Environmental Factors of Marketing
This paper will discuss the five environmental factors that influence global and domestic marketing decisions that organizations must make. These five environmental factors are technology, demographics, government, culture and economics. Companies are affected differently by these factors depending on the industry they are in and the size of the organization. I will be using the Washington Plaza Hotel to illustrate how these environmental factors
affect the hotel industry's marketing
decisions. The Washington Plaza Hotel is a hospitality business located in Washington, DC. They offer services such as lodging, restaurant, bar, catering and meeting space rental. The Washington Plaza Hotel's major customer base is government, tourist, non-profit organizations, local businesses and some corporate clientele. Let's now take a look at how these environmental factors affect the marketing of the hotel.
Environmental Factors that Affect Marketing
Technology has created a major impact on the way in which all organizations market their products and services. With the development of the internet, companies are now able to economically market themselves on a global level. Even smaller companies that were once not able to capture international business due to the cost factor can now do just that. The Washington Plaza Hotel is no exception. The hotel industry in DC relies heavily on tourism as a major part of its client base. Many of these tourists who visit the city are of foreign nationality. It is important that the Washington Plaza Hotel targets these people when marketing the company. Not only do they target the tourist but they also target the international business travelers that come to the city on business related trips. The hotel's website, which gives detailed information about the hotel's accommodations and services, can be accessed by potential customers all over the world. In addition, the Washington Plaza Hotel has teamed up with such web-based travel services like Orbitz, Expedia, Travelocity, Etc. in order to capture more of the global market. Before the existence of the internet, the global market was not easily reachable. Technology has the greatest affect on marketing for many organizations and certainly for the Washington Plaza Hotel as well as the hospitality industry itself.
Demographics are another environmental factor that plays a big part in the marketing of the Washington Plaza Hotel. This company is service-based and the customers must come to the hotel in order to receive those services. In this scenario it is all about location, location, location. The Washington Plaza Hotel has a lock on that. Located in the heart of downtown Washington, DC, I don't think the location could get any better. Convenient to almost all destinations in the city, the hotel prides itself on its location. Washington, DC is one of the most heavily visited cities in the world. Whether it is business or pleasure, the amount of human traffic that flows through the city on a given year is tremendous and most of this traffic needs a place to stay while they are there. That is where the Washington Plaza Hotel captures a great deal of business. The hotel is nowhere near the nicest in the city but they offer good accommodations at a reasonable price and have one of the best locations in the city. With that being said, demographics have a drastic affect on marketing for the Washington Plaza Hotel.
Government has a different affect on the marketing at the Washington Plaza Hotel than it does on most businesses. Sure the hotel has to follow laws and regulations set forth by the national and local governments in regards to conducting business but that is not the greatest affect that government has on the hotel. Since the hotel is located in the nation's capital, one of the largest customer bases is government. Whether it is conducting meetings, lodging in the guest rooms, having catered meals or all of the above, the government makes up a large percentage of the Washington Plaza Hotel's client base. With this in mind, the hotel's marketing department focuses heavily on capturing and catering to government business. Not only does it focus on domestic government but the hotel also does a large amount of business with foreign government. Government officials from all over the world visit Washington, DC on a regular basis to attend meeting and conduct business with the US government. These officials need a place to stay while they are here and what better location than in the heart of the capital. In addition to providing these individuals with lodging, the hotel can also provide space for meeting as well as attend to any food and beverage needs they might require.
Culture plays a big part in the way that the Washington Plaza Hotel does its marketing. As previously discussed, the hotel does a great deal of business with foreign customers that are visiting the United States for business or pleasure. The hotel wants these guests to be comfortable during their stay. One of the ways in which the Washington Plaza Hotel does this is by hiring employees from all different cultures. Currently they have employees from over 20 different countries that can assist with communication and help educate the hotel about foreign culture. What do these guests expect and how can we make them feel at home? These questions can be answered by talking with various employees and trying to get a better understanding of life in other countries. In addition, the hotel has employed marketing and sales managers that focus their efforts on certain parts of the globe and cultures that they are familiar with. The hotel pays for these managers to visit certain countries not only to try to capture business but also to educate them on international culture which will help in conducting business with international clients.
Economics is another environmental factor that affects the way that the Washington Plaza Hotel conducts marketing. If the economy is in a recession or downturn, people are less likely to travel and utilize the hotel's services especially if it is for pleasure. Most businesses are going to limit the amount of travel expenses they are willing to incur by sending employees on business trips during these times. This is when the hotel needs to kick it into high gear in order to capture as much of the market share out there as possible. Competition among hotels in Washington, DC is so normally pretty strong but it gets even worse during bad economic times. The Washington Plaza Hotel must recognize these times as they approach and change their marketing strategy accordingly. The hotel must find a way to get customers in the door. It must make itself still attractive regardless of the economic situation in order to flourish. Obviously, business is still going to suffer, but the marketing department must do everything within their means to lessen the blow.
The marketing department for any organization has a difficult responsibility. The success of the marketing department has the single greatest impact on the success of the business. There are several environmental factors that affect the marketing decisions
made by a company. These environmental factors include: technology, demographics, government, culture and economics. The domestic and global markets are very competitive. Companies must find a niche or be able to differentiate themselves to the consumer. When doing so they have an ethical and social responsibility to their customer to be honest and forthright. Deceptive and manipulative marketing is used all the time in today's economy. These practices may prove successful for the short-term but are sure to catch up to the guilty party. For long-term success, a company must instill trust in its customers. That is the way to prolong business success.