Unit 2

Marketing Process and

Environment

 Marketing Process:
It has two major dimension Targeting
customers and developing marketing mix.
Targeting Customers: Marketing process starts
by identifying the target customers. The
process begins by identifying the total
markets, dividing the total market in to market
segments, selecting the most profitable
segments, focusing and serving these segments
with the well designed marketing mix.

The marketing process is associated will these activities and

responsibilities of the marketer. It means the continuous flow
of goods from production point the consumption point.
According to Philip Kotler:
1. Analyzing marketing opportunities:
Change in technology, increasing consumers purchasing
power, social and cultural dynamism.
2. Developing marketing strategies
The marketing managers need to develop the segmentation,
targeting and positioning strategies. Developing strategies for
competitive advantages.
3. Planning marketing programs
4. Managing the marketing efforts.

 Concentration: ( On the basis of customer

needs and wants only the right product can be
created)
Analysis of marketing environment
Analysis of marketing opportunities
Identification of target market
Identification of customer needs and wants
Production of desired goods and services.

 Equalization:

(After

the suitable
products are produced but before that are
distributed to the target market, the marketer
has to correctly examine whether the product
does match to the customer needs and wants.)
Matching product with needs and wants
Matching supply with demand
Develop a marketing program
Perform marketing activities

 Dispersion: ( After the desired goods and services

are produced and information regarding the demand
position is analyzed, the goods become ready for physical
distribution)
Movement of goods and services from product centers to
consumption centers
Involvement of marketing intermediaries
Perform marketing activities
Transfer of ownership from seller to buyer
Need satisfaction

Feed Back:
Follow-up
Evaluation of markets
Marketing control

Marketing Mix
Product
Quality

Price
Level

Promotion
Advertising

Place
Distribution channels

Features and
benefits

Discounts

Personal
selling

Distribution
coverage

Style

Allowances

Sales
promotion

Outlet locations

Brand name

Payment terms

Publicity

Sales territories

Packaging

Returns

Investor
relations

Inventory locations

Tradeshows

Transportation
centers

Warranty
Service level
Supporting
services

Developing the Marketing

Mix
Marketing mix is the set of marketing tools to achieve the
organizational goals.
1. Product Mix: It includes decision relating to what to offer to
the target customers.
.Product planning and development
.Product line and product mix
.Product quality
.Variety
.Design ( size, looks, color, weight etc )
.Features ( Nokia offering different combination of features
.Branding ( name, logo, color, slogan )
.Packaging and labeling
.Warranty , after sales service

2. Place or distribution mix: Place

decision mainly involve how to
manage the flow of products from
the factory to the market.
Channel selection / channel
motivation
Channel conflict management
Physical distribution ( It involves
efficient
management
of
transportation,
warehousing,
inventory management, material
handling, order processing and

3. Price mix: The price mix decisions includes

analysis of competitors prices, formulation of
pricing objectives, setting the base price and
determining terms and conditions of sales etc.
Competitors price analysis
Pricing objectives
Price setting
Conditions of sales
Discounts, allowances and commission

4. Promotion mix: Here identify and explain the

key activities conducted under the promotion mix of
marketing.
Advertising ( Television, audio, video paper etc )
Personal selling ( sales through sales persons )
Sales promotion ( sample, premium, contests,
demonstration, coupons, special displays, price reduction
on temporary basis )
Public relation ( press, government, customers and
society )
Direct marketing ( door to door selling, mail-order
marketing, telephone marketing, television marketing, on
line marketing, etc )

 Marketing Environment:
Environment consists of surroundings or forces influencing
growth or development. Marketing environment is the totality
of forces that effect on the marketing decision and the
attainment of the marketing goal. The marketing environment
is more important to management today than ever before. This
is both because the rate of environmental change has increase
and because there are more type of important environmental
changes. It is the source of not only challenges to the
management it is also the strong source of opportunities. A
marketer identifies business opportunities from among the
marketing environmental force. Marketing plans policies and
strategies are affected by the set of environmental forces
including both internal and external, the combination of these
forces is known as marketing environment.

Internal Environment: It located within the organization

Production facilities: If the company is a producer, it must have adequate
production facilities on the basis of changing demand and need of customers.
Financial capability: A marketing company requires adequate finance to run
it smoothly.
Human resources: It consists of technical and non-technical manpower. For
smooth functioning of the company skilled manpower is required.
Company location: Success of a company, to a large extent, depends upon
the selection of a right or proper location.
R. And D capability: Products once developed and introduced may not fulfill
the needs and wants of the target market.
Company image: Company image is the position of the
company in the market or the nature of market response.
Consumer's many easily accept the products of those
companies, which have good image in the market.
Objectives/ resources/ structure /

External Environment:
Micro:
The Firm's Market: It may be defined in as a place where
buyers and sellers meet, goods or services are offered for sale and
ownership of goods or services is transferred. ( Consumer's
market, Industrial market, Govt. or organizational market )
Producer Suppliers: It consist of individuals or organizations
regularly supplying the products to the marketing organization for
reproduction or resale purpose. Success of marketing
organization depends upon the regular supply of goods and
services by the suppliers.
Marketing intermediaries: They are independent business
organizations that help the flow of goods and services form the
producing point to the consumption point. They are resellers such
as agents, distributors, wholesalers, retailers or middleman.

 Macro:
Economic environment: According to
economic law the marketing of a particular
product largely depends upon two factorsability to the consumers to spend and their
willingness to spend. Once without other
cannot fulfill the marketing objective. It
consists Level of income, Monetary and fiscal
policy. Level of employment, Rate of inflation.
Economic conditions: Prosperity, Recession,
Depression, Recovery.

 Prosperity: During this period unemployment is low and

aggregate income is high. Consumers are generally willing
to spend and marketers take advantages.
Recession: During this unemployment and peoples income
fall. Many companys cut down their workforce and many
business close down their operation. Many countries of the
world including USA, Western Europe, and Gulf countries
went into recession between 2008 to 2011.
Depression: This is the worst time in a countrys economy
when the whole economy collapses. In this situation high
level of unemployment and a rapid fall in people's income.
Recovery: When the economy begins to improve it is
known as the recovery period. During this unemployment
declines and consumers show higher willingness to spend .

 Demographic
environments:
Demographic represents the statistical study of
human population and its distribution
characteristics. It is an utmost important task for
the marketing executives to study about the
changing pattern of demography of the country.
It consists Total population and its growth and
structure of population distribution ( like sex
wise distribution, Age wise distribution, Marital
status, Fertility and mortality rate Population
density, Distribution by education and Religious
structures etc )

 Socio-Cultural environment: Culture is the

means used in adjusting to the biological
environment, psychological, and historical
components of human existence. A society is a
group of people having distinct beliefs,
knowledge, costumes, habits, taste, values culture
and lifestyle. These socio- cultural characteristics
differ from people to people and society to society.
Therefore their choice of goods and services also
differ from one another. It consists Demographics
of society, Cultural value of society, Consumerism
(against and for of goods and services etc.)

 Technological environment: It is the knowledge and

procedures used in the conversion of resources to a
finished product. It is the practical application of
science, new or old to meet a need or solve a problem.
Political-Legal environment: It is a broad term
covering the firms and institution by which the nation
is governed. It consists of an interaction set of laws,
government agencies and pressure groups that
influence and constrain the conduct of various
organizations and individuals in the society, while
formulation a marketing plan and program a marketer
must be able to analyze all these political and legal
factors.

 Natural environment: Resources are not distributed by

nature in all the countries in the same ratio. Whatever
resources are available, they cannot be used forever, because
they will be fully deployed after certain period. Therefore the
marketer needs to be aware of the consequences of non
availability of natural resources and the alternative solution to
the problems should be determined. ( It consists increased
levels of environment pollution, Government intervention in
Natural resources management, )
Competitive environment: Success in the market place is
dependent not only upon identifying and responding to
customer's need but also upon the companies ability to ensure
that its response is judged by customers to be superior that of
the competitors.

Factors affecting Marketing Environment

Economic dimensions of environment

Social dimensions or environment
Political environment
Legal regulatory environment
Technical environment

 Marketing Environment in Nepal:

Nepal is a small landlocked Himalayan country situated at the
heart of Asia. Nepal has a multiparty system. The nearest sea port
for entry and exit of Nepalese cargoes is Calcutta port. Nepal has
been using Chittagong port of Bangladesh for launching
international trade with rest of the world.
The major
environmental forces that have greater impact on Nepalese market
and trade pattern may be economic environment, demographic,
political - legal and technological etc.

Nepal is an agrarian country. Contribution of agriculture

sector to the country's real GDP and employment is high. Farming
is still highly labor intensive. Recently marketing opportunities for
services sectors like computer software, insurance, banking
education, hospitals and nursing homes haven been fostering
rapidly with bright future, Economically, Nepal hopes from WTO
regimes.

 The demographic character of Nepal shows that the market

structure of the country diverse in nature. Previously, Nepal
was recognized as the country peace but now it has been
converted into the politically disturbed country. Political
disturbance in the country, Especially the Maoist problem, and
other parties of Terai and hilly has affected the permanency of
government which has adverse effect on the country's business
and economic performance. Effective rules and regulations
regarding marketing activities are lacking in Nepal.

Labor is comparatively cheap in Nepal. Industrial

development has not taken proper direction in Nepal so the use
of appropriate technology is not sufficient. Almost all the
technologies are imitating. Recently information technology
has been gaining momentum in the country in commercial
sector.

However, for the last several years

environmental
degradation
has
been
alarmingly increased in the country due to the
unplanned deforestation at faster pace,
exploitation of natural resources for business
purposes and over population especially in city
areas. The size of Nepalese market is small so
the domestic industries no enjoy cost and
value effectiveness. As a result their
competitive power is weak compared to
foreign competitors.

Highlights of Nepalese Marketing

Environment:
Nepal is a small landlocked Himalayan country situated
at the heart of Asia
Nearest sea port is Calcutta
Nepal is a multy party system
Using Chittagong port of Bangladesh for international
trade
Nepal is an Agrarian country
Farming is still highly labor intensive
Recently Marketing opportunities are growing in
computer software, insurance, banking, education,
hospitals and nursing homes.

 Nepal hopes from WTO

Demographic character of the country is diverse
in nature
Our country is politically disturbed
Effective marketing rules and regulations are
lacking in Nepal
Industrial development has not taken proper
direction
Rural farming is still in traditional based
Informational technology has been gaining
momentum

Affecting causes of Nepalese marketing environment

are as follows:
Westernization
Urbanization
Liberalization
Globalization
Foreign Employment
Political instability
Corruption
Information communication Technology
Pollution
Warming

Important questions
1. What are the key components of
marketing process? Explain.
2. Explain the term marketing mix and
describe its four components.
3. Define marketing environment. Explain
the major components of micro
environment of Marketing?
4. Why the natural environment is
important in Nepalese marketing world?