Banking Diploma Courses in Bangladesh under The Institute of Bankers, Bangladesh (IBB)
A. Demographic environment. (To Get Download Option Click Read More)
Marketers are much more interested to monitor the demographic environment, because population makeup the market.
1. World population growth : The world population explosion has been a source of major concern, for two reasons. The first is the fact that certain resources needed to support this much human life ( fuel, foods and minerals ) are limited and may run out at some point. Unchecked population growth and consumption would eventually result in insufficient food supply, depletion of key material, over crowding, pollution and an overall deterioration in the quality of life.
Second cause for concern is that population growth is highest in some countries and communities that can least afford it. In the developing countries, the death rate has been falling as a result of modern medicine, but birth rate remained fairly stable. Feeding, clothing and educating of their children while also providing a rising standard of living is nearly impossible in these countries.
2. Population age mix :
National populations vary in their age mix. At one extreme is Mexico, a country with a very young population and rapid population growth. At the other extreme is Japan, a country with one of the world’s oldest populations. In Mexico milk, diaper, school supplies and toys would be the important products. But in Japan most of the population consume many more adult products.
So, the marketers have to create separate products and services for different countries and have to choose different price, distribution and promotional strategies for them.
3. Ethnic market :
Countries also vary in ethnic and racial makeup. At one extreme is Japan, where almost every one is Japanese. But on the other extreme is United States, where virtually people came from all nations. Each group has certain specific wants and buying habits. Several food, clothing and furniture companies have directed their products and promotions to one or more of these groups.
4. Education groups :
The population in any society falls into five groups, illiterate, high school dropouts, high school degree, college degree and professional degrees. The marketers have to observe the size of each groups in a society and according to their size they have to design their production plan for different products and services.
5. Household patterns :
The traditional household consists of a husband, wife and children. But in some other societies we observed that their household patterns are nontraditional including single live - alones, adult live – togethers, single parent families, childless married couple and so on. Single or separated families needed smaller apartment, inexpensive and smaller appliances, furniture and small size food packets. So, the marketers have to consider to the household patterns of the different societies.
6. Geographical shifts in population :
Population movement from one country to another or from rural to urban areas. Location makes a difference in goods and service preferences. Those who lived in large cities their most of the purchase are expensive furniture, perfumes, cloths and so on. Suburbanites buy home workshop equipment, outdoor furniture and outdoor coking equipments etc. So, the marketers have to consider to the geographic shifts in population.
7. Shift from a mass market to micro - markets :
The effect of all these changes is fragmentation of the mass market into numerous micro - markets differentiated by age, sex, ethnic background, education, geography, lifestyle and other characteristics. Each group has strong preferences and marketer has to reached the customer through increasingly targeted communication and distribution channels. Marketers are increasingly design their products and services and selected their marketing programs for specific - micro markets.
B. Economic environment.
Without the purchasing power, consumers are not able to fulfill their needs and wants properly. The available purchasing power in an economy depends on current income, price, savings, debt and credit availability. Marketers pay close attention to major trends in income and consumer spending patterns.
1. Income distribution :
Nations economic condition mostly depend on the level and distribution of income and industrial structure. There are four types of industrial structures are observed in the national economy.
(a) Subsistence economies :
In a subsistence economy, the vast majority of people engage in simple agriculture, consume most of their output and barter the rest outputs for simple other goods and services. These economies offer few opportunities for the marketers.
(b) Raw material exporting economies :
These economies are rich in one or more natural resources but poor in other respects. Much of their revenue comes from exporting these resources. For example, Zaire and Saudi Arabia has copper and oil resources and they export them in the international market. These countries are good markets for extractive equipment, tools and supplies, materials handling equipments and trucks. Depending on the number of foreign residents and wealth or rich rulers and landholders, they are also a good market for western - style commodities and luxury goods.
(c) Industrializing economies :
In an industrializing economy, manufacturing begins initially to account for 10 percent to 20 percent of gross domestic product. Industrializing economies countries are India, Egypt, Philippines, Malaysia and so on. As manufacturing increases, the country depends more on imports of raw materials, steels and heavy machinery and less on imports of finished textiles, paper products and processed foods. Industrialization creates a new rich class and a small but growing middle class, both demanding new types of goods and services.
(d) Industrial economies :
Industrial economies are major exporters of manufactured goods and investment funds. They buy manufactured goods and export them to other types of economies in exchange for raw materials and semifinished goods. The large and variety of manufacturing activities of these nations and their sizable middle class make them rich markets for all sorts of goods.
2. Saving, debts and credit availability :
Consumers expenditures are affected by consumer saving, debt and credit availability. Consumers saving habit increase the amount of deposits, which is helpful for banks to reduce the bank interest rate and increase the loan availability. Access to lower interest rate helps the companies to expand faster. When credit facilities are available then consumers can purchase many goods and services, otherwise these are not possible at present. Marketers must pay careful attention to major changes in income, cost of living, interest rate, savings and borrowing patterns because they can have a high impact on business, specially for companies whose products have high income and price sensitive.
C. Natural environment.
1. Shortage of raw materials :
2. Increased energy cost :
3. Increased pollution levels :
4. Changing role of governments :
D. Technological environment.
One of the most dramatic forces makes rapid changes of human life is technology. The economy’s growth rate is affected by the discoveries of new major innovated technologies. The marketers are monitoring the new innovation and trend of technology.
1. Accelerating pace of technological change :
Many of today’s common products were not available 40 years ago. People of that time were did not know personal computers, digital wristwatches, video recorders, mobile phones and fax machines. The advent of personal computers and fax machines has made it possible for people to telecommunicate the others that is, work at home instead of traveling to offices that may be takes 30 minutes or more. Some people hope that this trend of technology will reduce auto pollution, healthy society, bring the family close together and create more home centered entertainment and activities. It will also have substantial impact on shopping behaviour and marketing performance.
2. Unlimited opportunities for innovation :
Scientists are working on a startling range of new technologies that will revolutionize products and production process. Some of the most exciting work is being done in solid - state electronics, biotechnology, robotics and material sciences. Researchers are working on AIDS cures, happiness pills, painkillers and nonfattening foods. They are designing efficient robots for firefighting, underwater exploration and home nursing. In addition scientists are also working on fantasy products, such as small flying cars, three - dimensional television and space colonies. The challenge in each case is not only technical but also commercial – to develop affordable versions of these products.
3. Varying research and development budgets :
The United States annual research and development expenditures are highest in the world, nearly 60 percent of these funds are still earmarked for defense. Japan has increased its research and development expenditures much faster than the United States and is spending mostly on nondefense related research in physics, biophysics, biochemistries, material science, geography and computer science. Many companies are content to put their money into copying competitors’ products and making minor feature and style improvements. So, new innovation of technology depends upon the nature of research work and on the amount of budgets allocated for research and development works.
4. Increased regulation of technological change :
As products become more complex, the public needs to be assured of their safety and security. Consequently, government agencies’ powers to investigate and ban potentially unsafe products have been expanded. Safety and health regulations have also increased in the area of food, automobiles, clothing, electrical appliances, medical sciences and construction. Marketers must be aware of these regulations when proposing, developing and lunching new products in the markets.
E. Political legal environment.
1. Legislation regulating business :
2. Growth of special - interest groups :
F. Social cultural - environment.
1. High persistence of core cultural values :
2. Existence of subcultures :
3. Shifts of secondary cultural values through time :
