MARKETING MANAGEMENT(Subject Code: MBADS1-126) → LESSON 5:Market environment Various environmental factors affect the way a business is operated. These environmental factors can be divided into two broad categories, such as the internal environment and the external environment. A business is required to adapt to these marketing environments to stay profitable and ahead in the competition. In this article, you will learn about different types of marketing environments and various components of the marketing environment Definition The marketing environment can be defined as a combination of both internal environmental factors and external environmental factors. These marketing environments surround a business and influence the operations of the business. What is the marketing environment? A marketing environment 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. It is essential to know both internal as well as external environmental factors. Therefore, enterprises keep checking on them to do their business without any legal trouble and to generate maximum profit. The internal marketing environment consists of factors like material, machines, workers, money, etc. All of these components are necessary to run a business successfully. For example, if the raw material is not available on time and in sufficient quantity, then the work of production will become slow, and the company will not be able to fulfill the demand of the product in the market. On the other hand, the external marketing environment can be divided into two categories, such as macro external marketing environment and micro external marketing environment. The microenvironment is closely related to the business and constitutes all external business activities such as distribution and promotion of products of the company. The macro-environmental components affect all the companies serving in a single industry similarly. For example, changes in the laws and rules related to production or doing business will apply to all companies likely. In the next section, you will learn about all the internal as well as external components of an organization. Components of the marketing environment There are broadly two components of the marketing environment, such as the internal environment and external environment. Different types of parts of the marketing environment are categorized under these two broad categories. The internal environment of a business can be controlled, but there is very little control of a business in the external marketing environment. Let us learn about both components one by one. 1. Internal environment The internal environment is formed of all the internal factors and forces of an organization. The internal environment of an organization is within the control of the marketer, and he can change or modify the environment as per the demand in the market and requirement of the business. The following are the five factors that form the internal environment of an organization. These factors are also referred to as five Ms of a business. 1. Money 2. Men 3. Markets 4. Materials 5. Machinery All the components of the internal environment are as important as that of the components of an external environment. However, the internal environment factors are changed according to the change in the external marketing components. For example, an organization is required to upgrade its technology if new technology in the market is introduced. The internal environment of an organization also includes the marketing department, the sales department, the human resource department, and the manufacturing department. 2. External Marketing environment The external marketing environment consists of all the external marketing factors that exist outside the organization, and the marketer has little or no control over the external marketing environment factors. The external marketing environment can be divided into two categories, such as microenvironment and the macro environment. Let us learn about both macro and micro environments one by one. A. Microenvironment The microenvironment of a business consists of all the factors and forces that are directly associated with the company. The micro components of the external environment are also known as task environments. The following are the various components of the micro external environment. 1. Suppliers Suppliers are an essential part of every organization. Suppliers supplies material and all other types of resources required for the production of products. A company can run its business successfully only if its suppliers supply material of good quality and on time. 2. Market intermediaries Market intermediaries are the intermediary parties that help a business to distribute its products in the market. The market intermediaries can be wholesalers, retailers, and distributors. All of these market intermediaries are an essential part of the business as they are the face of the company in the market and represent the products of the company in the market. 3. Partners Business partners are the business entities that conduct business with the organization. For example, advertising agencies, banking and insurance companies, market research organization s, brokers, and transportation companies, etc. A company is required to partner with several other companies to run a successful business. 4. Customers Customers are the most crucial component of the business. Customers are the target audience of the product, and the preference of customers influences all the marketing and business efforts of a company. 5. Public The public is people other than the target audience of the organization. The public plays a vital role in the success of the business as it can build or destroy the image of a company in the market. The public has the power to influence the purchasing decision of the target audience. Especially in the times of the internet, the ability to control the public has increased as they can share their views about your products and services on the internet freely. 6. Competitors The last but not least component of the microenvironment is the competitors of a business. The competitors are the other businesses that sell similar products as your products or are part of the same strategic group in the industry. B. Macro Environment Macro components of a marketing environment consist of all external forces and factors that impact the whole industry rather than just changing an organization directly. Therefore, the macro marketing environment is also referred to as a large environment. The following are the six components of the macro environment. Let us learn about them one by one. 1. Technological environment Technology is one of the elements that have great potential to influence the business of an organization. It is dynamic, as it changes rapidly. Technology provides several threats and opportunities to the business environment. The technological environment consists of research and development in technology, innovation, inducement of technology, and technical alternatives, etc. 2. Demographic environment The demographic environment component of the macro marketing environment consists of people that form a market. The population of the demographic environment can be characterized based on various factors such as age, gender, density, size, location, race, and occupation, etc. The demographic environment is a crucial component for business as the company design and builds its products based on the characteristics of the demographic environment. 3. Social-cultural environment The social-cultural component of a macro environment is formed using values, lifestyle, culture, beliefs, and prejudices of the target audience of a business. The social-cultural environment varies from one region to another region. People living in one area might prefer a different type of product than the preference of the product of the people of any other region. Businesses are required to have in-depth knowledge of the social-cultural environment to design a product or service that is preferred by most people. 4. Economic environment The economic environment component is a type of component that influences all industries. The economic environment affects the purchasing power and spending patterns of the buyers. The following are the different factors that form an economic environment. 1. Interest Rates. 2. Gross Domestic Products (GDP). 3. Gross National Product (GNP). 4. Inflation. 5. Subsidies. 6. Income distribution. 7. Government funding. 8. Other significant economic variables. 5. Political-legal environment: The political-legal environment consists of laws and policies of a country. In addition to rules and procedures, the political-legal environment also includes agencies and pressure groups. All of these political entities impact the working capacity of the industry in society. 6. Physical environment: The last component of the macro environment is the physical environment in which an organization exists. The following are the components of the physical environment. 1. Climate condition 2. Environmental change. 3. Availability of the raw material. 4. Natural resources like water. 5. pollution. Examples of the marketing environment Examples of the internal marketing environment The best example of an internal marketing environment is the office culture of the organization. Your office culture consists of the values, beliefs, and attitudes of your employees. All of these factors determine how the employees of your organization will behave. For example, in an organization where employees are encouraged to perform in a team and support the members of the group are more likely to perform better than the organization where employees compete with one another. Moreover, employees are likely to perform better in a positive internal marketing environment rather than an environment where employees are nagged continuously and pressured to perform well. Google is one of the best companies that provide a positive and very healthy internal environment to its employees. Because of this, Google is now one of the leading companies in the industry. Examples of the external marketing environment The external marketing environment of an organization is formed of micro and macro environment. The microenvironment consists of suppliers, market intermediaries, partners, customers, public, and competitors, etc. for example, suppliers of an organization alter the business environment of an organization to a certain extent. If suppliers supply good quality material and supply that material on time, then the organization can produce the right quality products and can fulfill the demand in the market efficiently. Another vital component of the micro marketing environment is the market intermediaries. The market intermediaries of your business play an essential role in the success of your business. They are the face of your company. They interact with your customers daily and understand your customers and also your product. Let us take the example of a retailer. A retailer sells products from different companies in the market. It is in the hands of a retailer to decide whether to promote your product or not. The sales of your products will significantly depend on the people who represent you in the market. Therefore, it is necessary to provide proper incentives to your representatives and provide a good margin to them on your products so that they promote your products to their customers rather than promoting the products of your competitors. On the other hand, a macro marketing environment does not affect an organization directly but affects the whole industry. An organization is required to perform its business operations according to the macro-environment factors. The examples of the macro-environment are demographic environment, social-cultural environment, economic environment, political-legal environment, physical environment, and technological environment, etc. The business operations of an organization are controlled by the laws and policies decided by the government. In addition to this, the technological environment influences the business environment more than any other macro-environment factor. A business is required to upgrade the technology that it uses for business operations from time to time in order to stay ahead in the competition. The technological environment has both advantages and disadvantages for an organization as an organization is always required to think of innovation to compete with its competitors. On the other hand, it is also costly for an organization to update its technology regularly. Importance of marketing environment The marketing environment holds great importance when it comes to conducting business successfully. Businesses of all sizes, whether small or large or required to do their business within the marketing environment. The existence of the company, its profits, and its losses largely depends on the internal as well as the external environment around it. Therefore, it becomes essential for a marketer to understand and study the marketing environment thoroughly to generate profits and stay in business for a more extended period. Let us understand why the understanding and knowledge of the marketing environment is necessary to run a successful business. 1. To learn about your competitors: A business needs to learn about its competitors to stay ahead in the competition. Different companies fight for a single opportunity in a niche market using different strategies. A deeper understanding of the marketing environment helps a marketer to learn about the business strategies and plans of their competitors. Having this knowledge helps the marketers to understand the policy of their competitors and plan their business strategies accordingly. 2. To learn about your customers: Customers are an essential part of a business. All the business activities of a company are focused on serving its customers better. Therefore, a company gives great importance to learn about their customers and their changing preferences to serve them better and to have a long relationship with them. The marketing environment helps the marketer to understand the customers and their preferences. For example, when there is a slowdown in the economy and inflation is on the surge. At such times, people either prefer to spend less or cease their spending to save money. Therefore, people look for goods and services at lower prices. Consequently, a company must either introduce new products with lower prices or sell their products at discounted prices so that they can still make sales when there is an economic slowdown. 3. Necessary for future planning A business is required to plan to meet the demand of the market and produce as per the latest trends in the market. It is essential to learn about the internal and external environment to plan efficiently. 4. To make most out of the latest trends Trends change rapidly, and the change is rapid in fashion and other similar industries. Companies that are part of such industries are required to keep a check on the changing trends. To do this, they learn about every aspect of the marketing environment so that they can prepare a foolproof plan for the future. 5. To learn about all the threats and opportunities related to business Understanding the marketing environment is necessary to learn about the risks and opportunities associated with the company. The marketer can take advantage of being a first-mover if they know the opportunities related to the business. Moreover, a business must learn about the threat associated with the company to take precautions to stay safe.

LESSON 4:TOPIC: LIBERALIZATION AND GLOBALIZATION Meaning of Liberalization Liberalization is the process or means of the elimination of control of the state over economic activities. It provides a greater autonomy to the business enterprises in decision-making and eliminates government interference. Liberalization was begun to put an end to these limitations, and open multiple areas of the economy. Though some liberalization proposals were prefaced in the 1980s in areas of export-import policy, technology up-gradation, fiscal policy, and foreign investment, industrial licensing, and economic reform policies launched in 1991 were more general. There are a few significant areas, namely, the financial sector, industrial sector, foreign exchange markets, tax reforms, and investment and trade sectors that gained recognition in and after 1991. Liberalization in India Since the adoption of the New Economic Strategy in 1991, there has been a drastic change in the Indian economy. With the arrival of liberalization, the government has regulated the private sector organizations to conduct business transactions with fewer restrictions. For the developing countries, liberalization has opened economic borders to foreign companies and investments. Earlier, the investors had to encounter difficulties to enter countries with many barriers. These barriers included tax laws, foreign investment restrictions, accounting regulations, and legal issues. Economic liberalization reduced all these obstacles and waived a few restrictions over the control of the economy to the private sector. Objectives • To boost competition between domestic businesses • To promote foreign trade and regulate imports and exports • To improve the technology and foreign capital • To develop a global market of a country • To reduce the debt burden of a country • To unlock the economic potential of the country by encouraging the private sector and multinational corporations to invest and expand • To encourage the private sector to take an active part in the development process • To reduce the role of the public sector in future industrial development • To introduce more competition into the economy with the aim of increasing efficiency Reforms under Liberalization • Deregulation of the Industrial Sector • Financial Sector Reforms • Tax Reforms • Foreign Exchange Reforms • Trade and Investment Policy Reforms • External Sector Reforms • Foreign Exchange Reforms • Foreign Trade Policy Reforms Impact of Liberalization Positive Impact of Liberalization in India Free flow of capital: Liberalization has enhanced the flow of capital by making it affordable for the businesses to reach the capital from investors and take a profitable project. Diversity for investors: The investors will be benefitted by investing a portion of their business into a diversifying asset class. Impact on agriculture: In this area, the cropping designs have experienced a huge change, but the impact of liberalization cannot be accurately measured. Government’s restrictions and interventions can be seen from the production to the distribution of the crops. Negative Impact of Liberalization in India The weakening of the economy: An enormous restoration of the political power and economic power will lead to weakening the entire Indian economy. Technological impact: Fast development in technology allows many small scale industries and other businesses in India to either adjust to changes or shut their businesses. Mergers and acquisitions: Here, the small businesses merge with the big companies. Therefore, the employees of the small companies may need to enhance their skills and become technologically advanced.[1] This enhancing of skills and the time it might take, may lead to non-productivity and can be a burden to the company’s capital. Economic Reforms during Liberalization Several sectors were affected by the impact of Liberalisation. A few economic reforms were: • Financial Sector Reforms • Tax Reforms / Fiscal Reforms • Foreign Exchange Reforms / External Sector Reforms • Industrial Sector Reforms Effect of Globalization in India The growth of foreign investment in the field of corporate, retail, and the scientific sector is enormous in the country. … In recent years, globalization has increased due to improvements in transportation and information technology. What is Globalization? The term globalization refers to the integration of the economy of the nation with the world economy. It is a multifaceted aspect. It is a result of the collection of multiple strategies that are directed at transforming the world towards a greater interdependence and integration. It includes the creation of networks and pursuits transforming social, economical, and geographical barriers. Globalization tries to build links in such a way that the events in India can be determined by the events happening distances away. To put it in other words, globalisation is the method of interaction and union among people, corporations, and governments universally. Effect of Globalization in India India is one of the countries that succeeded significantly after the initiation and implementation of globalization. The growth of foreign investment in the field of corporate, retail, and the scientific sector is enormous in the country. It also had a tremendous impact on the social, monetary, cultural, and political areas. In recent years, globalisation has increased due to improvements in transportation and information technology. With the improved global synergies, comes the growth of global trade, doctrines, and culture. Globalization in the Indian economy Indian society is changing drastically after urbanisation and globalisation. The economic policies have had a direct influence in forming the basic framework of the economy. Economic policies established and administered by the government also performed an essential role in planning levels of savings, employment, income, and investments in the society. Cross country culture is one of the critical impacts of globalisation on Indian society. It has significantly changed several aspects of the country, including cultural, social, political, and economical. However, economic unification is the main factor that contributes maximum to a country’s economy into an international economy. Advantages of Globalization in India Increase in employment: With the opportunity of special economic zones (SEZ), there is an increase in the number of new jobs available. Including the export processing zones (EPZ) centre in India is very useful in employing thousands of people. Another additional factor in India is cheap labor. This feature motivates the big companies in the west to outsource employees from other regions and cause more employment. Increase in compensation: After globalization, the level of compensation has increased as compared to the domestic companies due to the skill and knowledge a foreign company offers. This opportunity also emerged as an alteration of the management structure. High standard of living: With the outbreak of globalization, the Indian economy and the standard of living of an individual has increased. This change is notified with the purchasing behavior of a person, especially with those who are associated with foreign companies. Hence, many cities are undergoing a better standard of living along with business development. Impact of globalization Outsourcing: This is one of the principal results of the globalization method. In outsourcing, a company recruits regular service from the outside sources, often from other nations, that was earlier implemented internally or from within the nation (like computer service, legal advice, security, each presented by individual departments of the corporation, and advertisement). As a kind of economic venture, outsourcing has increased, in recent times, because of the increase in quick methods of communication, especially the growth of information technology (IT). Many of the services such as voice-based business processes (commonly known as BPS, BPO, or call centres), accountancy, record keeping, music recording, banking services, book transcription, film editing, clinical advice, or teachers are being outsourced by the companies from the advanced countries to India. Debate on globalization .

LESSON 6 :Corporate Planning Definition – Strategy, Importance, Objectives and Elements Corporate planning is a type of strategic planning, responsible for mapping out a course of strategies and their implementations to empower top-management. It optimizes exposure, reach, leads, sales, profits, credibility, loyalty, sustainability, and opportunities of a business. With the help of corporate strategic planning, a business can efficiently channelize corporate management by leveraging its resources with better acumen than the other market players. Businesses of any size should incorporate such strategic planning, as it offers- • Clarity & Direction • Efficient use of resources • A way of measuring progress • Optimized decision-making • Better coordination in business activities • Effective allocation of responsibilities • Motivation and guidance to members • Analysis Strengths and weaknesses along with opportunities and threats via SWOT analysis, etc. All in all, corporate planning empowers any kind of business to accomplish its business goals in a more effective and organized manner. Corporate Planning Definition Corporate Planning is defined as forming long-term goals and objectives within the organization’s strengths and weaknesses in the existing and prospective environment. This is done to ensure the achievement of their plans by combining their short-term and long-term objectives or bringing amendments in the structural working in the organization’s composition. In the words of David E. Hussey, writer of the book- Corporate Planning: Theory and Practice- Corporate planning includes the setting of objectives, organizing the work, people and systems to enable those objectives to be achieved, motivating through the planning process and through the plans, measuring performance and so controlling progress of the plans and developing people through better decision-making, clearer objectives, more involvement, and awareness of progress. What is Corporate Planning Strategy? Corporate Planning is a strategic process applied by several business organizations to form a roadmap to grow in the market, enhance profits, gain industrial exposure, and strengthen brand identity. It is a vital tool that successful business organizations use to leverage their existing resources better and more analytically than competitors. It is the determination of business goals, formulation of diverse strategies for attaining objectives, transforming the goals into tactical plans, implementing and reviewing it to find out the progress of strategies, and finding out loopholes. Different factors around which corporate planning is channelized via effective SWOT analysis and process of corporate management are- • Creation of long-range corporate goals and objectives. • Analysis of Macro and Micro Environments. • Analysis of Strengths and weaknesses of the business • Coordination between short term and long term business plans • Structural changes in the business • Implementation of the strategic plan as per business goals • Adept use of scarce financial resources. • Right evaluation of performance as well as feedback for purposeful corporate planning Importance of Strategic Corporate Planning In the current modern era, corporate planning holds a crucial position in a business organization, be it large-sized, medium, or even a new entrant. The importance of corporate planning can be justified because some companies even hire departmental corporate managers to check the industry’s current scenario and the current status of the organization in the market. Some of the points that describe the need and importance of corporate planning are mentioned below: 1. Long-term goals Corporate Planning broadly focuses on long-term goals and sets a blueprint to achieve them in a stipulated period. Long-term goals help an organization keep its core focus on maintaining its efforts, workforce, and efforts on a pre-decided target. Corporate Planning keeps the employees engaged in their respective tasks with deadlines and ensures effectiveness and efficiency. It also brings harmony, peace, and cooperation among the employees and supervisors in a firm as they all smoothly work towards a common objective. 2. Focus A strategic business plan helps a business organization provide a focal point not to get deviated or distracted from its end goal. The first and foremost step of corporate planning involves devising a mission statement that tells the world its roles and objectives. Formulation of a mission statement aids the firm stick to its focus, do all the requisite tasks, assign responsibilities to the employees, and evaluate their work to achieve that final destination. 3. Better Decisions Developing a strategic plan helps a company make better decisions that are beneficial and helpful in attaining the mission statement. A corporate plan should be structured to spell all the information in the organization’s interest, like the skills required with the employees, machinery or equipment required, etc. Forming a roadmap to achieve the final goal helps the business people hire the best personnel for their form, arrange funds according to the tasks, and further invest in the most viable propositions. 4. A Measure of Success Corporate planning also acts as a yardstick to determine an organization’s success in achieving its goals. A firm shall periodically analyze its work to check its progress and make further amendments like replacing personnel, hiring more employees, arranging more funds, upgrading the machinery, etc. Finding, evaluating, and analyzing the loopholes periodically that block the ways of achieving the mission statement helps in the upgradation of the work and ensure efficiency and effectiveness of the tasks devised. The touchstone function of corporate planning works best in the organizations that devise plans that allow for changes in attaining the tasks. 5. Saves money The extra benefit associated with corporate planning is that it forms budgets that help save substantial sums. Budgeting allows a firm to allocate its financial resources to the projects that require it the most by cutting out unimportant expenses. Having a detailed budget tells how much cash is earned, spent, or lent. This wipes out confusion regarding the amount of money allocated to different projects. Objectives of corporate planning in Management Following are the basic objectives of corporate plans: 1. Setting a strategy The fundamental objective of framing a corporate plan is setting a business strategy. At this stage, companies should look at the opportunities and analyze the threats in the market. For this, they can make a SWOT analysis and select viable propositions for investing their funds. 2. Planning the operations Once a firm knows its mission statement, it can use these objectives and find ways of attaining them. The sole purpose of corporate planning is to help a firm plan and prepare a list of resources it requires to deliver to achieve its goals. 3. Monitoring and Control There should be measurable indicators present in a strategic plan to evaluate the progress of the work rate vis-à-vis the initial plans. It mainly includes financial theory related to accounts, the value of output, etc. 4. Review Establishing and forming well-devised instruments to devise annual reports is a crux to a successful corporate plan. Since the market environment constantly changes with events happening in the economy, a company regularly needs to review its plans, policies, and even rules and regulations associated with the operations. Elements of Successful Corporate Plan There are six elements in a successful corporate plan: 1. Gathering information Having all the information related to the firm, industry, and competitors are the primary step towards a well-defined corporate plan. Either a business is big or small, it should be aware of the happenings in the market in its sectors, find out opportunities, grab them at the right moment and beware of the threats. 2. Set the objectives of the plan Having a well-devised mission statement helps a firm stick to its focus of achieving it and keeps all the strategic work smooth in operations. Setting objectives helps form a clear mind about the work done, and the purpose of doing the work makes it fascinating. 3. Devise strategies to meet goals Having a blueprint helps in effectively achieving the objectives. Forming strategies define the work to be done by the employees. Managers and leaders mainly devise strategies considering the funds available, personnel in the organization, and the deadline to achieve the requisite target. It brings efficiency to the operations of a business. 4. Implementing the plan The next step is to implement the plans effectively. It involves the execution of the assigned tasks by the personnel within the guidelines and deadlines set. It involves the execution of the assigned tasks by the personnel within the guidelines and deadlines set. 5. Monitor plan performance An organization should monitor its work by forming progress reports, finding the drawbacks, and work on them immediately. 6. Evaluate the effectiveness of the plan In the end, a firm should see if the corporate strategy devised by it is competitive or up to the market standards. A plan should be challenging to achieve. A plan that is easy to achieve may not be a viable option in the existing scenario. This may require the organization to reset its plans and considering the market standards. What to include in a Strategic Corporate Plan? 1. Vision statement The vision statement of a business talks about business goals that it is supposed to achieve. While planning your corporate strategy, it is important to focus on your vision statement. You should also plan as per your short as well as long term goals. Your goals should be backed for your strategic planning, plus your goals should also be SMART. 2. Mission statement Next thing upon which you should pay heed while making corporate planning is a mission statement. It tells you how you are going to achieve your vision statement. It will let you know what you are planning to offer, the target market, and the USP of your company. It will offer an elevator pitch to your corporate planning just in a few lines. 3. Resources and scope Your corporate planning should also pay attention to things that you have in your organization such as your systems, structures, employees, products, accounting, assets, divisions, programs, finance, etc that play a key role in accomplishing your goals. You need to map the current structural existence of your organization to have a proper view of things incorporated and associated with your organization. 4. Objectives You should also include different business objectives and the ways you are going to measure success in your corporate planning strategy. Here, your objectives need to be measurable, strategic, realistic, achievable, and time-driven. Including vague objectives in your corporate planning statement is of no use here. Different types of objectives might include financial objectives, customer objectives, internal objectives, learning, and growth objectives. 5. Strategies Finally, you should include strategies that will help you accomplish your business objectives. Such strategic planning can be for launching any new product, or decreasing labour costs by a certain percentage, but your strategies have to directly address the associated objectives. You should also chalk out a proper plan for implementing those strategies. Corporate planning vs. Business Planning Business planning involves strategies that a business uses and applies to attain its goals and objectives. Corporate planning consists of strategies that the employees follow to meet the objectives of an organization. The following points highlight the difference between corporate planning and business planning: 1. Interdependency A business plan may exist without a corporate plan, but its strategies are linked with corporate plans. Without business planning, the goals and objectives of a firm would be ambiguous. Thus, both business plans and corporate plans are complementary to each other. 2. Effects A planning process aids a business to succeed in the market and suggests new directions and amendments as per the industry’s short as well as long-range requirements. Thus, there can be several diversified effects on business and corporate plans. 3. Considerations Corporate planning reviews each step of the working of an organization devised for achieving the mission statement. However, a business plan focuses on the organization’s overall goals, objectives, and progress. To evaluate the tasks, a business should consider several factors such as progress rate, personnel performance, requisite funds for further operations, and many more. .

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