marketing

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The Factors Affecting Marketing Marketing Essay

Marketing is the activity and set of processes for creating, communicating, delivering and exchanging offerings which have value for customers, clients and partners. It is defined as the process of determining the needs and wants of consumers and being able to deliver products that satisfy those needs and wants. Marketing includes all activities that are necessary to move a product from the producer to the consumer, an example of marketing is window displays in travel agencies. Thomas Cook changes their window displays quite often as they have many holiday deals to attract their customers, displays have catchy slogans to invite them to find out more about that holiday and reasonable prices including a packaged holiday.

The function of marketing is deciding as a whole what services and products the customer will want and what ways they will be delivered to the customer. It also helps a company to identify successful products for the marketplace and then promote them by separating them from similar products. There are seven main functions of marketing; distribution, selling, financing, market information management, pricing, product and service management and promotion. There are different aims of marketing; to increase awareness of the product or service, to increase market share, to research customer needs, to communicate with different customers and to solve any problems which involves affecting the process of marketing.

Marketing mix is different elements of a product’s marketing plan which an organisation uses to meet their customer’s needs, this is also known as the ‘four Ps’; Product, Price, Place and Promotion. Product refers to physical products and services, the following are some examples of product decisions; brand name, styling, packaging, quality and repairs. Some examples of pricing decisions include; seasonal pricing, price flexibility, price discrimination and cash payment discounts. Distribution which refers to the place is all about getting the products to the customer, here are some examples of distribution decisions; order processing, transportation, distribution centres and channels and inventory management. Promotion represents the various aspects of marketing, its goals is to generate a positive customer response by following decisions which include; sales promotions, advertising, personal selling and public relations and publicity. An example of marketing mix is a new company who is starting up their own company is trying to spend more money on promotion in order to get themselves known, whereas at the same time an established business will need to monitor its prices and if needed they will make changes.

Market segmentation is the process of defining a large market into clear segments by having similar wants, needs and characteristics; it has an objective to design a marketing mix which matches the expectations of customers. Market segmentation can be done in different ways using a combination of methods which include; demographic segmentation, socio-economic segmentation, geographic segmentation and psychographic segmentation. Demographic segmentation is separating your consumers to advertise the groups separately according to gender for example developing holidays for women, age for example designing holidays to meet the needs of the 18 to 30 age group and people over 55, and ethnic grouping. Whereas socio-economic segmentation is based only on occupation which is then advertised by the media to target people in an area. Geographic segmentation is collecting information according to the location of the customer so they know where there products are being sold which increases advertising, an example of this is people living in a particular postcode area could be sent a holiday brochure. Whereas psychographic segmentation categorises there consumers according to motivation, lifestyle and personality types and this can be done by introducing new activity holidays.

Marketing communication methods is part of the marketing mix which extends to all the areas of the organisation; this means the same marketing message can be presented in all areas of marketing through branding to customers and target audience. Marketing communication mechanisms, such as print, radio, television advertising, publicity and online advertising help promote a company's products and services. Using different methods of marketing communication allows the company to reach the widest audience. An example of marketing communication is tour operators such as Thomas Cook who advertise their holidays on-line followed by pictures, prices and activities they include within a destination and they advertise on shop windows to attract more customers to book a holiday within them. Thomas Cook also appears as a pop up if a person is on another website like Facebook in order to sell themselves and make them known.

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There are a variety of factors which influence marketing in the travel and tourism industry, this includes the negative and positive factors which have influenced the marketing decisions. On the next few pages I am going to explain the effect of all the factors and include examples in my answers from travel and tourism companies.

Company Ethos is a company’s’ defined set of beliefs and values which can be articulated in a mission statement, these statements are then advertised on websites and in an office reception area. They are very important as it tells customers what to expect as a product and gives an idea to employees about what the company wants to accomplish. Social responsibility is an organization’s management heading towards the interests of the society in which it operates. Corporate social responsibility (CSR) is the commitment by a business in order to behave ethically and continue to contribute to economic development while improving the quality life of the workforce. Companies which meet their criteria can be listed which specifies to stakeholders that the company has suitable polices for CSR. A CSR strategy is all about managing the way a business deals with issues such as gender and supervising foreign workers, it helps ensure that a business has positive impact on people as well as the environment wherever it operates. The first example of company Ethos is the mission statement of the airline Easyjet which reads “to provide our customers with safe and good value. To offer a consistent and reliable product and fares, appealing to leisure and business markets on a range of European routes.” http://www.slideshare.net/esteewu/easyjet-presentation My second example is Thomas Cook’s stock exchange overall price in December 2012 is £48 and the change is 2.13%.http://www.lse.co.uk/shareprice.asp?shareprice=TCG My third example is British Airways objectives and strategies; they want to become the world’s leading global premium airline and to focus on customer service to help them create a sustainable future for their business. www.britishairways.com/cms/global/microsites/ba_reports0910/our_business/strategy2.html

Consumer protection consists of laws and organizations which are designed to ensure the rights of consumers as well as truthful information in the marketplace. The laws are designed to prevent businesses who engage in fraud from gaining an advantage over competitors, they are a form of government regulation which aim to protect the rights of consumers. Consumer protection ensures that products purchased by consumers are safe to use, will meet all standards, that consumers have adequate information to make safe purchase and that marketers are prevented from using false methods to sell their products. An example of a consumer protection is the Data Protection Act 1998 which gave individuals a right of access to ‘personal data’, this is often collected when a person completes the purchase of a service or good from a company which consists of bank, contact details and any other important information. Personal data must be kept secure and up-to-date; this data can be held either on a computer or in paper files. http://en.wikipedia.org/wiki/Consumer_protection_laws My first example is First Choice which is a tour operator who has regulations to protect the travelling public; they are protected by Air Travel Organisers’ Licence (ATOL). This will not allow customers to lose their money or become stranded. http://www.firstchoice.co.uk/about-us/who-we-are/ My second example is British Airways and its Data Protection Act; they treat all their information as confidential so therefore they protect every customer’s privacy. All personal information will not be passed onto third parties. http://www.bavirtual.co.uk/administration/privacy My third example is Thomas Cook’s codes of practice to the Criminal Records Bureau; they treat all applicants fairly but however to assess applicants for positions of trust. http://www.thomascook.com/thomas-cook-careers/

Standards of practice are an alternative term for code of professional responsibility, an example of this is codes of practice; these are written guidelines issued by a professional association to its members in order to help them obey with its ethical standards. The British Code of Advertising is legal and honest, they value the principles, and they are prepared looking at responsibility within the society and the consumers and are also connected with the Advertising Standards Authority (ASA) who receives responses about rules on advertising. The ASA work includes acting on complaints and checking the media to take action against harmful or offensive advertisements. Their mission is to; be more effective with business’ and consumers, be an effective part of the response to social issues which are affected by advertising and making a success of regulating online advertisements. ASA is an independent body who checks samples of advertisements and work to publish standards of service so therefore they are committed to; resolve complaints without any delays, to deliver a high quality service, to be open about their procedures and the decisions in which they make, meet all their customer’s needs and respect the advertising industry and members of the public. My first example is tour operators such as Virgin Holidays who are subject to legislation in order to ensure the health and safety of their customers on their holiday. My second example is Ryanair’s display advertising which is one of the most effective media formats achieving 82% of messages among the different passengers and overhead locker advertising is visible throughout the flight. http://www.ryanair.com/en/advertise My third example is First Choice sales promotion on their voucher codes which gives a boost to customers especially as they can get discount on their next holiday and money off on summer and winter flights. http://www.vouchercodes.co.uk/firstchoice.co.uk

Political, economic, social and technological are factors that influence businesses, this is described as PEST analysis because the factors involved are categorized into four. PEST analysis helps an organisation to take note of external factors which are affecting its business; they help with the SWOT analysis which identifies threats and opportunities. SWOT analysis evaluates internal factors such as strenghts and weaknesses and internal factors such as opportunities and threats which influences the marketing.

Political factors are related to government policy and administrative practices that can have an effect on something, these factors must be taken into account when considering a political change. These changes could involve employment laws which companies must therefore have respect for. Political factors are how a government interferes in the economy, it include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide and those that the government does not want to provide; www.puremoneymaking.et/pages/strategy_building/mission-vision/elements-of-pest.aspx therefore the governments have great influence on the health, education, and infrastructure of a nation. International relations are an example of a political factor which is the relationship between countries, including the roles of states, organisations and corporations. It is the branch of political science that is concerned with the foreign affairs of and relations among nations, peoples and states. My first example is all tour operators have to be very careful of political incidents especially in all the different destinations they sell to their customers. My second example is the Foreign and Commonwealth Office (FCO) who gives up-to-date information on all safety techniques in the countries located all over the world. My third example is tour operators who can get all their passengers back home if something happens abroad such as an incident and so therefore they make sure that they will be safe out there with given advice.

Economic factors are the resources that can influence a person on their everyday life and is the distribution of services and materials. Economic factors include economic growth, interest rates, exchange rates and the inflation rate; these factors have major impacts on how businesses operate and how they make decisions. www.puremoneymaking.et/pages/strategy_building/mission-vision/elements-of-pest.aspx An example of an economic factor is interest rates, it is the amount charged as a percentage by a lender to a borrower for the use of assets which can include cash and consumer goods. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR). Interest rates is charged or paid for the use of money, it is calculated by dividing the amount of interest by the amount of principal however the rates can change according to the result of inflation. Central banks generally tend to reduce interest rates when they wish to increase investment in the country’s economy; they are taken into account especially when dealing with variables like inflation, investment and unemployment. My first example is passengers travelling on different airlines have to pay air passenger duty only if their aircraft carries ‘chargeable passengers’. http://www.nibusinessinfo.co.uk/content/when-you-must-pay-air-passenger-duty My second example is interest rates in the Bank of England which holds interest rates at 0.5%; the reason they set interest rates is to keep the inflation as low as possible to preserve the value of money. http://www.bankofengland.co.uk/Pages/home.aspx My third example is exchange rates which affect a tour operators pricing strategy, this is because it can increase or lower the price of a product in store or abroad and prices of products from competitors can change. http://www.tutor2u.net/business/gcse/external_environment_economic_exchange_rates.htm

Social factors are the facts that influence individuals’ personality, lifestyle and attitudes which include; the cultural aspects, health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. www.puremoneymaking.et/pages/strategy_building/mission-vision/elements-of-pest.aspx An example of a social factor is ageing population, this occurs when the median age of a country or region increases due to a rise in life expectancy and declining birth rates. Population aging is a shift in the distribution of a country's population towards older ages, this is usually reflected in an increase in the population's mean and median ages, a decline in the proportion of the population composed of children, and a rise in the proportion of the population that is elderly. Population ageing is widespread across the world and is most advanced in the most highly developed countries. http://coolgeography.co.uk/A-Level/AQA/Year%2012/Population/Population%20change/managing%20pop%20change%20new.htm My first example is ageing population in Japan; the elderly population which includes people over the age of 65 years hit a record of 22million. http://news.bbc.co.uk/1/hi/world/asia-pacific/1083097.stm My second example is the media which has a social influence on different cultures especially in America where media such as TV, magazines, movies and news media reflects and creates the culture. http://www.cliffsnotes.com/study_guide/The-Role-and-Influence-of-Mass-Media.topicArticleId-26957,articleId-26946.html My second example is holiday bookings to Madame Tussauds where you have the chance to see celebrity wax figures, the way these celebrities are made are amazing as they look real when you see them face to face. http://www.madametussauds.com/

Technological factors are influences which have an impact on how an organisation operates that are related to the equipment which is used within the organization’s environment. The factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum production level and influence outsourcing decisions and these technological shifts can affect costs, quality, and also lead to innovation. www.puremoneymaking.et/pages/strategy_building/mission-vision/elements-of-pest.aspx An example of a technological factor is the internet which has changed the way customers book their holidays, on-line booking systems are used a great number of times by people for booking holidays as well as hotel accommodation and transport. Travel agents and tour operators are making use of new technologies now and again in order to market their services and products; this allows different companies to market via the internet. Technology has also changed the way that firms market their products, prices, places and promotions. My first example is the internet where now every customer prefers online booking for their holiday, this has affected travel agencies as they receive fewer customers to help book a holiday. My second example is Heathrow Airport and its self check-in scheme where the customer uses a computer to choose their seat and print out their boarding card and then take their baggage to the bag-drop facility. http://www.heathrowairport.com/heathrow-airport-guide/checking-in#selfservice My third example is new technology being brought out which is a good thing as it is benefitting each and every customer to carry out advertising via other companies as well as their websites.

Environmental factors are a restricted element in the physical, cultural, demographic, economic, political, regulatory and technological environment which affects the survival, operations and growth of an organization. www.slideshare.net/Karvee/environmental-factors-business Environmental factors include ecological and environmental aspects such as weather and climate which may affect industries such as tourism, farming and insurance. Therefore growing awareness of the impacts of climate change is affecting how companies operate and the products which they offer. www.puremoneymaking.et/pages/strategy_building/mission-vision/elements-of-pest.aspxAn example of environmental factors is global warming which is an average increase in the temperature of the atmosphere near the Earth’s surface contributing to changes in global climate patterns. Global warming is often referred to the warming which can occur as a result of increased emissions of greenhouse gases from human activities. Another example of an environmental factor is natural disasters, this includes; earthquakes, avalanches, hurricanes, floods, mudslides, tornadoes, tsunamis and volcanic eruptions. My first example is global warming which is a rise in temperature of the earth’s atmosphere and it can be good but if the thermal blanket gets thicker too much heat is kept therefore it is bad. http://news.bbc.co.uk/cbbcnews/hi/find_out/guides/world/global_warming/newsid_1575000/1575457.stm My second example is natural disasters which includes; floods, hurricanes, earthquakes, tornadoes and tsunamis and most of the times they are unexpected and overwhelming. http://www.apa.org/topics/disasters/index.aspx My third example is Boris bikes which are bicycles named after Boris Johnson who is the mayor of London and the prices are as follows; 24 hours costs £2, 7 days will cost £10 and annual costs £90. If the bike is damaged the charge will be up to £300, late return charge will be £150 and non return charge is £300. http://www.tfl.gov.uk/roadusers/cycling/14811.aspx

All the factors which are mentioned above influences decisions on marketing which means companies may have to come to a conclusion to change their old products, change their prices, advertise new campaigns and make changes to marketing communications. Price and competition represent two of the strongest influences on marketing strategy which are classed as internal and external influences. For example, small businesses require direct short-term profits; therefore the marketing strategy introduces a high-performing product to a niche segment of the market before competitors. The business then generates as much profit as possible until competitors introduce a cheaper product and then it moves to launch a new product in a new market. http://smallbusiness.chron.com/influences-marketing-strategy-43431.html


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