universe.”
PEOPLE'S VIEWS OF THEMSELVES.
“People vary in their emphasis on serving themselves versus serving others. Some people seek
personal pleasure, wanting fun, change and escape. Others seek self-realination through
religion,recreation or the avid pursuit of careers or other life goals. People use products,brands
and services as a means of self-expression and buy products and servicesthat match their views
of themselves.In the last dfccade or so, personal ambition and materialism increaseddramatically,
with significant marketing implications. In a 'me-society', people buy their 'dream cars' and take
their 'dream vacations'. They spend more time in outdoor health activities G°ggin& tennis, etc.),
in thought, and on arts and crafts.The leisure industry (camping, skiing, boating, arts and crafts,
and sports) faces.”