Although marketing is roughly defined as any
business activity that moves producer goods to a
consumer, the concept of marketing actually involves
several elements commonly known as the "marketing mix":
product, promotion, distribution, and pricing. Each mix
includes numerous components, each having an effect on
marketing strategies. For example, marketing effects
consumer perceptions as well as purchasing decisions.
What external influences must a business consider in its
approach to sell its product?
Six environments, always growing and changing, effect the
marketing mix, namely, demographic, economic, natural,
technological, political and legal, and cultural. As may
be expected, many of the concepts within a particular
marketing mix overlap. Two principles of marketing,
however, do not change: You must first have a product or
service to market, and you must have a target market to
spend your marketing dollars. Thus success requires a
firm grasp of the relationship between each part of the
marketing mix and the environments. The product mix is
the most fundamental arena within a business; that is,
you must have a product -either a durable or non-durable
good or a service- to market to consumers or industries.
Further, to provide the product, your business must study
fully the demographics of the target area (the size,
density, location, age, sex, race, and occupation, among
other factors, of the human population). Your product
must then be something needed or wanted by the people
within the specific geographical location you're
targeting.
In addition to demographics, you must satisfy three
conditions before a consumer will purchase a product:
desire for it, the means to purchase it, and the
willingness to pay the offered price of it. If the people
in your demographic market do not meet these three
requirements, then, of course, your product will not
sell. Knowing the economic environment will prevent you
from trying to market your product to those who either
cannot afford it or who have no previous spending pattern
for the type of product you are offering.
Other environments also have an impact on your marketing
strategies. The natural environment, for example, is
always concerned with the product. You may certainly
encounter poor sales if your company is known for
pollution or wastefulness of raw materials. The
technological environment bears noting, too, for it
replaces itself every ten years, especially in the world
of computers and on-line transactions. As a result,
today's products will fail if they don't keep pace with
technological advances, no matter how inexpensive the
products. You must also consider the political and legal
environments because you must adhere to strict government
rules. To name but a few, the government has set up
safety precautions, informative labels, and copyright
rules to protect the consumer from potential problems.
And, if the product is in any way dangerous, consumers
will just take their business elsewhere. In short, there
are too many other companies that produce similar
products, and you have to stay competitive. Finally, you
must consider the admittedly subjective area of cultural
environments. Because cultures differ from country to
country, your product should not offend the people you
choose as your target market. To put it another way, it
would be stupid, to say the least, to open a meat market
in a city wherein the primary religion forbids the
consumption of meat. Whether primary or secondary values,
they are nearly impossible to change in any culture. In
America, by contrast, with its large number of people
carrying a wide array of views, it is easier to design a
product agreeable to a large number of people. Still, any
time you design a product, and you're ready to introduce
it to the consumer, you must have a plan for
promotion.
Perception is reality; thus you have to understand the
promotion mix of your targeted market. This means
whatever consumers think about your product, whether they
are correct or not, is what your product becomes. You
must convey what you want consumers to see your product
as, a potentially difficult process. After all, you are
not selling the product; you are selling the benefits
your product provides.
How can you promote your product? Some businesses have a
sales force while others use a major medium such as
television, radio, newspapers, or magazines. In choosing
the means by which to promote your product, it is vital
that you go over the demographics of your target market
thoroughly. You may choose to use a medium such as
television or billboards in an urban area, but television
and billboards might not be a good idea for rural areas.
The method you choose, in either case, has to be highly
visible to your target market. This is why you see gun
advertisements in hunting magazines and not in
Cosmopolitan.
The economic environment is as important as demographics
in many ways. Economic statistics must be considered as
you research the demographics of your target market. Of
late, concern for the natural environment has been an
effective advertising tool for companies as well. Because
of a worldwide interest in the depletion of natural
resources, some companies will likely increase their
advertisements stressing the use of recycled goods in the
manufacturing of their products. Likewise,
energy-efficient operations can appeal to consumers.
Consumers are dazzled by the flashy billboards and
intriguing commercials made possible by our technological
advances, thereby commanding the consumers' attention to
at least look at a product. Gone are the times of black
and white advertising.
In promoting your product, you must also keep in mind the
role that the political and legal environment plays.
Obviously, false advertising and soliciting, to name but
two, carry severe repercussions. You cannot say what
consumers want to hear; you must tell them the truth or
else find yourself in the middle of a costly lawsuit in
terms of your business and your image. Finally, as the
cultural environment changes over decades, we find an
increase in restrictions as well as a laxity of them.
For example, in the past ten years or so, our culture
has become more accepting of provocative advertisements
(Guess images come to mind). Germany, on the other
hand, has been more lenient than America with its sexual
imagery, but it has a stronger opposition to violence
than we do. It is important, therefore, to look at what
is culturally accepted before you choose your promotional
contents and techniques. Moreover, in all situations, you
have to continually evaluate the results of your
decisions.
Not only do you have promotional considerations, but you
have to determine your distribution mix. How will you get
your product to the consumer? What determines the
channels you will use? Let's say that you have a company
that extracts the raw materials, one that manufactures
the product, a distributor, the wholesaler, and the
retailer who directly interacts with consumers. Many
companies have figured out that they can cut their prices
to consumers by combining two or more of these channel
activities. Cutting the middleman, therefore, a
fast-growing concept known as vertical marketing, has
become dominant in consumer marketing, serving as much as
64 percent of the total market (Kotler; Armstrong 402).
By combining these stages, you can undercut the
competition, which is one way to gain support from the
consumer. Demographic analysis, also, is important when
determining the channel to use for your business. The
population of the area of your business has to be able to
support your business, the reason that you don't see big
establishments in small towns (they start small and grow
as the population grows). The same thing applies to the
economic environment. The natural environment is directly
affected by the actual transportation of your product.
Trucks, for instance, that transport goods across the
country emit a high level of pollution. But, carefully
designing a business' distribution method through
technological advances can reduce environ-mental harm.
Technology can cut down on costs of distribution as well.
For instance, UPS and Federal Express have systems that
can map out the most direct and efficient paths for
transportation, dramatically decreasing the costs and
time of distribution. Whether in the trucking, boating,
or air carrier industry, you will also have to abide by
all governmental rules and regulations. Consumers have
become accustomed to buying what they want when they want
it. It goes without saying that if you are unable to get
your product to consumers, they will take their business
elsewhere. All of the costs of distribution have an
immediate relation with your product's price.
Yet, it is in the pricing mix that you face your most
subjective decisions. Regardless of how successfully you
have mastered the other mixes, if your price is too high
or too low, your product will not sell. Too much
competition means that outrageous prices will doom a
product. On the other hand, if you sell your product too
cheaply, consumers begin to think that it is a pile of
junk that may not work. Your pricing, moreover, depends
directly on your target market. When analyzing your
target market, you should come up with an average income
figure to help you price your product. Competitors'
prices also have a bearing on determining your price, as
does the cost for producing, distributing, and promoting
the product. Discounts and specials may similarly have an
impact on pricing. Department stores, as an example,
sometimes mark up their prices just before they "slash"
them for their big sale. Of course, every company wants
to maximize its profits by selling its product at the
highest price it can without losing business. Average
income and population therefore must be analyzed before
you attempt to price your goods. To put it another way,
you cannot hope to sell designer clothes or expensive
furniture in a low income area. And, on the other hand,
discount stores don¹t do well in high income
neighborhoods. Again, consumers don't have to have just
the desire to buy; they have to have the means and the
willingness to pay the price before they will purchase
anything. Thus, in the efforts to conserve the natural
environment, you may have to increase the price of your
product even though, with the technology that we possess,
a business can try to cancel the inflation that
conservation can create. The political and legal
environment can also cause inflation in the costs of
production and promotion, costs that can be passed
directly to the consumer through final pricing. Then too,
there are increased taxes on certain types of products.
As an example, why are cigarettes expensive? For one
thing, consumers are not slowing down their consumption
because of inflated prices, and advertising costs
continue to rise. If the culture is accustomed to
spending a certain amount for a particular product, the
price of your product has to be comparable, or you must
offer a good reason for not being comparable. Although
every procedure goes into pricing decisions, through a
total analysis of your business, your costs, and your
target market, you can establish a price to maximize your
profits.
Clearly then, the marketing mix is a highly complex web,
influenced significantly by the environments.
Demographic, economic, natural, technological, political
and legal, and cultural environments are changing with
the passage of time, and the strategies of marketing have
to change with them. In developing a product, businesses
have to evaluate their product, promotion, distribution,
and pricing strategies, realizing that the relationship
between the mixes and the environments often overlap.
With a complete assessment of your product, you will be
able to produce and promote in the most efficient way to
a target market a product that consumers will
purchase.
Work Cited
Kotler, Philip, and Gary Armstrong. Principles
of Marketing. New Jersey: Prentice-Hall, 1994.
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