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Marketing Environment in Nepal

Discuss the marketing environment in Nepal, and explain the major components of the microelements of marketing.

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angel profile image
Angel Paudel

Political-legal, technological, economical and socio-cultural factors dictate the marketing environment in the context of Nepal. They are both directly and indirectly linked to impact business decision and affect their marketing activities.

Looking at the political and legal aspect, the nation is undergoing a change in the process where the constitution is to be implemented and also with the formation of provinces and smaller bodies, the rules and regulations for administrative and legal aspects are going to change as well. The businesses need to adjust according to the change. With the current political dynamics after the recent merger of CPN-UML and CPN-Maoist to form a new party making them the largest party based on the won electoral votes in the Asia and third largest going by full strength in the same continent, they have got a significant grip on the policy-making and implementation. Several legal acts like the import-export act, company act, customs act and other are a subject of concerns to the manager. These policies influence the marketing directly or indirectly.

Technological development affects the way industries function and with the current age of technology, Nepal is advancing at a very rapid pace in this sector. As per the statistics of Nepal Telecom Authority (NTA), the internet penetration rate as of Kartik 2074 is nearly 63% in Nepal. This is a lot higher considering Nepal being an underdeveloped nation and many of its population aren’t literate. The e-commerce businesses are getting noticed very much as well due to the changing scenario and many businesses are building their online brand. Not only that the businesses are using all the other means of technology to get the most out of the situation and reach to their target audience.

The economic environment of Nepal is another element contributing to marketing environment in Nepal. In a nation with a favorable economic environment, business organization can have more opportunities while they may face different challenges if it’s not really well. Nepal is considered to be an agricultural nation with most of the population involved in this sector, however, the highest income comes from other industries like the service-oriented such as tourism and banking sectors to name a few. Also, remittance is another strong source of GDP in the nation. Nepalese nowadays are more inclined towards investing their money in stock market, land, gold, and home instead of investing in the foundation of a business and industry. So, a lot of effort needs to be made to improve the current situation.

Population, lifestyle, religion, education, language and several other factors form the socio-cultural environment. As per the Central Bureau of Statistics (CBS), the total population of Nepal stands just under 24.5 million with the population of female nearly 800 thousand more than that of the male. The population of working age has increased to 57% with over 15 million people falling under this category. Religion is another factor contributing to it with most of the population following Hinduism. The nation also saw a rise in the literacy rate which currently stands at 65.9% as per the CBS report. National language practiced is Nepali but with the latest constitution, several other languages have got an entry point and recognized as provincial languages. These all require businesses to make an adjustment in their marketing plan accordingly to target their customers (Central Bureau of Statistics, 2012).

Talking about the micro-elements of marketing, they’re those factors which can be influenced by the business. It includes customers, employees, competitors, media, shareholders, and suppliers (Evans, 1988). A business can influence customers by bringing out products that the customer wants or by aggressively targeting ads or with the use of some discount offer as such. An example of it can be by providing a 50% discount on a product the business sells. A business can also influence an employee by proving them with some bonuses or some added benefits like lunch, travel allowances and alike. Competitors can also be influenced by the business as the direction the business takes to bring the products out and the pricing it sets determines the actions that the other rival companies take. Moving on, media checks and balances the business and can be influenced by these businesses. It can be through the added treatment because they provided them with proper content or ads to run or being kind enough due to the business doing more of good to people. Stakeholders are another which the business can influence. Taking an example of Xiaomi, they’re targeting to attract ten billion dollars in funding and decided to not retain more than five percent of their profits from all but internet services sales (where there’s no barrier) just before the announcement of that they’ll be raising funds for stock. In all the documents, they do stress themselves to be internet company even though that contributes to very little of their profit or sells so they want to show their stakeholder that they’re an internet company and fully committed to that end to influence them to invest. Finally, suppliers are the ones that can be influenced as well as if the business provides them with proper care and continue to give a good number of orders, the supplier will always be committed fearing the company might move. So, a business can use the same to leverage lower cost of manufacturing and thus influence them as well.


Central Bureau of Statistics. (2012). National Population and Housing Census 2011 (National Report) (pp. 1-4). Kathmandu, Nepal: Government of Nepal.

Evans, M. (1988). Marketing Intelligence: Scanning the Marketing Environment. Marketing Intelligence & Planning , 6 (3), 21-29.

dipadhungana profile image

As defined by business jargons, marketing environment refers to the internal and external factors that surround the business and influence its marketing operations. Some of these are controllable while some are not. The firm should be aware about its marketing environment to gain competitive advantage and minimize the negative impact on business due to change in environmental factors.

The marketing environment in Nepal consists of economic, political-legal, socio-economic and technological factors that directly or indirectly affects the business activities. Political parties, administrative policy, legal provision, constitution, economic condition, trade and transit policy, industrial policy, privatization policy, income distribution, economic policy, population, pressure group, reference group, social class, lifestyle, attitude, beliefs, religion, education, language, level of technology, research and development and technology transfer together form the business environment of Nepal (Project Management). Strong economic system, favorable economic policies, political stability and healthy competition provide opportunities to marketing but elements such as increase in instability, unhealthy competition, political instability, frequently changing economic policy and development in technology provide threats.

The micro environment refers to the immediate business environment that can be adjusted, manipulated and controlled by the firm. It is also known as task environment (Pahwa, 2018). The elements of micro environment of business are:

  • Customers: Business revolves around fulfilling the needs and wants of customers. Every firm needs customers to survive and grow therefore companies’ marketing plan should be able to attract and keep customers with products that meet their needs (Tabetando, 2013).

  • Employees: Employees contribute significantly to the success of business. The quality of goods and services depends on the quality of employees that can be enhanced through training and development (Business Jargons, n.d.).

  • Competitors: If a business does not take into consideration the competitors’ responsiveness, the firm can find it very difficult to compete against them (Tabetando, 2013). Watching closely on the competitors’ activities is must for any business to plan accordingly and gain competitive advantage.

  • Suppliers: Suppliers provide raw materials required to produce finished goods. In order to capture the market and provide customers with best products, it is necessary to choose the suppliers who provide high quality materials at reasonable price.

  • Shareholders: While planning and executing any business activity, maximization of shareholders’ wealth should be considered so that they continue investing in the business.

Micro environmental factors may affect a company’s business operations, growth and success. A company should always be ready to do a good analysis of these factors and know their responsiveness to make necessary adjustments in marketing activities. However, it can be difficult for a firm to have entire control of micro environmental factors but the company should make an effort to continuously redefine, restructure and redesign the company’s competencies and networks in order to sustain in the market (Tabetando, 2013).


Business Jargons. (n.d.). Marketing Environment . Retrieved from Business Jargons: businessjargons.com/marketing-envi...

Pahwa, A. (2018, January 8). Marketing Environment: Explanation, Components, & Importance. Retrieved from Feedough: feedough.com/marketing-environment/

Project Management. (n.d.). Retrieved from Marketing Environment in Nepal and Its Impact on Marketing Activities: analysisproject.blogspot.com/2013/...

Tabetando, E. A. (2013). Micro Environmental Factors’ Influence On The International Marketing Strategy of Swedish Companies In Norway. Linnaeus University.

ujjwalpoudel profile image

Marketing environment consists of forces that directly and indirectly influence the organizations marketing activities. Armstrong, Kotler, Harker & Brennan (2015), in their book Marketing: an Introduction, marketing environment is also termed as the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. To make understanding easier the environment can be categorized under two heading i.e. micro environment and macro environment. Micro environment is any factor that in close vicinity and can be influenced; whereas, macro environment are those aspects that are further away and cannot be influenced. Here, the micro environment factors include the actors close to the company namely shareholder, employee, customer, competitors, media, suppliers etc. and the macro environment factors are larger societal forces namely demographic factor, economic factor, technological factor, political factor etc.

Nepal’s geographical location between two Asian giant’s India and China is important for the development of marketing activities. These two countries comprise half of world’s population and largest market in world. But, the result is just opposite to both of them to Nepal. The political instability is the main reason behind the decline of the economy. Economic environment is the very important environment to affect marketing. If the economic environment is favourable, business organization can get sufficient opportunities, and if it is adverse, they have to face different challenges. Nepal’s economic environment has been gradually changing which also needs to be changed. In the same way, the country is not enriched by resources of minerals and petroleum products. Instead of focus to these minerals and petroleum, we can be enriched to agricultural sector, tourism sector, import & export of tea/coffee/garments and so on. The inflation rate in Nepal was recorded at 6 percent in March of 2018 (Nepal inflation rate, 2018). This doesn’t show the flow of new commerce in business. The economy is also not so friendly that it is a waiting for investors. The government should strictly determine to the new investors in business so that it ultimately boom the whole economy.

Micro environment deals with the components and they are shareholders, customers, suppliers, employees, stakeholders, competitors and media.

a. Shareholders are the owners of organisations where they may decide to raise money by floating on the stock market i.e. move from private to public ownership.

b. Customers are the centre of the marketing environment. They are the rivals, which compete with the firm in the market and resources as well. The marketing is done for them and so value creation is targeted to meet their satisfaction.

c. Suppliers are the ones who provide inputs to the business like raw material, equipment and so on. They hold the power when they are the only or the largest supplier of their goods. The supplier’s product is a core part of the buyer’s finished product and/or business.

d. Employees help in the production of goods or service. Their hard and diligent work contributes in creating customer value. If a business employs staff without motivation, skills or experience it will affect customer service and ultimately sales.

e. Stakeholders are related to the product or service directly affects the marketing environment. Stakeholders such as banks that lend money to the market, safety and quality check authorities, credit and insurance companies directly affect the market environment.

f. Competitors also affect how the marketing strategy or product development will be like. Those who sell same or similar products and services as your organisation are your market competition, and they way they sell needs to be taken into account.

g. Media is an important platform that the companies can use to get their product noticed by the mass. Positive media attention can "make” an organisation (or its products) and negative media attention can "break” an organisation. Organisations need to manage the media so that the media help promote the positive things about the organisation and reduce the impact of a negative event on their reputation (Oxford College of Marketing, n.d.).


Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction . Pearson Education.

Nepal inflation rate. (2018). In tradingeconomics . Retrieved from tradingeconomics.com/nepal/inflati...

Oxford College of Marketing. (n.d.). The Impact Of Micro and Macro Environment Factors on Marketing . Retrieved from blog.oxfordcollegeofmarketing.com/...

ncitujjwal profile image

My product is GPS Tracking System

GPS tracking system is designed to collect vehicle location data and visualized it on the MAP. Tracking device usage is very simple and convenient, all records are available in real time, data is saved to the database and can be accessed by time in the future. Trackers send various information, such as coordinates, speed, altitude and other (Kamble, 2014).

The most serious competitors are Himalayan Solution Pvt. Ltd, Maulik Taranga Technology, Technology Sales, Kalpabrikshiya Technology Pvt. Ltd, Telematics Tech, Hiecom etc. They are currently doing same business which we have been doing. But the difference is, we have a little bit of updated hardware and software system, we have separate desktop and mobile software. We have waterproof GPS product so we can easily use this system in anywhere for an animal in the jungle and Himalayas region. We have a license of GPS device of module GT02, GT06 and that was approved by Ministry of Information Communication and Technology. The Nepal Telecom Authority also certified us to use this frequency in Nepal and this system is not harmful to Telecom products and towers. So that was a beneficial thing in our business. We have authority to use this system in an ambulance, school bus, private vehicle, and public bus, an employee of the organization, tourist, school kids, and wild animals. We are the only one company who gets the certification from Nepal Telecom Authority Nepal. And we have the MOU of International Electronic giants OMEGA Company. That factor really adds some value to our organization and customer trust us then use our product than other companies.

Our Strengths are:

1.Marketing Plan

Our team has developed the overall marketing strategy, each team member is responsible for implementing a corresponding marketing plan for the area of his responsibilities. These responsibilities include deciding on the promotional marketing for our market segment and pricing. The team has to work to preserve the overall company image while meeting the requirement of each market segment to the maximum extra possible (Markgraf, 2017).

2.EMI based Payment System/ Flexible Payment System

We offer our customers for very flexible EMI based monthly payment system from Banks, e-SEWA, Khalti and another different E-commerce sector. So that all target customer can easily afford our system. It is affordable for all national citizens, government, NGO and other Private Sector.

3.Perfect Support System

A support system provides tools and technologies to leverage the power of the human capacity to think and to solve problems in Real Time. We provide the effective and reliable support system for our customer. If the system has arisen any kinds of the problem our support team ready to solve this problem within an hour.

4.Experienced technical resource

In our company has an expert, experienced and skillful technical resources in hardware as well as software filed. They can easily customize and update the product in real time.

5.Research and Development Team

We have a new department of Research and Development. The main duty of this department is what types of update need in future? They spend their all most time to do some research and get some results then suggest the results with the technical team. Research and development Team always gives an innovative idea for our product, how to make it as a new product in the future market (Sibiya, 2011).


Nothing is perfect in the world. The major weakness and affected environment of our product are:

  1. Small Market

  2. More competition than Demand

  3. We have no any manufacturing company/Industry

  4. Lack of skill Human Capital.

  5. Illiteracy about Technology / Less aware from Technology

Kamble, K. (2014). SMART VEHICLE TRACKING SYSTEM. International Journal of Distributed and Parallel Systems (IJDPS) Vol.3, No.4 , 2-3.

Markgraf, B. (2017). The Roles and Responsibilities of a Sales and Marketing Team. Scientific Research Publishing .

Sibiya, P. (2011). The Role of Research and Development in. International Journal of Scientific & Engineering Research, Volume 2, Issue 8.

shantamilan profile image

Anything that directly or indirectly affects the market is considered as marketing environment. To make understanding easier the environment can be categorized under two heading. Any factor that is in close vicinity and can be influenced is called the micro environment while those aspects that are further away and cannot be influenced can be termed as macro environment. Kotler and Kellar have defined these two categories of environment as task environment and broad environment. The task environment comprising of customers, suppliers, stakeholders, shareholders, employees, competitors and media while the broad environment consisting of demographic, economic, social-cultural, natural, technological and political-legal environment. (Kotler & Kellar, 2012)

With two economic giants surrounding Nepal from all sides, the marketing environment is highly influenced by products from both the countries. India having open boarders and easier access, has higher stake in the market of Nepal and directly influences it. Everything from basic food, medicine to luxury goods are imported with little amounts being produced locally.

With an inflation rate of around 6% in January 2018 (Economics, 2018) and with a huge liquidity crisis that has been stretching for the better part of 2017 into 2018, Nepal’s marketing environment does not look very inviting for investors. "Bankers are worried as they have not been able to encourage deposits even after offering higher interest rates. In this difficult time, NRB is doing all it can to ease the liquidity crunch and had been injecting liquidity through repos to the banks. (Tandukar, 2017)” But with the gradually improvement and stability in the government, the people have expectation that the market environment will get better and regain composure.

Marketing is involved in creating customer value and satisfaction. For this there are various components that contribute for the value creation. Micro environment deals with these components which are customer, suppliers, employees, stakeholders, competitors and media.

Customers are the center of the marketing environment. The marketing is done for them and so value creation is targeted to meet their satisfaction. Thus catering to the customer and developing a sense of relation for long term loyalty is important.

Supplier are responsible for getting the products to the customers. These products have to reach the customers on time and in the quantity that they have demanded. Thus supplier plays a vital role in delivering the goods for customers’ satisfaction.

Employees help in the production of goods or service. Their hard and diligent work contributes tremendously to the creation of customer value. Timely and quality production is maintained by these employees and so directly affect the marketing environment.

Stakeholders that are related to the product or service directly affects the marketing environment. Stakeholders such as banks that lend money to the market, safety and quality check authorities, credit and insurance companies directly affect the market environment.

Competitors also affect how the marketing strategy or product development will be like. Companies should plant to their strength and at the same time be aware and try and have strategic advantage over their competitors.

Media is an important platform that the companies can use to get their product noticed by the mass. Various form of media such as television, radio, social media sites, newspaper, stickers, billboards etc are all forms of media. It is important to know what type of media should be used for what type of customer groups.

These are the microelements of marketing environment that directly affect it. Marketing person needs to understand the advantage of these micro factors to sell their product.


Economics, T. (2018). Nepal Inflation Rate . Retrieved from Trading Economics: tradingeconomics.com/nepal/inflati...

Kotler, P., & Kellar, K. L. (2012). Social Responsibility Marketing. In K. L. Philip Koter, Marketing Management (pp. 170-171). New Jersey: Prentice Hall.

Tandukar, S. (2017, January 17). How acute is the liquidity crunch? The Himalayan Times , p. 1. Retrieved from thehimalayantimes.com/business/how...