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Activities for environmental factors affecting marketing
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The PEST + D + N Framework and Marketing Planning
The PEST + D + N framework is a foundation on which marketing can begin with as the parts will have an affect upon any outcomes. Political, economic, social, technological, demographic and natural environments are the influences that, singularly or together, will need to be taken into consideration when marketing a product. This is show aptly by Applbaum (1998, pp.324) when he states ‘The implicitly held theory of needs and wants underlying and informing market activities’. Here he is saying that the information necessary to market a product comes from the consumer’s needs and wants.
Political influences come directly from the government. This can be local, state or federal government or the controlling power. The rules and regulations of how business deal with consumers, the expectations and rights of both business and consumers, are delivered by government. In Australia we have what is called the Trade Practices Act 1974, this is a creation of parliament to implement fair trade practices to protect both consumers and businesses, below is an extract from the Trade Practices Act relating to business and how it may not influence the market by monopolizing the market.
Misuse of market power—a corporation with a substantial degree of market power is prohibited from taking advantage of this power for the purpose of eliminating or damaging an actual or potential competitor, preventing the entry of a person into any market, or deterring or preventing a person from engaging in competitive conduct in any market.
(Australian Government, trade practices act 1974, section 3A)
Economic factors come from both sides of the fence. On one side is business with there concerns about profit margins and cost effectiveness. How much will a product cost to manufacture and will it be easily accessible to many consumers? Palmer (1992) says it is the governments’ responsibility to maintain the macroeconomic environment so as to manipulate the economy. On the other side of the fence are the consumers who have a disposable income and a need to spend it which help maintain the economy.
Social and demographic environments do seem to be synchronous with each other, as the social needs reflect the demographics of an area and vice versa. For example an outback mining town will not have the need for 200 dress shops because the population will be, mainly, male. Where as in, the social setting of, any large city those shops will be a necessary part of the community.
First the story of the Standard Oil Company briefly describes the limits of power. When Rockefeller was trying to take over the market he formed the “South Improvement Plan. When this occurred the public grew very angry with the price of trains, so nobody went on the railroads and Rockefeller eventually got the bill, until prices changed. This is an example of how the consumers, make the company run and when nobody wants to buy your product the individual must adjust. Another example would be when the Standard Oil Company was primarily the only oil company and was forced to split into thirty nine different independent companies. This shows that one business cannot control the entire market and interventions will need to be done accordingly so that a company does not have all the power.
The conventional definition of market power is usually expressed as "the power to raise price." A company with market power has some amount of discretion to set its own price. Others can define market power as the power to force a purchaser to do something that he would not do in a competitive market, and have ordinarily inferred the existence of such power from the seller's possession of a predominate share of the market (Eastman Kodak v. Image Technical Servs, 1992). Market power could also be defined as the power profitably to raise or maintain price above the competitive benchmark price. The competitive benchmark is the price that would prevail in the absence of the alleged anticompetitive conduct. This benchmark price often differs from both the current price and the perfectly competitive price (Salop, Steven C, 1999). In economics, market power is the ability of a firm to alter the market price of a good or service (Wikipedia). A firm with market power can raise price without losing all customers to competitors.
Competition in economics is rivalry in supplying or acquiring an economic service or good. Sellers compete with other sellers, and buyers with other buyers. In its perfect form, there is competition among many small buyers and sellers, none of whom is too large to affect the market as a whole; in practice, competition is often reduced by a great variety of limitations, including monopolies. The monopoly, a limit on competition, is an example of market failure. Competition among merchants in foreign trade was common in ancient times, and it has been a characteristic of mercantile and industrial expansion since the Middle Ages. By the 19th century, classical economic theorists had come to regard competition, at least within the national state, as a natural outgrowth of the operation of supply and demand within a free market economy. The price of an item was seen as ultimately fixed by the confluence of these two forces. Early capitalist economists argued that supply-and-demand pricing worked better without any regulation or control. Their model of perfect competition was marked by absolute freedom of trade, widespread knowledge of market conditions, easy access of buyers to sellers, and the absence of all action restraining trade by agencies of the state. Under such conditions no single buyer or seller could materially affect the market price of an item. After about 1850, practical limitations to competition became evident as industrial and commercial combinations and trade unions arose to limit it. A major theme in the history of competition has been the monopoly, which represents a business interest so large that it has the ability to control prices in a given industry. Some governments attempted to impose competition through legislation, as the United States did in the Sherman Antitrust Act of 1890, which made many monopolistic practices illegal. Other governments depend on monopolistic organizations to boost their economy like the zaibatsu and keiretsu in Japan.The United States Monopolies in the United States have a long history. They usually are associated with industry and the post-Civil War period, but their history originates in Elizabethan England. By the time the American colonies had become independent, the term “monopoly” was already well established. Yet nothing was written about monopolies in the Constitut...
In order to achieve this, the report is structured to firstly analyse the market segmentation variables and secondly buyer behaviour. The conclusion will bring together these findings by distinguishing Hanndia Pest Control’s market target. Segmentation Segmentation is the process of determining the breakdown of the target market into smaller, specific variables that make it easier to evaluate. Gabbott M (2004, p 159) describes the consumer-related segmentation variables as being Geodemographic, Psychographic and Behavioural. Geodemographic This segmentation variable combines the elements of the consumer’s demographics and geography.
Armstrong, G, Adam, S, Denize, S, Kotler, P, 2010, Principles of Marketing 5th Edition, Pearson Australia Group, Frenchs Forest
The text states that marketing is both an art and a science where constant tension exists between the formulated and creative sides. At its essence, marketing is about "identifying and meeting human and social needs". It encompasses both a set of actions which seek to identify customers' needs as well as a social process of establishing a relationship with the customer to buy their products; this relationship is vital to the long term success for a company and a critical part of the marketing equation (Kotler & Keller, 2006).
With supply solely, factors involved with regulation of the supply also control some aspects of demand. Things such as production costs and desired net profit can determine whether a business succeeds or not. Having a balance between quantity and price is the greatest control any business can have. Pricing is obviously one of the most beneficial, or destructive, parts of a business. Pricing is the first and most valuable thing an individual will look at, which will overrule most other judgments based off of quality and detail. Balancing the price, however, helps to create a pristine product, with just the right amount of detail that will fuel the market, while still generating a steady net income.
Kotler, P. & Keller, K.L., (2009), A Framework for Marketing Management. 4th edition, Pearson Prentice Hall: USA
Marketing is a process of determining a consumer’s needs, devising a product or service to satisfy those needs, and trying to focus customers on the goods and services you are offering. Marketing is extremely important, and a fundamental building block for business growth. A marketing team is given the task of creating customer awareness through a variety of different marketing techniques. If a business does not pay close attention to their consumer demographic and needs, they will eventually fail over time. Two important aspects of marketing include acquiring new customers, and the preservation and growth of relationships with current customers. Marketing has always been viewed as a creative outlet, which encompassed advertising, distribution, and the selling of goods and services. Marketing staff will also try to anticipate what customers will want in the future, often being accomplished with market research. In summation, a good marketing plan should be able to create a favorable proposition or series of benefits that a customer can value through goods or services. The marketing mix is normally described as the strategic positioning of a product or service in the marketplace, using the specification of the four Ps. During the early 1960’s, Professor E. Jerome McCarthy of Harvard Business School stated that a marketing mix contains four elements. The four key points are product, pricing, promotion, and placement. It is recognized that all these aspects must be present to ensure a successful business model within a given industry. We will now take a thorough look at the four marketing mix points.
Every company wants to understand why people decide to buy its products or others. Firstly, we have to understand why people buy certain kind of product. People buy products because they need them. A need is activated and felt when there is a sufficient discrepancy between a desired or preferred state of being and the actual state. (Engle£¬Blackwell and Miniard. 1995. p407 ) For example, when you feel hungry, what you needs is some food. It is very important for marketer to understand the needs of consumers. All the consumers may have the same needs, but the ways which they satisfy what they need are different. Here is a example, Chinese people would choose rice when they feel hungry, whilst British people may choose bread to satisfy their needs.
products they want. The goal is to not only provide consumers with what they know they
He listed these five factors as follows: “(1) informing, (2) influencing, (3) reminding and increasing salience, (4) adding value, and (5) assisting other company efforts.” (p.246). To clarify that, the first most important aspect is informing people, which means company needs to enhance the awareness of the consumer about their products by mentioning its advantages and features. Advertising also affects the products in two ways. Firstly, by basic demand, which builds consumer desires for old products of the company and secondly, refers to a new brand of the company.
Too often, a marketing function is misunderstood, because many people do not understand what is meant by ‘Marketing’.
VARGO, S. L. & LUSCH, R. F. 2004. Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68, 1-17.
Nevertheless, one of the most important constants among all of us, regardless of our differences, is that, above all, we are buyers. We use or consume on a regular basis food, clothing, shelter, transportation, education, equipment, vacations, necessities, luxuries, services, and even ideas. As consumers, we play an essential role in the health of the economy; local, national and international. The purchase decision we make affect the requirement for basic raw materials, for transportation, for production, for banking; they affect the employment of employees and the growth of resources, the successfulness of some industries and the failure of others. In order to be successful in any business and specifically in today’s dynamic and rapidly evolving marketplace, marketers need to know everything they can about consumers; what they are want, what they are think, how they are work, how they are spend their leisure time. They have to find out the personal and group influences that affect consumer decisions and how these decisions are made. In these days of ever-widening media choices, they need to not only identify their target audiences, but they have to know where and how to reach