Review of Factors Affecting Marketing
Marketing decisions don't happen in isolation - they're influenced by numerous factors both inside and outside a business. Understanding these factors is crucial for creating effective marketing strategies that help businesses achieve their goals.
Key Definitions:
- Marketing: The process of identifying, anticipating and satisfying customer needs profitably.
- Marketing mix: The set of controllable, tactical marketing tools (the 4Ps: product, price, place, promotion) that a company uses to produce the response it wants in the target market.
- Target market: A specific group of consumers at which a company aims its products and services.
📈 Internal Factors
These are factors within the business that influence marketing decisions:
- Budget: The financial resources available for marketing activities
- Business objectives: What the business aims to achieve (growth, profit, market share)
- Corporate culture: The values, beliefs and behaviours that shape how a company operates
- Resources: Human, physical and technological resources available
🌎 External Factors
These are factors outside the business that influence marketing decisions:
- Competition: Other businesses targeting the same customers
- Economic conditions: Inflation, unemployment, economic growth
- Social trends: Changing consumer behaviours and preferences
- Technology: New tools and platforms for marketing
- Legal and regulatory factors: Laws affecting marketing practices
The Marketing Environment: PESTLE Analysis
PESTLE analysis helps businesses understand the external factors that might impact their marketing strategies. Each letter stands for a different factor:
📈 Political
Government policies, political stability, trade restrictions
Example: Brexit changing trade regulations between the UK and EU
💰 Economic
Interest rates, inflation, disposable income levels
Example: Cost of living crisis affecting consumer spending
🏢 Social
Demographics, cultural trends, lifestyle changes
Example: Growing interest in sustainable products
💻 Technological
New technologies, automation, digital platforms
Example: Social media marketing replacing traditional advertising
📜 Legal
Consumer laws, employment regulations, health and safety
Example: GDPR affecting how businesses collect customer data
🌱 Environmental
Climate change, sustainability concerns, environmental regulations
Example: Plastic packaging taxes affecting product design
Market Segmentation and Targeting
Understanding your market is essential for effective marketing. Businesses divide their markets into segments to target specific groups more effectively.
👥 Segmentation Methods
- Demographic: Age, gender, income, education
- Geographic: Country, region, urban/rural
- Psychographic: Lifestyle, values, interests
- Behavioural: Purchase habits, brand loyalty, usage rate
🎯 Targeting Strategies
- Mass marketing: One product for everyone
- Segment marketing: Different products for different segments
- Niche marketing: Specialising in one small segment
- Micro-marketing: Customising for individual customers
Case Study Focus: Coca-Cola's Segmentation Strategy
Coca-Cola uses different segmentation approaches to target various consumer groups:
- Demographic: Diet Coke targets health-conscious adults, while Fanta targets younger consumers
- Geographic: Different flavours in different countries (e.g., cucumber-flavoured Sprite in Russia)
- Psychographic: Coca-Cola Zero targets those who want the taste without the calories
- Behavioural: Smaller bottles for occasional drinkers, larger bottles for regular consumers
This segmentation strategy has helped Coca-Cola maintain its position as a market leader despite increasing competition.
The Marketing Mix (4Ps)
The marketing mix is a framework businesses use to develop their marketing strategy. It consists of four key elements:
📦 Product
What you're selling to customers, including features, benefits, quality, branding, packaging and after-sales service.
Factors affecting product decisions:
- Customer needs and wants
- Product life cycle stage
- Competitor products
- Brand positioning
💲 Price
How much customers pay for your product, including discounts, payment methods and credit terms.
Factors affecting pricing decisions:
- Costs of production
- Competitor pricing
- Customer perception of value
- Economic conditions
- Business objectives (profit, market share)
🏠 Place
How and where customers can access your product, including distribution channels, logistics and retail locations.
Factors affecting place decisions:
- Target market location and shopping habits
- Nature of the product (perishable, digital, etc.)
- Competitor distribution strategies
- Cost of different channels
📢 Promotion
How you communicate with customers about your product, including advertising, PR, sales promotion and direct marketing.
Factors affecting promotion decisions:
- Target audience media habits
- Marketing budget
- Product type and features
- Competitor promotional activities
- Stage in product life cycle
Evaluating Marketing Strategies
When assessing marketing strategies, businesses need to consider how well they address the factors that affect marketing. Here are some evaluation criteria:
- Effectiveness: Does the strategy achieve its marketing objectives?
- Efficiency: Does it make good use of available resources?
- Adaptability: Can it respond to changes in the marketing environment?
- Competitiveness: Does it give the business an advantage over competitors?
- Sustainability: Can it be maintained in the long term?
Case Study Focus: ASOS Marketing Strategy
ASOS, the online fashion retailer, has successfully adapted its marketing strategy to changing factors:
- Technology factor: ASOS invested heavily in mobile app development when smartphone usage increased
- Social factor: They embraced body positivity by using diverse models and not retouching photos
- Economic factor: During economic downturns, they expanded their value ranges while maintaining quality
- Environmental factor: They launched the "ASOS Responsible" filter to meet growing demand for sustainable fashion
By constantly monitoring and responding to these factors, ASOS has maintained its position as a leading online fashion retailer despite increasing competition.
Assessment Preparation
When preparing for assessments on factors affecting marketing, remember to:
- Clearly identify both internal and external factors in case studies
- Explain how specific factors influence each element of the marketing mix
- Use business terminology correctly and consistently
- Support your points with relevant examples from real businesses
- Evaluate the relative importance of different factors in specific scenarios
- Consider how factors might change over time and how businesses should respond
Remember that examiners are looking for your ability to apply marketing concepts to business situations, not just recall facts. Think about how businesses make decisions in the real world based on the factors they face.