| Environmental Factors Essay Good thesis writing Essay done for you
There are factors that affect firms marketing decisions. The firm can control effectively some of these factors. The factors that a firm can control are internal and constitute the firms microenvironment. On the other hand, there is a large number of factors that significantly affect the decisions and the operations of the firm externally. The firm does lack control over these factors and sometimes aligns itself with them. These are external factors and they constitute the business macro environment. The most prominent external factors are competition, technology, social issues, economic issues and legal or regulatory issues (Wheelen, 2006).
The five factors act at both domestic, as well as global level; the effects of globalization make a firm be exposed to various issues at the global level. For instance, it is possible for a firm in one country to experience competition from other firms situated in different parts of the globe. Furthermore, a technological advance in one part of the globe has direct effects on the various firms across the globe (Maidment, 2007).
Various factors in the macroenvironment of a firm do not act singly but in relation to other factors. Issues such as economic interdependence influence the social, economic, regulatory, technological and competitive factors of the environment of a firm. Firms consider all the external factors as well as other related factors while making marketing decisions (Maidment, 2007).
Specialization caused economic interdependence; specialization in the economy of the world has made the demand of the various products and services be interlinked. This has also brought about a great interconnection of firms and various factors in their environment. This interconnection has been partly brought about by external factors, and it has been extremely instrumental in the marketing decisions that are undertaken by various firms. Today many firms in the preparation of their marketing mixes are taking a direction that will align them appropriately and put them in a strategic location, to take advantage of the globally interlinked system of factors in the global economy.
Trade agreements have varying effects on firms, although these agreements mostly occur between states. One of the benefits that have accrued from these agreements includes free movement on capital and labor. This has served to enhance production of quality products. On the other hand, some firms and states are opposed to trading agreements because of the power imbalances that such agreement would cause. Consequently, these firms and nations have made marketing choices that do not support the trade agreements in their attempts to counter imbalanced trade (Wheelen, 2006).
The environmental factors affecting a firm have an exceptionally close relationship with the demographic aspect and the physical infrastructure. Demographics refer to the properties as well as the various dynamics in a human population. A demographic study of a given population will try to unearth such issues as the age, the races and the level of education attained by various groups among others. Demographically, the world population is hugely diverse; this could also be the case at the local level (Wheelen, 2006). Various firms in making their marketing decision rely tremendously much on the populations demographics.
In marketing a given product meant for a group in the population, the firm will carry out demographic research in the population in which the group is found. The firm may perform this in order to establish the number of people in such group, their income levels, and their preferences among others. Now firms are able to carry out the demographic studies of various groups in the whole world due to globalization.
Infrastructure refers to bridges, roads, railway line among others. These structures are constructed to enhance easy movement of people, goods and information; due to this, physical infrastructure was traditionally particularly crucial in determining transport and communication. During the marketing deliberations, the management of firms deliberates on how the firm will reach the people in order to conduct product promotion; in addition, the firm deliberates on how the consumers will access the product from its outlets. Physical infrastructure is an external factor to a firm and it affects the firms operations at various levels; for this reason it is a crucial factor that influences the firms decision at both domestic and the global level.
Culture refers to the peoples way of life. This is an external factor to the firm as the firm cannot change peoples culture. Marketers know that people will be willing to buy a product only if it is appealing to their culture. Another factor that firms carefully consider while making their decisions relates to the diverse nature of the cultures of consumers. For this reason, marketing managers try to attain the correct mix of internal factors that will be appealing to the culture of the target group.
Various companies have been able to market their products to almost all places of the world despite the difficulty caused by the diverse cultures of the people. Their success in doing this has been occasioned by their effort to design products and their promotion campaign in line with each groups culture.
Marketing cannot be described wholly as various processes taken by firms in order to sell their products and services; rather, marketing should be understood in a way that encompasses all the steps involved in satisfying the needs of the society holistically. Society expects more than only goods and services from firms; an example of needs that society has includes a clean environment, reduced pollution among others. For needs of the society to be fully satisfied, firms need to take some of these processes as social responsibilities. For instance, a firm may take an initiative to plant trees as a social responsibility. If firms take the initiative of taking social responsibility, this will contribute to a healthy living environment for people and create a strong public relations at the same time.
In conclusion, firms should device ways of marketing that would leave the consumers feeling respected. There is an expected way in which all the parties relating to a company should be treated. Strict adherence to these expectations will make the firm run smoothly in its environment. The understanding of this greatly affects the way firms make decisions as most of them try to align themselves with this general rule.