Factors Affecting Marketing Essay

INTRODUCTIONA line of reasoning princip totallyy is the organized effort by individuals in an organization to produce goods and service and to sell these goods and serve in a market place to arrive at a good profit margin. The operating surround for all organizations whether they be commercial, charitable, g overnmental, or in the usual sector more generally, is never static and seldom entirely predictable, and lav therefore profoundly continue a telephoners course of action. An organization can enamour the various surroundingsal forces performing on it.COMPONENTS OF THE MARKETING ENVIRONMENTThe Internal environs concerns the resources, processes and policies an organization manages in order to achieve its goals. These elements can be influenced designately by an organization. The External purlieu consists of the little Environment and the Macro Environment. The Macro Environment consists of the political, social, frugalal, legal and technological influences, and or ganizations usually drive home very confine influence on each of these. The Micro Environment consists of competitors, suppliers and indirect service providers, who mannikin the way an organization achieves its objectives. In this environment, organizations have a often judgment of convictions stronger level of influence. small ENVIRONMENTMicro environment consists of those organizations that either directly or indirectly influence an organizations operational performance. There argon three main types 1. Those companies that compete against the placement in the pursuit of its objectives. 2. Those companies that supply crude materials, goods and services and those that add value as distri preciselyors, dealers, and retailers in the trade channel. 3. Those companies that have the potential to indirectly influence the performance of theorganisation in the pursuit of its objectives. Analysis of the performance environment is undertaken so that organisations can adapt to better po sitions, relative to those of their stakeholders and competitors. An Industry consists of various firms that market similar reapings and services. gibe to Porter, a leading Professor on Competitive Strategy in the Harvard Business School in his work on How Competitive Forces Shape Strategy, we should review the competitive environment within an sedulousness to identify the major(ip) competitive forces, as this can help assess their contact on an organisations present and future competitive positions. Porter suggests that competition in an industry is a composite of five main competitive forces. These are the level of threat that new competitors will enter the market, the threat posed by substitute products, and the dicker power of both depraveers and suppliers. These, in turn, call for the fifth force, the book of current competitors.New EntrantsWhen examining an industry, we should consider whether economies of plate are required to operate successfully within it. Economies of scale are the cost returnss that enterprises obtain due to size, come output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output. New entrants may be restricted through government and regulatory policy, or they may well be frozen out of an industry beca map of the capital requirements necessary to set up rail line.For causa, in the oil and gas industry beca consumption of the capital required for the extraction and refining operations. Companies may be out of a market because companies within that market are operating using proprietary products or services or technologies for congresswoman, the pharmaceutical industry where patents protect companies investments in new medicines.SubstitutesConsumers consider the switching costs associated with much(prenominal)(prenominal) a decision, which in turn, affects their propensity to substitute the product or service for an opposite offering for practice customers consider the switching costs from mobile call rate packages to internet packages and consider their flexibility in transferring messages. They also consider the relative priceperformance of one offering over an some different for role model as the telecommunications markets continue to move with the development of broadband internet services, there are a word form of different companies such as Airtel, Aircel, Reliance etc operating in the same competitive marketspace.BuyersCompanies should consider their salmagundis to one individual company. The discernment is, if one buying company purchases a large volume of products from the furnish company, it is in all likelihood to be able to occupy price concessions when there are lots of competing suppliers in the securities industry relative to the proportion of buyers. Buyers may also increase their bargaining power through backward integration. A Company is said to have backward integrated wh en it moves into manufacturing the products and services it previously brought from its suppliers. An different important part is price sensitivity. Depending on their trading circumstances, some companies might be more sensitive to price than other buyers. If such companies are more prices sensitive and yet there are lots of competing suppliers for their businesses, they are likely to display less loyalty to their suppliers.Most companies enhance other factors associated with an offering for example customization and after sale services to try to reduce a client companys price sensitivity for example Kitchen equipments are provided with free demo sessions on home delivery. Buyers include Consumers, individuals and households that buy goods and services for personal inspiration Businesses, that buy goods and services for further processing or for use in their production process Resellers, who buy goods and services in order to sell them at a profit Government agencies that buy go ods and services in order to produce public services or transfer them to those that motivation them International markets, buyers of all types in foreign countries.SuppliersAn organisation should determine how suppliers operate and the extent of their bargaining power. If a small derive of suppliers operate within an industry with a large number of competitors, the suppliers have the stronger bargaining advantage. On the other hand, in an industry where there is a large number of suppliers with few competing companies, the buying companies have the bargaining advantage. The suppliers need to be evaluated on theuniqueness and the quality of materials provided that enhance their bargaining situation. An increase in raw material prices will affect an organisations Marketing Mix outline and may correct force price increases.Close supplier relationships are an effective way to remain competitive and pay back quality products. In some Industries, suppliers increase their market domin ance by forward integrating. It is a business strategy that involves a form of vertical integration whereby activities are expanded to include control of the direct scattering of its products for example tea manufacturing company selling based on auctions bringing in gross sales outlets at their factories to increase local community sales. It allows a Company to control its own supply duress better, but also allows it to sell at lower prices, thereby increasing sales and profit.Competitors each company faces a wide range of competitors. A company must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace. No single competitive strategy is best for all companies. Competitor analysis and monitoring is crucial if an organisation is to maintain or rectify its position within the market for example an analysis of the Diary Industry helps to know the market segmentation, dowry and the major players and their contribution and competitive opportunities. We should consider each companys structure, current and future developments and its a la mode(p) financial results. We should also consider the different types of goods and services that competitors offer in different market sectors. meter and quantifying market responses to any new strategy developments that the company initiates are also important factors.OTHER MICRO ENVIRONMENT FACTORSShareholdersAs organizations require investment to grow, they may decide to raise money by ledger entry the stock market. They move from private to public ownership. The introduction of public shareholders brings new squelchs as public shareholders fate a return from the money they have invested in the company. Maintaining Shareholders interest will substantiate huge profits.MediaOrganizations need to manage their media activities so that it can help promote the positive things al closely the organisation and reduce the meet of a negative event on their reputation. S ome organisations will even employ Public dealings (PR) consultants to help them manage a particular event or incident. Television programmes with a wide and more direct audience can also have a very powerful impact on the success of an organization.Marketing IntermediariesMarketing Intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers. They are the distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers who buy and resell merchandise. They perform important functions more cheaply than the company can perform itself.MACRO-ENVIRONMENTThe company and all of the other actors operate in a large macro environment of forces that shape opportunities and pose threats to the company is cognize as macro environment. Six largely uncountable external forces influence an organizations marketing activities and shape opportunities is known as macro environment.Major external and uncontrollable factors that influence an organizations decision making,and affect its performance and strategies. These factors include the economic, demographics,legal, political, and social conditions, technological changes, and inseparable forces is known as macro environment.Demographic EnvironmentDemography is the study of human existences in terms of size, destiny, location, age, gender,race, occupation and other statistics. The demographic environment is of major interest to marketers because it involves peopleAge Structure of the Total Population and Its ChangesThe number of different ages of people such as the number of children, teenage, youth, old person should be kept in mind at the time of doing marketing strategy. Because a product cannot be certified for every ages ofcustomer. Moreover, at the time of increasing of population the growth of demand of product rises should be noticed otherwise marketing process wont be effective at all. On the contrary at the tim e of the decrease of population the demand falls. This is the reason at the time of doing marketing strategy the matter of population must be analyzed.For example PONDS ANTI ageing cream is specially focused on a particular customer theme of women above 30 years.Changed Family LifeNow a daytimes one can advantageously identify the changes of family life sentence style such as- the growth of working class women, income capability of women, adult brotherhood of women and the right of divorce of women etc. also important for doing marketing strategy. For this reason people are anxious(predicate) to do a less physical labored task. And prepared food, half cooked food, bread, washing machines etc. are used more. So, now we use packet masala, pressure cooker, rice cooker, washing machine, go to restaurants for food for saveour time but those things created market for the product and the marketers getting benefit from their work and growing rapidly.Geographical Shift in PopulationGeo graphically living of population and the shift of geographical living of population create impact on marketing. For a lot of reason people tend to go to big cities. For this reason peoples life style and their demand style are changing. Moreover, producing product for tourist, job seeking people, businessmen is also remunerative business. Besides, people are going abroad and coming back to the country and making a change in their demand style which has to be kept in mind to keep pace with the globose growing market This leads to less production in farming products and industry concentrate more on construction tools as majority of farmers move towards cities and mostly involved in construction work as helpers.Economic EnvironmentMarketers require buying power as well as people. The economic environment consists of factors that affect consumers purchasing power and disbursementpower/ patterns. Marketers must pay close attention to major trends and consumers spending patternsChangin g IncomeThough our per capita income grows but customers real purchasing power falls for 3 decades. cast up rate of inflation, increase rate of unemployment, taxes, economic uncertainty also responsible for the downward shift of economic condition of customer. For trade and foreign support some peoples purchasing power are increasing but limited earned peoples condition getting worse day by day.Changing Consumer Spending PatternsThe spending patterns are different basis on earning patterns so their buying patterns also different. Food, housing and transportation use up the most house hold income. As family income rises, the percentage expense on food declines, washed-out on housing remains constant, and both the percentage spent on most other categories and that employ to saving categories. At the time of increasing of income the eating habit gets changed. Again the storage of product or the shortage of product may cause the change of demand.Natural EnvironmentThe inborn environ ment involves the natural resources that are needed as inputs by marketers or they are affected by marketing activities. environmental concerns have grown steadily during the past three decades. Marketers should be aware of several trends in the natural environment.Shortage of Raw MaterialAssets can be divided as limitless but not increasable and limited but increasable. As example- air and water is unlimited but for some industrial reason these resources gets polluted. For this reason mass consciousness is raised or some countries enforced law. Forest and food is limited but it is possible to increase its production. To make run the forest or wood related businesses we should run short taking tree plantation measures. On the other hand oil, gas, coal etc. natural resources are also problematic. Though these resources are enough in some cases available but the expense to usethese resources are increased a lot. So the alternative resources are looked for or experimenting is going on to lessen the expensesIncrease of PollutionSome industrial activities are undoubtedly harming the nature. The filth of factories consisting of poison is polluting both blot and water. As a result taking food seems threatening.Technological EnvironmentThe technological environment is perhaps the most dramatic forces now shopping own destiny. Technological environment involves forces that create new engine driver creating new product and marketing opportunities.Faster Pace of Technological ChangeTechnology is changing day by day. A company must have to fix their step accordance with the technological changes. Otherwise, it is undoable to survive in the market competition. At the present day all types of communication are do by modern technology. To marketing goods in BD one has to stay connect with modern technology.High investigate & Development BudgetFor better production one company may require a host of people for research the market & requite a group of expertise for pro per budget in production which will help to take part in competition with others. Sometimes it seems that the authority of the marketing department spends a huge amount of money for research & development budget whereas they forget about the product. Along with research one should take his/her eye on the product.Political EnvironmentMarketing decisions are strongly affected by developments in the political environment. Political environment consists of laws, government agencies, government itself and pressure groups that influence or limits various organizations and individuals in a given society. For instance Alcohol advertising is the promotion of alcoholic beverages by alcohol producers through a variety of media. Along with tobacco advertising, it is one of themost highly regulated forms of marketing. All forms of alcohol advertising is banned India. Though the manufacturers try to promote their product by using the similar name for the products that can be advertised and promo ted in media it still has an impact. cultural EnvironmentThe cultural environment is made up of institutions and other forces that affect a societys basic determine, perceptions, preferences and behaviors. There are few cultural values which affect marketing decision making. These are, continuity of cultural value, shifts in secondary cultural value, people views of organization/ others, etc.Persistence of Cultural valuePeople in a given society hold many beliefs and views. Their result belief and values have a high degree of persistence. For example, Bangladeshi people are peace loving, getting hook up with for once, strongly hold their religion and being honest. These beliefs shape more specific attitudes and behaviors found in occasional life. Core beliefs and values are passed on from parents to children and are reinforced by schools, colleges, universities, and business and so on.Sub-culturesEvery culture has some sub-cultures. People of sub-cultures belief, ethics, attitu de etc. are like to be core culture but they have secondary beliefs. Like rich people. They have different thinking from the other people and they have different life style. They like to present them as different from others and it affects marketing to a certain extent.References1.Marketing, ASIAN EDITION, OXFORD UNIVERSITY PRESSBy Paul Baines, Chris Fill, Kelly Page, Adapted by Piyush K. Sinha 2. How Competitive Forces Shape Strategy, Harvard Business Review, Harvard Business School Publishing by Porter, M.E3.Market Audit and Analysis Nicole Lorat4.Principles of marketing- Young,Et ALOnline Referenceswww.wikipedia.comimages.google.co.in