Download to read offline
Business Environment - Micro and Macro Environment.pptx
- 1.
- 2. 2 Business • Business isan economic activity with the object of earning an income, profit and there by accumulate wealth.
- 3. 3 Definition • A businessenvironment is a combination of internal and external environmental forces and factors that influences the business operation of a business and its ability to serve its customers.
- 4. 4 Business Environment -Types • Internal business environment – material, machines, workers, money, etc. • External business environment – two categories, 1. Macro environment 2. Micro environment.
- 5. 5 Micro Environment • Microenvironment– the forces close to the company that affect its ability to serve its customers. • The company, suppliers, marketing intermediaries, customer markets, competitors and publics.
- 6. 6 Suppliers • Suppliers arean important link in the company’s overall customer value delivery system. • They provide the resources needed by the company to produce its goods and services. • Supplier problems can seriously affect marketing.
- 7. 7 Marketing Intermediaries • Marketingintermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers; they include resellers, physical distribution firms, marketing service agencies, and financial intermediaries.
- 8. 8 Customers • Consumer markets- individuals and households that buy goods and services for personal consumption. • Business markets - buy goods and services for further processing or for use in their production process.
- 9. 9 Customers • Reseller markets- buy goods and services to resell at a profit. • Government markets - government agencies that buy goods and services to produce public services. • International markets - buyers in other countries, including consumers, producers, resellers, and governments.
- 10. 10 Competitors • The marketingconcept states that to be successful, a company must provide greater customer value and satisfaction than its competitors do. • Marketers must do more than simply adapt to the needs of target consumers.
- 11. 11 Public • A company’senvironment is surrounded by several types of public. • There are several types of public, such as financial public, media public, local public, general public and internal public.
- 12. 12 Public • Financial public– banks, financial institutions and stock holders. They influence the company’s ability to obtain funds. • Media public – newspapers, magazines, radio and T.V. They carry news, features and editorial opinion. • Local public – neighborhood residents and community organizations. • Internal public – workers, managers, volunteers and the board of directors.
- 13. 13 Macro environment • Macroenvironment – the larger societal forces that affect the microenvironment • Demographic, economic, natural, technological, political, legal, and cultural forces. Macro Environment
- 14. 14 Economic Environment a. GeneralEconomic conditions: • Agricultural and industrial output trends • Per capita income and income distribution pattern • Pattern of savings and expenditure • Price levels • Employment trends • Impact of government policies and • Economic systems
- 15. 15 Economic Environment a. Industrialconditions: • Market growth of the industries • Demand patterns of the industry • Stages of product life cycle
- 16. 16 Economic Environment c. Stateof supply of Resources for Production: • Production determines inputs, which are available for production. • Land • Labour • Capital • Machinery and equipment and • Managers
- 17. 17 Demographic Environment • Thepattern and changes in the society based on age, educational background, marital status, family size, family life style, religion, nationality etc. • It is useful for marketing decisions, marketing segmentation and formulation of marketing strategies.
- 18. 18 Socio-Cultural Environment • Itdetermines the value systems of the society. • Social factors are caste, customs, conventions, cultural heritage and respect for seniority, etc. • Social environment has the following dimensions: 1. Changes in people’s life styles 2. Concern for social problems and 3. Growth of consumerism
- 19. 19 Technological Environment • Higherexpenditure on R and D • Concentration of product improvement and development • Accelerating pace of technological change • Greater emphasis upon the regulation of technological change
- 20. 20 Political Environment • Marketerhas to operate his business in a given the political environment and his operations are affected by the government programmes at different levels. • Changes in political climate leads to changes in Govt. policies.
- 21. 21 Political Environment Political Changes: •Stable government leading to very few policy changes • Frequent changes in government leading to frequent changes in policies • Cyclical changes Political factors to be considered by the marketers • Role of private sector in the economy • Government procedure and changes in government policies • Type and stability of government • Role of small scale sector in the economy • Role of service sector in the economy
- 22. 22 Legal Environment • Marketingdecisions are strongly affected by laws pertaining to competition, price setting, distribution arrangements, advertising, etc.
- 23. 23 Legal Environment Laws AffectingBusiness are: • Essential commodities act – 1955 • The Companies Act - 1956 • Environment protection act - 1986 • Consumer protection act – 1986 • Securities and Exchange Board of India Act –1992. • Taxation laws
- 24.