DIGITAL MARKETING

Digital marketing is a form of marketing for promoting and selling products

or service on the internet .it is the process of leveraging different online
marketing channels like search engine ,social media network and email to
reach your target audience through digital marketing, you can find people
interested in your offering, interact with them and build trust with your brand

OBJECTIVES OF DIGITAL MARKETING

To make online advertising more comprehensive
Gain more potential customers using research campaigns
Making your business website more effective to make marketing
To see how digital marketing helps business to reach customers
Focus on online movement. Only allow your users to show your ads
selected in certain ways in your ads. for example ads allow you to
target specific age users

ADVANTAGES OF DIGITAAL MARKETING

Global reach -a website allows you to find new marketing and
trade globally for only small investment
Lower cost -a properly planned and well targeted digital
marketing campaign can reach the right customer at a much
lower cost than traditional marketing methods
Trackable measurable result -measuring your online marketing
with web analytics and other online metric tools makes it easier
to establish how effective your campaign had been.you can
obtain detailed information about how customer use your website
or responds to your advertising
 Personalisation if your customer’s database is linked to your
website then whenever someone visits the site you can greet them
with targeted offers .the more they buy from you ,the more you
can refine your customer’s profile and market effectively to
them .
Openness- by getting involved with social media and managing it
carefully, you can build customer loyalty and create a reputation
for being easy to engage with.
Social currency – digital marketing let’s you create engaging
campaigns using content marketing tactics This content can gain
social currency being passed from user to user to user and
becoming viral
Improved conversion rates – if you have a website then your
customer are only ever a few clicks away from making a
purchase .unlike other media which require people to get up and
make a phone call or go to a shop, digital marketing can be
seamless and immediate.
DEMAND OF DIGITAL MRKETING IN COVID-19
• While covid19 pandemic as grappled the whole world ,the business
community has been hit the hardest. However, businesses have to find
innovative yet effective ways to survive and also be profitable thus,
digital marketing comes into the picture. While literally every brand is
fighting to find its space on digital platforms the demand for digital
marketing jobs has also grown folds
• Consumer market change
Usually, brands majorly focused and reaching out to consumers
through traditional or modern marketing techniques, however due to
the covid19 pandemic and lockdown og cities now brands have
switched over to digital platforms to reach out to their consumer’s .this
shall majorly remain the same even after the pandemic as it would have
become a norm of the modern by then .this lifestyle would have
changed the buying habits of consumer ,wherein now there would be

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 more comfortable in spending more money on the buying products
online then they used to brands are focusing to reach out to these
consumers through various channels to ensure maximum visibility and
profitability. primary market place change has left a void of digital
marketing jobs which needs to be done at earliest, thus creating a huge
opportunity for a career in digital marketing to grow tremendously.
• Strong opportunity for brands to create a positive image
The pandemic has also opened a door of opportunity for marketers to
reach out to the maximum audience in a single digital campaign .no matter
how depressing the reason maybe ,the through is that it is for the first time
the whole world literally switched to digital presence, thus creating a
perfect opportunity for marketers to reach out to them. Brands are
spending much more to hire an innovative work force to run online
campaigns to boost their positive brand image .
• Growth of SEO strategies for marketing
Search engine optimization is an important digital content marketing
strategy for brands now a days .most people use search engines and
relevant keys words to find results to desired queries. Marketers focus on
consumer groups that may have been locking out for queries related to
their product category. Thus it becomes paramount that their respective
product should be ranking on top of search engines to ensure maximum
visibility. This can be achieved through a well devised SEO strategy that
requires digital marketing professionals.
• Social media and website development
Social media has literally become the backbone of businesses across the
world. Businesses that were not using social media aggressively are also
trying to grow it extensively. This is happening because most consumers
spending most time indoors due to the lockdown, they tend spend more
time on social media then every .thus can majorly influence their buying
decisions. Keeping this in mind, brand have started opening up to hire
more social media professional. This is because activation of social
channels can have a direct impact on business sales of a brand .
• Maximum market reach minimum cost

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 Most brands want maximum visibility. Imagine the cost of marketing
through offline techniques including spending on boarding, pamphlet and
various other forms of marketing. Now with the rise in online buying
preference of consumers, brands have to spend much less then usually to
market their products on digital channels. However, this requires an
effective and an work force campaign plan . here is where digital
marketing professionals prove to be important for brands. In order to attain
online superiority , more and more digital marketing professionals need to
be hired .
• TOP TEN BENEFITS OF DIGITAL MARKETING OVER
TRADITIONAL MARKETING
1. Better brand awareness
2. Wide customer reach
3. Increased customer engagement
4. Real -time customer feedback
5. Data driven decision making
6. Greater market share
7. Cost effectiveness
8. High return on investments (ROI)
• B2B VERSUS DIGITAL MARKETING
Digital marketing strategies work for b2b ( business to business) as well as
b2c (business to consumer) companies, but best practices differ
significantly between the two here's a closer look at how digital marketing
is used in b2b and b2c marketing strategies.
• B2B clients tent to have longer decision marketing processes and thus
longer sales funnels relationship – building strategies work better for
these clients, where as b2c customer tent to respond better to the short
term offers and messages.
• B2B transactions are usually based on logic and evidence, which is
what skilled b2b digital marketers present. B2c content is more likely

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 to be emotionally -based, focusing on making the customer feel good
about a purchase.
• B2B decision tend to need more than one person’s input the marketing
materials that best drive these decision tend to be share able and
downloadable .b2c customers, on the other hand ,favor one -on -one
connections with a brand.
Of course, there are exceptions to every rule. A b2c company with a high-
ticket product, such as a car or computer, might offer more informative
and serious content. As a result, your digital marketing strategy always
needs to be geared toward your own customer base, whether you’re b2b or
b2c.
EMAIL MARKETING
• The concept of email marketing is simple you send a promotional
message and hope that your prospect clicks on it. however, the
execution is much more complex .first of all ,you have to make sure
that your emails are wanted.
• Individualizes the content both in the body and in the subject line
• States clearly what kind of emails the subscriber will get.
• An email signature that offers a clear unsubscribe option.
• Integrates both transactional and promotional emails
• Segment your audience to send relevant campaigns to the right people
• Create a campaign schedule
Mobile marketing is the digital marketing strategy that allows you to engage
with your target audience on their mobile devices, such as smartphone and
tablets. This can be via SMS and MMS ,social media notification, mobile app
alerts and more .
Its crucial to ensure that all content is optimized for mobile devices.
According to the pew research center, 85% of American’s own a smartphone,
so your marketing efforts can go a long way when you create content for your
computer and mobile screens .
THE BENEFITS OF DIGITAL MARKETING

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Digital marketing has become prominent largely because it reaches such a
wide audience of people. However , it also offers a number of other
advantages that can boost your marketing efforts.
KEY TAKEAWAYS
• Digital marketing promotes products and services through channel such
as websites, mobile devices, and social media platforms.
• Digital marketing have a number of tools to measure the effectiveness
of their campaigns.
• One of the best challenges digital marketers face is how to set
themselves apart in a word that is oversaturated digital ads and other
distraction.
HOW CAN YOU BECOME A DIGITAL MARKETER
Digital marketers need strong writing and social media skills, along with a
good understanding of data analytics. A bachelor’s degrees is required for
most digital marketing positions. You might also want to take digital
marketing courses or participate in a digital “boot camp. “ In addition,
completing an internship while in school can be useful. A master’s degree in
digital marketing may be useful but is not considered essential.
WHAT SKILLS ARE NEEDED IN DIGITAL MARKETING
Strong communication skills are essential if a marketer is going to be
successful in telling a company or products story to potential customers. Data
analytics skills are also important for understanding how well a marketing
campaign is performing and where it might be improved. Finally social
media skills are another must

What Is Implicit Bias in Digital Marketing?

Implicit bias, also known as unconscious bias, refers to messages that
unintentionally convey negative stereotypes or derogatory attitudes toward
certain groups. In recent years it has come in for particular notice in the fields
of advertising and marketing. In digital marketing it may manifest itself in

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something as simple as the choice of stock photos for a marketing campaign.
For instance, without even thinking about it, companies may use images of
only heterosexual White individuals while excluding Black, Indigenous, and
other people of color, along with those of.

MARKETING

MEANING AND DEFINITION

Marketing is a form of communication between a business house and its
customers with the goal of selling its products or services to them. Goods are
not complete products until they are in the hands of customers. Marketing is
that management process through which goods and services move from
concept to the customer. Marketing has less to do with getting customers to
pay for a product as it does with developing a demand for that product and
fulfilling the customer's needs.
According to the American Marketing Association Board of Directors
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large.
Dr. Philip Kotler defines marketing as "the science and art of exploring
creating and delivering value to satisfy the needs of a target market at a
profit. Marketing identifies unfulfilled needs and desires. It defines, measures
and quantifies the size of the identified market and the profit potential. It
pinpoints which segments the company is capable of serving best and it
designs and promotes the appropriate products and services."
Thus, marketing refers to all the activities involved in the creation of place,
time, possession and awareness utilities and beyond.
MARKETING CONCEPTS- TRADITIONAL AND MODERN
Concept is a philosophy, attitude, a line of thinking, an idea or notion to
relating any aspects of divine and human creations. The philosophy of an
organization in the dynamic creation of marketing is referred to as a

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marketing concept. Thus, marketing concept is a way of life in which the
resources of an organization are mobilized to create, stimulate and satisfy the
consumer at a profit
TRADITIONAL AND CLASSICAL CONCEPT
According to this concept, marketing consists of those activities which are
concerned with the transfer of ownership of goods from producers to
consumers. Here, the role of physical distribution and marketing channels is
over emphasized. It refers to marketing as the process by which goods are
made available to ultimate consumers from their place of origin. The
emphasis of marketing is on sale of goods and services. Consumer
satisfaction is overlooked.
MODERN CONCEPT
According to this concept, marketing is concerned with the creation of
consumers. According to the modern thinker Peter Drucker, Marketing is so
basic that it cannot be considered as a separate function. It is the whole
business seen from the customers' point of view...business success is not
determined by the producer but the customer.
Thus, the modern concept lays greater emphasis on customers and considers
them as kings. Marketing is not merely a physical process but is something
beyond that. It is the managerial philosophy which centre around the wants
and desires of customers.
TRADITIONAL CONCEPT vs. MODERN CONCEPT
1. Traditional marketing starts from production and ends with sale but
modern marketing
includes planning, product, price, promotion, place, people, after sale service
etc.

2. Traditional marketing concentrate on favorable products, but modern

marketing concentrates on customer needs, wants and satisfaction.
3. In traditional marketing, only those products are sold which the producer
produces. No focus is laid on consumer preference. On the other hand,

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 modern marketing indulge in production only after analyzing consumer
demands.
4. Traditional marketing is product and production oriented while modern
marketing is consumer oriented.
5. The target of traditional marketers was to earn maximum profit by
maximizing sales. But, the main motive of modern marketers is to earn
profits through satisfaction of consumer needs.
6. The principle of traditional market was caveat emptor i.e. the buyer
beware. Whereas, the principle followed by modern market is caveat
venditor i.e., let the vendor beware.

SELLING vs. MARKETING

It is a common error committed when people say they are going for
marketing when they actually go to the market to purchase goods and
services. Well, it is simply buying from consumers' end and selling from the
sellers' end. Marketing is a wider term than selling. Let us now see how
selling differs from marketing.

FUNCTIONS OF MARKETING
Marketing functions are those specialized activities that a marketer must
perform in order to identify and source potentially successful products for the
market place and then promote them by differentiating them from similar
products. The important functions of marketing are discussed briefly below:
1. Research & Development Function- A marketer has to carry out adequate
research to identify the size, behavior, culture, gender, demands etc. of the
target market segment, and then develop the products/services accordingly to
meet and satisfy the needs of target customers.
2. Buying Function- The marketing department has to assist the purchase and
supply department by sending specifications of the materials required so as to
get timely and quality materials for production.

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3. Standardization & Grading- Standardization means setting quality
standards to achieve uniformity in the product. It provides consistent quality
assurance to consumers. Grading means classifying the product on certain
accepted benchmarks or bases such as size, quality etc. Through grading, the
marketer can get higher price for quality product.
4. Packaging and Labeling Packaging is traditionally done to protect the
goods from damage in transit and to facilitate easy transfer of goods to
customers. But now it is also used by the manufacturer to establish his brand
image as distinct from those of his rivals. Another activity involved with
packaging is labeling. It means putting identification marks on the package.
Label is that part of a product which contains information about the producer
and the product.
5. Branding It is the process of stamping a product with some identification
name or mark or a combination of both. Branding means giving a distinct
individuality to a product. Some popular brands are Airtel, Sony, Lux, etc.
6. Pricing- Determination of price of a product is an important task of a
marketing manager. Price is influenced by cost of product and service
offered, profit margin desired, prices fixed by rival firms, government policy,
etc.

7. Promotion Function- The marketing manager must design adequate

strategies to make known to consumers about the availability of products in
the market. Without this function, products will remain in the hands of
producers and will never reach the consumers. Four important methods of
promotion are advertising, personal selling, publicity and sales promotion.
8. Physical Distribution- This function involves the activities which are
necessary to transfer ownership of goods to customers and also making
available goods at the right place and time.
9. Transportation- It provides the physical needs which facilitate the
movement of persons, goods and services from one place to another.
10. Warehousing- To meet the expected demands of consumers, goods are
produced or procured well in advance and stored in warehouses till they are

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transferred to customers. Warehouses protect the goods from any damage
which may be caused by any rodents, moisture, sun, theft, etc.
11. Risk- taking function- Risks are involved in almost all levels of marketing
process. Risk taking in marketing refers to the financial risk that is inherent in
producing and handling goods, including the possible loss due to a fall in
prices and the losses from spoilage, depreciation, obsolescence, fire and
floods etc.
12. Customer Support Services- This function relates to developing customer
support services such as after sales services, handling customer complaints
and adjustments, providing credit facilities, maintenance services, technical
services etc. These services provide maximum customer satisfaction and
develop brand loyalty for a product.
All the above, and in some situations, more other functions are performed by
the marketing manager.
MARKETING MIX-THE 7 Ps of MARKETING
Marketing mix represents a blending of decisions in few areas for the
satisfaction of the needs of customers. E.J. McCarthy had formerly given four
elements of Marketing Mix. These include: Product, Price, Promotion, and
Place or Physical Distribution. These elements are popularly called the "four
Ps of Marketing Mix". As marketing became a more sophisticated discipline,
one more element was added to these 4 Ps- People. Later on two more Ps
were added, especially for the service sector, ., Process and Physical
evidence.. These elements are inter- related because decisions in one area
usually affect actions in the others. The blend or mixture of these elements
are often referred to as Marketing Mix. It basically concentrates on the target
consumers.

1. Product: It involves planning, developing and producing the right type of

products and services to be offered by the firm to the customers. It deals with
the product range, design, durability, branding, packaging, color and other
features.
2. Price: A product is only worth what a customer is willing to pay for it. The
marketing manager must determine the price in such a way that it covers the

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cost of production and distribution of the product and a reasonable margin of
profit. Other variables influencing price are the price fixed by competitors,
government regulation etc. It is the only element of marketing mix that
generates revenue- everything else represents a cost.
3. Promotion: It deals with informing the customers about the firm's product
and persuading them to purchase the same through personal selling,
advertising, publicity and sales promotion.
4. Place or Physical distribution: It is concerned with making the product and
service available to the customers at the right place, at the right time and in
the right quantity. The place where the customers buy a product and the
means of distributing the product to that place must be appropriate and
convenient to the customers.
5. People: It generally refers to the employees of the business organization
who deal with the customers.
A marketing environment encompasses all the internal and external factors
that drive and influence an organization's marketing activities.
Marketing managers must stay aware of the marketing environment to
maintain success and tackle any threats or opportunities that may affect their
work.
we'll explore the components of the marketing environment, their influence
on marketing decisions, and how businesses can navigate these complexities
for successful campaigns.
Why is a marketing environment important
A marketing environment is vast and diverse, consisting of controllable and
uncontrollable factors. A good grasp of your marketing environment helps to:
• Identify opportunities:
Understanding your marketing environment helps you notice and take
advantage of market opportunities before losing your edge. For example, say
your marketing team sees an uptick in digital buying over in-shop sales. You
may decide to allocate more resources to your online marketing
Manage changes: Paying attention

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to the marketing environment also helps manage changes and maintain
growth in a dynamic economy. Marketing managers can forecast and
determine timely marketing campaign strategies by monitoring
Keep a check on threats
Giving attention to the importance of marketing environment, the company is
able to keep a through check on the factors that can have a negative impact
on its business operations and act as an obstacle in its trajectory of growth
and success. The brand has to keep an eye on the threatening factors such as
growing competition in the market, price variations, involving tastes of the
consumer, and other socio economic factors.
Understand the competition

E-COMMERCE

Electronic commerce, commonly written as E-Commerce, is the trading in

products or services using computers networks, such as the Internet.
Electronic commerce draws on technologies such as mobile commerce,
electronic funds transfer, supply chain management, Internet marketing,
online transaction processing, electronic data interchange, inventory
management systems, and automated data collection systems. Modern
electronic commerce typically uses the World Wide Web for at least one part
of the transaction's life cycle, although it may also use other technologies
such as E-Mail.
E-Commerce businesses may employ some or all of the following:
Online shopping websites for retail sales direct to consumers,
Providing or participating in online marketplaces, which process third-party
business- to-consumer or consumer-to-consumer sales,
Business-to-business buying and selling,
Gathering and using demographic data through Web contacts and social
media,
Business-to-business electronic data interchange,

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Marketing to prospective and established customers by E-Mail or fax for
example, with newsletters.
Engaging in pretail for launching new products and services.
E-Business
"Electronic business, or E-Business, is the application of information and
communication. technologies in support of all the activities of business.
Commerce constitutes the exchange of products and services between
businesses, groups and individuals and can be seen as one of the essential
activities of any business. Electronic commerce focuses on the use of ICT to
enable the external activities and relationships of the business with
individuals, groups and other businesses or E-Business refers to business with
help of Internet i.e. doing business with the help of Internet network. The
term E.Business was coined by IBM's marketing and Internet team in 1996.

E-Business is a more general term than E-Commerce. However, in this book

we will only use the term "E-Commerce", because every business transaction
finally is involved in selling or buying of products or services. And the term
"E-Commerce obviously is more widespread than the term "E-Business".
Digital economy
"Digital economy refers to an economy that is substantially based on
computing technologies. The digital economy is also sometimes called the
Internet Economy, the New Economy, or Web Economy. Increasingly, the
digital economy is intertwined with the traditional economy making a clear
delineation harder.
We will not use the term digital economy further on in this book, because
business is business be it traditional or digital. And boundaries are moving
every day due to technical development. However, we will repeatedly use the
term digital or digitalized to indicate that subjects or activities are based on
ICT.
1 PRELIMINARY DEFINITION

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Some authors write extremely enthusiastically like this: E-Commerce enables
the comprehensive digital execution of business processes between suppliers
and their customers via global public and private networks.
However, this definition rises some questions:
BASICS AND DEFINITIONS
What does comprehensive mean Does it mean the total process Is everything
digitalized
What about transportation and delivery of real goods Obviously here are
some
limits for digitalization, though sooner or later 3d-printing may change a lot.
Why should businesses be run electronically? Is enablement a value in itself?
Or do we digitalize businesses because we can reduce costs, accelerate
processes and increase profit.
This definition, though given in many E-Commerce books, is too much
marketing- minded and not helpful to understand the advantages (and
disadvantages) of "digitalized" business reasonably.

FINAL DEFINITION
To come to a final definition of E-Commerce let us start with some
constituent attributes of E-Commerce:
Digitalization of business:
• This means a comprehensive usage of ICT (Information & Communication
Technology) not only within a business organization as it has been done
during the last decades by traditional information systems,but now through a
more and more seamless linking and cooperation of information and
communication systems of all involved business partners.
• The comprehensive usage of ICT has been enabled by some technologies
and technical standards, which have been accepted globally
Focus on business processes:

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• We support business processes, of course, as we did it for the last decades,
but now the total processes, running through several organizations and
crossing their boundaries, are supported.
• We automate business processes not longer only within organizations, as it
was "the" traditional objective of ICT, but now the automation is related to
the total process, running through all involved organizations, and not only to
the sub-process within the own organization.
• We increase the speed of business processes. Additional potentials can be
realized with the coupling of processes between different organizations.
• We increase the economic efficiency of business processes, again through
coupling of business processes at the boundaries of the business partners.
Usage of a global network:
• Internet plays a dominant role and has become a universal technical
infrastructure. Thus it builds a global virtual place where every organization
and person being interested in making business can come together without
geographical and time restrictions.
• Global networks allow the exchange of information without any restrictions
in time and independently from any geographical distances.

In the electronic marketplaces there is a matching of customers and suppliers,

an establishing of the transaction terms, and the facilitation of exchange
transactions.
With the broad move to the Web-enabled enterprise systems with relatively
uniform capabilities as compared to the legacy systems, a universal supply-
chain linkage has been created.
Collaboration
The Web is a vast nexus, or network, of relationships among firms and
individuals.
More or less formal collaborations are created or emerge on the Web to bring
together individuals engaged in knowledge work in a manner that limits the
constraints of space, time, national boundaries, and organizational affiliation.

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Communication
As an interactive medium, the Web has given rise to a multiplicity of media
products.
This universal medium has become a forum for self-expression and self-
presentation
Communication
As an interactive medium, the Web has given rise to a multiplicity of media
products.
• The rapidly growing M-Commerce enables connectivity in context, with
location-sensitive products and advertising.
In the communications domain, the Web also serves as a distribution channel
for digital products.
Connection
Common software development platforms, many of them in the open-source
domain, enable a wide spectrum of firms to avail themselves of the benefits
of the already developed software, which is, moreover, compatible with that
of their trading and collaborating partners.
The Internet, as a network of networks that is easy to join and out of which it
is relatively easy to carve out virtual private networks, is the universal
telecommunications network, now widely expanding in the mobile domain.
Main features of M-Commerce are:
Location independence of customers,
High availability of services through well established mobile phone
networks,
Increasing computing power of mobile devices,
Interactivity of mobile devices .
Security localization of customers through cell structure,
Accessibility of customers,
the automatic an organization's procurement processes using Web-based
applications. It enables widely dispersed customers and suppliers to interact

17
and execute purchase transactions. Each step in the procurement process is
captured electronically, and all transaction data is routed automatically,
reducing time and cost of procurement. Properly deployed, E-Procurement
In a narrower sense E-Procurement is seen as the ordering of MRO goods on
the basis of Web-based application systems directly by the demand carrier to
reduce process costs in the area of so-called C-articles (C-articles represent a
small portion of the total financial procurement volume, but cause a
significant portion of the procurement costs
Access provider
The access provider ensures access to the Internet. We should have in mind,
that somebody has to pay the access provider so that we can get access to the
Internet. Who pays? We or somebody else? In many areas of the world it is a
totally privatized business, though sometimes in the political arena the access
to the Internet is declared as a modern human right. Obviously there is a
similarity to telephone network. However, it works in this privatized form.
Traditional business models, which are somehow similar to the business of an
access provider, are operators of a technical infrastructure, e.g. telephone
networks, car highways, or railways.
Search engine
Search engines are the most used software in the Internet. They are the
starting step for many Internet-based activities, not only but, of course, also if
somebody is looking for a business opportunity. Again we must ask: Who
pays? The one, who wants to find something or someone? Or the one, who
wants to be found?
A traditional and similar business model is given by the so-called "yellow
pages", where firms are listed and grouped according to branches and
locations.
Online shop
An online shop is a website, where you can buy products or services, e.g.
books or office supplies.
Traditional and similar business models are direct mail selling (no shop
facility, offering of goods via a printed catalogue, ordering by letters or

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telephone calls) and factory outlets (producer has own shop facility, does not
sell his products via merchants).
Content provider
Content providers offer content, a completely digital good, e.g. information,
news, documents, music. A specific variant of a content provider is the
information broker, who is a trader of information.
Again the following question has to be put: Who pays? The one, who wants
to have access to an information? The one, who wants to provide an
information?
Traditional business models in this area are newspaper publishers, magazine
publishers, radio and television broadcasting services or publishing
companies.
Business Web Agora
Objective: To run a marketplace for goods and values.Attributes: Market
information available, negotiation processes established, dynamic pricing
through negotiations between market participants.
Role of the customer: Market participant.
Benefits: Negotiable products and services.Examples: eBay, auctions.yahoo.
Business Web Aggregator

BUSINESS ENVIRONMENT
WHAT IS BUSINESS
Business is an economic activity which is related with continuous production
of good and services for satisfying human wants.
1. Exchange of goods/services
2. Deals in numerous transactions.
3. Profit is main objective.
4. Risk and uncertainties.
5. Buyer and seller.

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6. Marketing and distribution of goods/services.
7. To satisfy human wants.
8. Social obligation
Business does not function in isolation or in vacuum. It is affected by internal
and external factors. These internal and external factors collectively
constitute business environment. Internal environmental factors are within the
control of business, whereas external factors are beyond the control of
business.
'Environment' refers to the system in which human beings live and they have
to adjust themselves according to it. So it is surroundings, external agents,
influences or circumstances under which something
exists.
*Business Environment can be defined as the aggregate of all those forces,
factors and institutions which directly affect the working of a business
organization.
Some of these constituents may be static, while others may be changing.
"Business Environment is the aggregate of all conditions, events and
influences that surround and affect the
CHARACTERISTICS/NATURE OF BUSINESS ENVIRONMENT
Business Environment is very complicated, dynamic and multi-dimensional
and affects different business institutions in different ways. It exhibits many
characteristics like:
1. Complex
Environment comprises of many factors. All these factors are related to each
other. Therefore, their individual effect on the business cannot be recognised.
This is perhaps the reason which makes it difficult for the business to face
them.
2. Dynamic
As is clear that environment is a mixture of many factors and changes in
some or the other factors continue to take place. Therefore, it is said that
business environment is dynamic.

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3. Uncertain
Nothing can be said with any amount of certainty about the factors of the
business environment because they continue to change quickly. The
professional people who determine the business strategy take into
consideration the likely changes beforehand.
4. *Multi-dimensional
Business environment is related to the local conditions and this is the reason
as to why the business environment happens to be different in different
countries and different even in the same country at different places.
6. Interdependent components
The different factors of business environment are co-related. For example,
change in the import-export policy with the coming of a new government.
In this case, the coming of new government to power and change in the
import-export policy are political and economic changes respectively. Thus, a
change in one factor affects the other factor.
IMPORTANCE/SIGNIFICANCE OF BUSINESS ENVIRONMENT:
Business and its environment are closely inter-related and mutually
interdependent. Environment has its bearing on business and business has its
bearing on environment. The success of business lies in understanding the
environmental changes and adapting its business policies accordingly.
The surroundings of business enterprise which are constantly changing, carry
with them both opportunities and risks or uncertainties which can make or
mar the future of business. Significance of the study of environment in
business sector may be explained as follows:
1. Early identification of opportunities helps a business organization to be the
first to exploit them.
2. A business organization should make its policies keeping in view the
demands of environment.
3. The study of business environment is important to ensure optimum
utilization of resources like, financial resources, human resource and physical
resource etc.

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4. Environment analysis helps the business organizations to identify strengths
and weaknesses.
5. Environment analysis helps the business organizations to identify threats
and explore opportunities available to business.
6. Environment analysis helps in adapting latest technological development
which results in improved efficiency.
7. Scanning the business environment helps to understand Political Situation
and its effect on business.
8. Scanning the business environment helps to understand economic policies
of Government and their impact on business.
9. Because of globalization, the impact of international events on business is
increasing. To understand global events and their impact on business, study
of international environment is must.
10. By environmental analysis, business organizations come to know about
the strategies of competitors to
formulate counter plans.
11. Environment analysis helps in understanding the market conditions i.e.
change in demand/supply, change in fashion, taste, boom or depression etc.
SCANNING BUSINESS ENVIRONMENT
There is a close and continuous interaction between business and its
environment. So it is essential to understand and scan the environment to
ensure effective utilization of resources. SWOT analysis is an analysis
undertaken by business firms to understand their external and internal
environment. The term SWOT consists of four words:
S = Strengths
W = Weaknesses
0 = Opportunities
T = Threats
SWOT analysis is applied to formulate effective organizational strategies.
Through SWOT analysis, the business firms can match Strengths and

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Weaknesses existing with an organization with the Opportunities and Threats
existing in the external environment.
COMPONENTS/TYPES/CONSTITUENTS/FACTORS OF BUSINESS
ENVIRONMENT
Every business faces two types of environments simultaneously i.e. Internal
Environment and External Environment.
1. INTERNAL ENVIRONMENT
All those factors within an organization which impart strengths or cause
weaknesses constitute the internal environment. These factors can be
controlled by business but they are quite important in shaping the behaviour
of people working in it. Hence, managers have to take internal factors into
account while taking actions.
2. EXTERNAL ENVIRONMENT
All those factors outside the organization which provide opportunities or pose
a threat to the organization make up the external environment. These factors
are those over which the business organization has no control.
According to William Glueck and Jauck
"In environment there are external factors, which constantly bring
opportunities and threats to the business firm. In includes Economic, Social,
Technological and Political conditions."
Examples of situations that may cause change in the external environment
include:
(i) Improvement in production techniques
(ii) Fluctuations in the levels of demand
(iii) Fluctuations in interest rates
(iv) Changes in laws and regulations
(v) Changes in taxation
(vi) New social trends, fashions or life styles
(vii) International influences
TYPES OF EXTERNAL ENVIRONMENT MICRO ENVIRONMENT

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Micro environment consists of factors in the company's immediate
environment that affect the performance of the company. These include the
suppliers, marketing intermediaries, competitors, customers and the public.
MICRO ENVIRONMENT
1. Suppliers
Suppliers are important for any business unit. Suppliers are those who supply
the inputs like raw material and components to the company. Organizations
should keep two things in mind regarding suppliers:
Reliability
Multiple suppliers
2. Customers or clients.
A business exist only because of its customers. Hence, a major task of a
business is to create and sustain customers. Monitoring the customer's
sensitivity is a pre-requisite for business success.
A company may have different types of customers
(i) Individual and household customers
(ii) Government bodies
(iii) Foreign customers
(iv) Retail customers
(v) Wholesale customers
To succeed in capturing and sustaining customers, following points must be
kept in mind:

(i) Buyer's behaviour data can be used in constructing a customer profile.

(ii) Geographical factors should also be analyzed to know the opportunities

and threats.

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(iii) In the era of free trade, foreign customers can be attracted by making
such products which can compete with foreign products.

(iv) Single customer of a company is full of risks as it places the company in

a poor bargaining position.

(v) The business firm should make separate products for separate segments.
Following can be the basis of segmentation:

(a) Income level of customers

(b) Age of customers

(c) Personality and life style of customers

(D)Tastes and preferences of customers

(e) Quantity to be purchased by customers

(f) Education level of customers

ENTREPRENEURSHIP
INTRODUCTION TO ENTREPRENEURSHIP
Definition of Terms
Definition of an entrepreneur

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An entrepreneur is a person who identifies a business opportunity, harnesses
and obtains the resources necessary to initiate a successful business activity.
The entrepreneur implements the idea
Undertakes to operate the business
An entrepreneur is therefore a central key individual in the society who
makes things happens for economic development.
Entrepreneurship meaning
In the broader sense entrepreneurship refers to the means of stimulating
innovative and creative undertakings for a better business community or
world.
The act or process of identifying business opportunities and gathering the
necessary resources to initiate a successful business activity.
Entrepreneurship is a French word meaning to undertake and focuses on a
business enterprise Entrepreneurship can exist in any situation therefore it is
the creation of values through
establishing a business enterprise.
Entrepreneurship means having an idea of one's own and trying to implement
the idea to create values on it.
Entrepreneurship is a term which encompasses what entrepreneurs do i.e
Identifying a business opportunity of a particular demand
Look at the opportunity as a process of creating, something that did not exist.
Constantly searching/ harnessing ones environment and resources to
implement the activities.
Creating a totally new product and using it in as new.
Entrepreneurship there is the practice of starting a new business existing
businesses in response to identifying opportunities
Self-Employment
Working independently and earning a living from it. This is a concept that
arises when the entrepreneur relies on revenues from his business as a
source of income

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 What is Unemployment? Advantages and disadvantages of Self
Employment?

What is Salaried Employment? Advantages and Disadvantages of

Salaried employment? Enterprise
A business undertaking by an individual for the purpose of making a
profit.
Factors impeding the growth of Entrepreneurship
High Taxation Levels
Corruption and Official Harassment
Unregulated competition from outside countries
Decline in personal incomes
The high cost of finance
Lack of entrepreneurial culture
Poor transport and communication networks
Lack of skills and knowledge
Explain the distinctions between an Entrepreneur and a Manager
Contribution of Entrepreneurship to National Development
The economic growth, the improved quality of life, the equitable distribution
of resources and the capacity of the economy to deal with economic,
social and environmental development.
Main objectives of national development include:
Provide basic needs to every citizen: food, shelter, health, security,
education,
clothing

Elimination / Reduction of poverty: reduce rural-urban migration

Provision of
opportunities for employment and personal advancement

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 Trying to narrow the income differences between the rich and the poor.
i) Employment Creation:
ii) Promotion of National Productivity: This is through production of
goods and services within the country and therefore they contribute to the
Gross Domestic Product (GDP)
iii) Raising Standards of Living: It's measured by the capacity of people
of a country to buy goods and services. Entrepreneurs contribute by
employing people and giving them salaries or wages to buy their
necessities.
iv) Conservation of foreign Exchange: Entrepreneurs produce goods and
services that are needed by people and reduction in importing those goods
and hence the government saves foreign exchange.
v) Export Promotion: Entrepreneurs who produce goods and services for
export earn vi)Conservation Agent: Entrepreneurs can contribute to
conservation and utilization of resources e.g. manufacturing a Jiko that
uses sawdust instead of wood charcoal
vii) Rural development which in effect.
Promotes change to the formal sector from informal sector Equitable
development
Reduced rural-urban migrations.
viii) Development of technology through
establishment of research institutions ii) education systems
ix) Government revenue
Through taxes.
From domestic borrowing (TBs)
x) Facilitating community development through

Establishment of small businesses ii) Participation in community dev.

Projects

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 xi) Providing a positive role model and facilitating.
Competition between domestic entrepreneurship and imported
Stimulating dev. Of entrepreneurship.
xii) Reducing dependence on imported goods and services.
xiii) Stimulates competition through
Quality production methods are adopted
Quality products are produced Variety goods and services are produced.

xiv) Facilitated development of the financial sector through which;

Capital accumulation is possible through savings

Loaning is facilitated
Development of the capital market.
The Functions of an Entrepreneur
i) The bearing of uncertainty is the primary function of the entrepreneur
i.e losses or profits.

ii)The management of the business enterprise ie can delegate

iii)Provision of risk capital and invention.
iv) Identifying gaps in the market and turning such gaps to business
opportunities i.e to initiate a business.

v) Financing the businesses, through raising and mobilizing the necessary

resources to exploit opportunity.

vi Searching for business opportunities through environmental scans.

vii) Mobilization of resources needed to start and run a business e.g. from
a) Personal savings

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b) Friends & relatives
c) Financial institutions e.t.c
viii) Evaluation of business opportunities to access viability and any other
benefits that might accrue to the business.
ix) Provide the necessary leadership for the business and those working in it.
ADVANTAGES OF ENTREPRENEUR
i.) Financial gains
ii.) Self-employment which leads to job satisfaction and flexibility
iii.) Provide job opportunities to the unemployed or those seeking better jobs.
iv.) A means of opening up new industries especially in the rural areas
facilitating globalization
v.) A source of generating income and increased economic growth.
vi.) Facilitates competition encouraging high quality products
vii.) Facilitates production of more goods and services
viii.) Leads to the development of newer markets
ix.) Promotes use of modern technology in especially small- scale
manufacturing to enhance higher productivity
Drawbacks of entrepreneurship
a) Challenges of a being an entrepreneur
long working hours
poor pay
unclear future
fear of losing all that has been invested
bankruptcies and closure
b) Other challenges

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 Fear of delegating the problem do it yourself and know it all competition by
established business lack of funds especially before break even management
by employees
EVOLUTION OF ENTREPRENEURSHIP
The Evolution of Entrepreneurship in Kenya
Interest in the development of entrepreneurship and small enterprise in
Kenya gained momentum as a possible remedy to the stagnation of economic
development and the escalating unemployment problem between the early
1960 and 1970s
Although there were attempts by the government to develop
entrepreneurship, the main impetus came from the international labor
organization (ILO) report.
The report centered on the potential of the informal sector and suggested that
the bulk of Kenya's urban workers were self-employed in small enterprises.
The report proposed that the development of this sector could.
Entrepreneurial Culture
Refers to the way of embracing the concept of finding new opportunities in
business and gathering the necessary resources to fill the opportunity.
Many governments around the world want to promote entrepreneurship
because they have
recognized the importance of entrepreneurship.
In other words entrepreneurial culture is a way of people embarrassing life by
participating in activities that enable them create new business enterprises.
ENTREPRENEURIAL OPPORTUNITIES
Identification of a business idea
Development of a business plan
Location of a business demand evaluation
Registration of the business
Choice of the business organization.

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