LO2: SEGMENTATION,

TARGETING & POSITIONING

P2.1. MACRO & MICRO ENVIRONMENT FACTORS

WHICH INFLUENCE MARKETING DECISIONS

Macro Environmental Factors

POLITICAL
Environmental protection/legislation
Usage of plastic bags
Conceptualizing Green Marketing

Consumer protection
Consumer protection Act
Industry (Banking)
Anti-money laundering Act
FEMA (Foreign Exchange Management Act)

Governments attitude
Duty free goods
Regional fiasco b/w Malaysia & China on rubber imports.
India & Pakistan Ban on trade of arms

POLITICAL
Competition regulation
Industry (Telecom)
Vodafone, MTN, Uninor, when entered in India was asked to perform their business in
purview of the FDI policy on Telecom Retail.

Advertising standards

Ad campaign in different countries

India

Saudi Arabia

US

Economic
Economic growth
Tourism Maldives

Taxation international trade

Exchange Rate $$$$
Employment law
Health and Safety law
Inflation
Consumer confidence
Minimum wage

Social

Income distribution
Demographics
Labour & Social mobility
Lifestyle changes
Attitudes to work and leisure
Education
Fashion and Fads
Health & Welfare
Living conditions

Technological

Changes in physical sciences

Internet
Energy use and costs
Rates of technological obsolescence
New discoveries
Govt and Industry focus on tech
Govt spending on research

Legal

Employment law
Health and Safety
Taxation both corporate and consumer
Other regulations
International trade barriers
Strength of the rule of law

Environmental
How peoples perception and reaction to
environmental issues can affect a
business.

Micro Environmental Factors

SUPPLIERS
Stakeholders

Possible Questions

Decisions in Marketing

Suppliers

Who are the major

suppliers of Tuna fish in
the market?
Do they deliver really
good quality?
Do they deliver in time?

Competitors Order size

&other areas.

Can they sustain any

order given in a small
time frame?
What price they charge?

Quality parameters &

control
Timely procurement
means timely customer
satisfaction.
Inventory control

Cost (subject to
marketing budget)

INTERMEDIARIES
Intermediaries

Do they have
knowledge in the
product / service?
How much commission
do I have to pay them?

Good sales pitch

What locations they are

based in?
Is the location suitable to
me?
Are there any
conveyance facilities?

Market reach

Costs & budget

parameters

Cost benefit analysis

Greater access to small
town & cities in lesser
time.

OWNERS
Owners

How much profit is

earned?

Target allocation to
different branches & team.

Which branch / outlet is

having a daily turnover of
$10,000?

More facilities to those

outlets; more budget
allocations; more attractive
incentive schemes to boost
sales. Most importantly,
identifying KBUs.
Close them down, sell the
business and put the money
in the profitable businesses.
Provide training to staff to
improve sales.

Which branches are not

performing well?

Financers
Financers

Daily inflow / outflow of More credit limit

cash in Current A/c

Are Inflows > outflows?

Are the EMIs paid in

time?

Profitability of the Co.

More credit limit, more

working capital, and
visibility of a good
collection system.
Improves the credit rating
of the business.
Suppliers will show more
confidence in the
business, by extending
the credit.
Increasing the Brand
Image.

Local Residents
Local residents

How many local

residents are
employees in the
organization?
Arranging road-safety
week, blood donation
camps, tournaments,
sponsorships, etc.

More reach of local

people & creation of
trust and brand image.
Brand loyalty of the
product.

Pressure Groups
Pressure groups (Activists Writing a letter to MP.
/ Charitable Organizations, Contacting the press.
etc.)
Organizing marches.
Running Campaigns.

Cases:
Tata-Nano project at West
Bengal.
Pesticides in Coke- Pepsi
drink.
Maruti-Suzuki employees
strike at Maneswar plant
Petas voice against KFC
& McDonalds.

COMMON BASES OF
SEGMENTATION
GEOGRAPHIC SEGMENTATION
DEMOGRAPHIC SEGMENTATION
PSYCHOGRAPHIC SEGMENTATION

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COUNTRY SEGMENTATION ON
THE BASIS OF INCOME
As per the report of World Bank per capita Gross
National income are given below:
Low income countries
:US$ 735 or less
Lower middle income countries : US$ 736 2935
Upper middle income countries : US$ 2935 9075
High income countries
: US$ 9075 or more

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SEGMENTATION OF THE INDIAN

MARKET ON THE BASIS OF
HOUSEHOLD INCOME

Rich (Benefit Maximizers)

Households with income > Rs. 2.15 lakhs that

typically own their cars and PCs.

Consuming (cost benefit optimizers)

Households with annual income of Rs. 45k
Rs.2.15L have a bulk of branded consumer
goods.

Climbers (cash-constrained benefit seekers)

Households with annual income of Rs.22KRs.45k are cash constrained benefit maximizers
reported to have at least one major consumer
durable such as a mixer sewing machine,
television, etc.
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SEGMENTATION OF THE INDIAN

MARKET ON THE BASIS OF
HOUSEHOLD INCOME
Aspirants (new entrants into consumption)
Households with income Rs. 16k-Rs.22k are
generally new entrants. They are occasional
consumers that own bicycles, radios or fans.

Destitute (hand to mouth exercise)

Households with income less than Rs.16k are
very poor people and are called nonconsumers.

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SEGMENTATION ON THE BASIS OF AGE

Generation-I (Age 45 to 59)
Generation of the socialistic society
The talented got university education and have
become high-ranking govt. officials, but many work for
the state-owned enterprises. Some are already retired.

Generation-II (Age 30 to 44)

Lost opportunity to get proper education
Mainly working for state-owned where income does
not reflect job performance
Those married are willing to spend as much as
possible for Little Emperor, their only child, at the
expense of their pleasures. In many cases, what
generation-II purchases is based on what the child
wants or needs.
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SEGMENTATION ON THE BASIS OF AGE

Generation-III (Age 18 to 29)
Good
educational
background,
with
opportunity to work for foreign affiliated firms.
They are blessed with a good aspect of the
market economy system that promises a
brighter future for people who earn enough
money.

NOTE:
For international marketers, Generation-III is the
most attractive market segment.
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Features of Generation-III
Segment

This segment is also known as also known as sgeneration (single child generation), which has the
following characteristics:
Luxury principle: They spend a disproportionate amount of
money on one thing at the expense of others. They have a
strong drive towards a high personal consumption level.
Consumption of western feeling: Material goods are a
medium for them to experience western culture.
Aspiration of big names: They tend to be very fond of
famous brand name products.
Newer the better syndrome: They like to go after newest
products.
One cut above the rest mentality: They like to impress
others.
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PSYCHOGRAPHIC
SEGMENTATION
Homebodies
Two-faced
Wannabes
Rebels
Cool guys
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SEGMENTATION OF
INTERNATIONAL MARKETS ON THE
BASIS OF CORE VALUES

Strivers (12%): Place higher emphasis on material

& professional goals and slightly more likely to
include men than women. 1/3 of Asians are strivers.
Devout (22%): Place more value on traditions and
duty and include more women than men. In
developing Asia, Middle East and Africa devout are
more common, but rarely found in Western Europe
& developed Asia.
Altruists (18%):They are more interested in social
issues and social welfare and consists of slightly
more women than men of older age with a median
age of 44. Latin America and Russia have more
altruist than any other country.
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SEGMENTATION OF
INTERNATIONAL MARKETS ON THE
BASIS OF CORE VALUES

Intimates (15%): Place more value on close

personal relationships and family above all,
and include men and women almost equally.
of American and Europeans are intimates
compared to only 7% in developing Asia.
Fun seekers (12%): The youngest group with
a male-female ratio of 54:56 found in
misappropriate no in developing Asia.
Creative's (10%): This market segment has
strong interest in education, knowledge and
technology. Creative's are more common in
Latin America & Western Europe.
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OPPORTUNITIES BASED
SEGMENTATION OF
INTERNATIONAL
MARKETS
Market Segment
Existing

Latent

Incepient

Low

Product Type

Competitive
Cost &
risk of
product
launch

Improved

Break through
High
Low

Cost & risk of product launch

High

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SEGMENTATION ON THE BASIS OF

INTERNATIONAL MARKETING
OPPORTUNITY
Existing Markets
These are the markets which are already
serviced by existing suppliers and where
customer needs are known.
Marketing opportunities can be assessed by
estimating the consumption rates & import
patterns in these countries.
Since competing suppliers are already in the
market entry is difficult unless a superior product
is offered.

Latent Markets
These markets have recognized potential
customers
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SEGMENTATION ON THE BASIS OF

INTERNATIONAL MARKETING
OPPORTUNITY
Incipient Markets
There is no demand at the present market,
but the conditions and trends that indicate
future emergence of needs can be identified.
The incipient markets have the potential to
become existing markets once the need is
identified, created, and customers are
persuaded to use the product resulting in
market creation.
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TYPES OF PRODUCT
OPPORTUNITIES IN THESE
MARKET SEGMENTS

Marketing opportunities may be classified in

three distinct product types as follows:
Competitive product: Competitive product is one
which has no significant advantage over those
already on offer. It is a me too market offering.
Improved product: Although an improved product
is not unique, it provides some improvement over
the presently available market offering.
Breakthrough product: It represents significant
differentiation with innovation & therefore has
considerable competitive advantage.
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