Social And Technological Factors Marketing Essay

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Chief Burger & Pizza is one the best fast food restaurant in Peshawar. It offers a great variety in its menu from burgers, pizza fries Chinese etc. Chief is one of the oldest fast food restaurants in the city and with the passage of time they have greatly increased their standard of products as well as quality of service. It is located in the heart of the city Peshawar. Chief's mission is to provide their customers with high quality and hygienic food with good care and service.

Give a general explanation of Porter's Five Forces Analysis (Pass)

PEST Analysis

Political, Economical, Social and Technological factors also affect the company as a whole. If the Political or Economical condition of the country is not strong, this can affect the business as well.

Political Factors

Politics affects the business a lot; because a company must follow certain rules or regulations (laws) made by the government. Creation of different laws depends upon the ruling political party. For example, the end of Cold War has been a big change for weapon makers. Moreover Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:

Tax policy

Employment laws

Environmental regulations

Trade restrictions and tariffs

Political stability

Economic Factors

The economic condition of the country and state has a great influence on the company progression. The different economic policies, which affect business, are


Interest rates

Currency rate

Public economic condition (either people are poor or rich)

Inflation rate

Social Factors

Social values, beliefs, religion and culture really affect the business. Business must be according to social aspects. For example, in Pakistan we cannot sale or purchase things like wine, because it is against Islamic faith. Another example is of wearing shorts by the women. Here it is unsocial, so we cannot start the business of selling shorts to women. Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer needs and the size of potential markets. Some social factors include:

Health consciousness

Population growth rate

Age distribution

Career attitudes

Emphasis on safety

Technological Factors

The most challenging factor for marketing manager is technological factor, because growth of the company depends upon the "innovation" and for innovation, the use of new technology is very much important. In order to beat the competitors, an organization must have effective research, planning and marketing of new products and for this purpose new machinery, techniques and ideas are very much important Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include:

R&D activity


Technology incentives

Rate of technological change

Porter's Five Forces

The pure competition model does not present a viable tool to assess an industry. Porter's Five Forces attempts to realistically assess potential levels of profitability, opportunity and risk based on five key factors within an industry. This model may be used as a tool to better develop a strategic advantage over competing firms within an industry in a competitive and healthy environment. It identifies five forces that determine the long-run profitability of a market or market segment

Power of suppliers

An industry that produces goods requires raw materials. This leads to buyer-supplier relationships between the industry and the firms that provide the raw materials. Depending on where the power lies, suppliers may be able to exert an influence on the producing industry. They may be able to dictate price and influence availability. A segment is unattractive when an organization's suppliers have the ability to:

Increase prices without suffering from a decrease in volume

Reduce the quantity supplied

Organize in a formal or informal manner

Compete in an environment with relatively few substitutes

Provide a product/material that is a critical part of the end product or service

Impose switching costs on their customers when they depart

Integrate downstream by purchasing or controlling the distribution channels.

Power of buyers

The power of buyers describes the impact customers have on an industry. When buyer power is strong, the relationship to the producing industry becomes closer to what economists term a monopsony. A Monopsony is a market where there are many suppliers and one buyer. Under these market conditions, the buyer has the most influence in determining the price. The bargaining power of buyers increases when they have the ability to:

Be "organized" in some form with others providing similar products and services

Purchase a product that represents a significant fraction of the buyer's costs

Buy a product that is undifferentiated

Incur low switching costs when they change vendors

Be price sensitive, with other options available

Integrate upstream, to purchase the providers of the goods.

Barriers to entry/exit

The possibility of new firms entering the industry impacts competition. A key is to assess how easy it is for a new player to enter an industry. The most attractive segment has high entry barriers and low exit barriers. The definable characteristics of each industry protect profitable areas for firms and inhibit additional rivals from entering the market. These inhibitive characteristics are referred to as barriers to entry.

Barriers to entry are unique characteristics to each industry. They reduce the rate of entry of new firms and, therefore, maintain a level of profits for current industry competitors. Barriers to entry can be created or exploited to enhance a firm's competitive advantage. Barriers to exit work similarly to barriers to entry, Exit barriers limit the ability of a firm to leave the market and can exacerbate rivalry unable to leave the industry, a firm must compete.

Substitute products

Porter's Five Forces model refers to "substitute products" as those products that are available in other industries that meet an identical or similar need for the end user. As more substitutes become available and affordable, the demand becomes more elastic since customers have more alternatives. Substitute products may limit the ability of firms within an industry to raise prices and improve margins.


Firms strive to secure a competitive advantage over their rivals. The intensity of rivalry varies within each industry and these differences can be important in the development of strategy. For example, the intensity of rivalry is increased by the following industry characteristics:

Numerous competitors that are particularly strong or aggressive that are competing for the same customers and resources

Declining sales revenues and volumes resulting in slow market growth, creating the need to actively fight for market share

High fixed costs result in an economy of scale effect

High storage costs or highly perishable products

Plant capacity is being added, over and above what is needed to meet demand

Low switching costs for buyers

Low levels of product differentiation

Strategic stakes are high when a firm is losing market position or has potential for great gains

High exit barriers place a significant cost on abandoning the product.

Discuss and Propose Segmentation Criteria to be used for any of two products of the above company in different markets (Pass)


Thus segmentation consists of taking the total heterogeneous market for a product and dividing into several sub-markets or segments. Routine example of mousetrap segmented according to rural and urban areas. Income category and need based segmentation.

Advantages of Segmentation

Allows a marketer to take heterogeneous market, consisting of customers with diverse needs, wants and behavior

It also helps in better understanding of the competitive situation in each of the segment. It not only helps in identification of customers with substantial similarity but also helps in profiling them and their need structure so that the marketer can develop an appropriate

Bases for segmentation in consumer market

Consumer market can be segmented on the following customer characteristics

Geographic Segmentation.

Demographic Segmentation.

Psychographic Segmentation.

Behaviouralistic Segmentation.

Geographic Segmentation: - Potential customers are in a local, state, regional or national marketplace segment. If a firm selling a product such as farm equipment, geographic location will remain a major factor in segmenting your target markets since their customers are located in particular rural areas. While for retail store, geographic location of the store is one of the most important considerations, in this case city areas are preferred. Segmentation of customers based on geographic factors are:-

Region: - Segmentation by continent / country / state / district / city.

Size: - Segmentation on the basis of size of a metropolitan area as per its population size.

Population density: - Segmentation on the basis of population density such as urban / sub-urban / rural etc.

Climate: - Segmentation as per climatic condition or weather.

Demographic Segmentation: - Segmentation of customers based on demographic factors are:-

Age (dominant factor):-Segmentation is done on the basis of age of person. Example Titan has segmented its product according to different age group of person.

Income (dominant factor):-Segmentation is done on the basis of income level of a person.

Purchasing power (dominant factor):- Segmentation has done on the basis of purchasing power of the customer.

Psychographic Segmentation: - Psychographic Segmentation groups customers according to their life-style and buying psychology. Many businesses offer products based on the attitudes, beliefs and emotions of their target market. The desire for status, enhanced appearance and more money are examples of psychographic variables. They are the factors that influence your customers' purchasing decision. A seller of luxury items would appeal to an individual's desire for status symbols Psychographic Segmentation includes variables such as:-






Activities, Interests, and Opinions (AIO) surveys are one tool of measuring lifestyle.

Behaviouralistic Segmentation: - Markets can be segmented on the basis of buyer behavior as well. Since all Segmentation is in a way related to buyer behavior, one might be tempted to ask why buyer behavior-based segmentation should be a separate method. It is because there is some distinction between buyer's characteristics that are reflected by their geographic, demographic and psychographic profiles, and their buying behavior. Marketers often find practical benefit in using buying behaviour as a separate segmentation base in addition to bases like geographic, demographics, and psychographics.

The primary idea in buyer behavior segmentation is that different customer groups expect different benefits from the same product and accordingly, they will be different in their motives in owing it and their behavior in buying it. Variables of buyer behavior are:-

Benefit sought: - Quality / economy / service / look etc of the product.

Usage rate: - Heavy user / moderate user / light user of a product.

User status: - Regular / potential / first time user / irregular /occasional.

Brand Loyalty: - Hard core loyal / split loyal / shifting / switches.

Readiness to buy.

Occasion: - Holidays and occasion stimulate customer to purchase products.

Attitude toward offering: - Enthusiastic / positive attitude / negative attitude / indifferent / hostile.

CHIEF Burger & Pizza

Chief Burger & Pizza is one the best fast food restaurant in Peshawar. It offers a great variety in its menu from burgers, pizza fries Chinese etc. Chief is one of the oldest fast food restaurants in the city and with the passage of time they have greatly increased their standard of products as well as quality of service. It is located in the heart of the city Peshawar. Chief's mission is to provide their customers with high quality and hygienic food with good care and service.

Segmentation Criteria for products in different Markets

The market segmentation is the process by which market are split in two or more segment and target it on specific group of peoples whether on locality, Gender vise, or target youth, so before going to segments the market we should keep in mind that which market we are going to target and will the target market would like our product or not.

For Further explanation we take it as two markets A & B.

Market A:

In market (A) we will target those people who have high income or business class customers. Segmentation for these customers will be different. Because we have studied different criteria's but we have segmented on the basis of income level. In this segment people are willing to pay high prices for product. In this segment people are more conscious about the price their perception is that if the price is high and they are paying it so this is related to their standard. If a product is of low price they don't even look at that product. People in this segment are status conscious.

Market B:

In market (B) we are targeting people whose income level is low comparatively. Now similar to the above discussion segmentation criteria is different in this segment. Now people have low income level so they are very price conscious. They cannot pay high prices so quality is not the issue for them. They will buy those products which have low prices. Companies will make such products for these customers which are of low price.

Market Segmentation in Chief

"Market segment: a market segment consists of a group of customers who share similar set of wants".

Chief has done its market segmentation demographically, psycho graphically and behaviorally which are discussed one by one below:

Demographic Segmentation:

Chief has divided the market on different variables like income, occupation, race, generation and social class. It usually targets those customers of the market those are from middle class (both upper and lower) and also judges their buying power that how much they can spent on the product. They also target the youngsters and kid of the vicinity because kids are in love with fast food especially French fries.

Psychographic Segmentation:

Chief has also done segmentation according to lifestyles, personality or values of their customers that what type of lifestyle people have and how much they are interested in their products.

Behavioral Segmentation:

The organization has also made segmentation according to behavior of their customers, how much knowledge their customers have about their products and how they react to their products means how much they are in touch with chief's products and how much they know about their products and facilities.

The major need the organization is trying to cater is need of appetite which is the basic need of any human being and "they offer products that have appeal to all ages and tastes including the sizzling steak, Chicken cheese burger, special chief pizza and chicken chowmein to name a few."

"Chief continually strives to develop products that are innovative, price competitive and offer maximum enjoyment and convenience to customers."

Discuss any two factors which influence the choice of targeting strategy (Pass)

There was a time when finding the best customers were like throwing darts in the dark. Target marketing changed all that...Today's savvy marketers know that finding their best prospects and customers hinges on well thought out targeted marketing strategies.

Defining a target market requires market segmentation, the process of pulling apart the entire market as a whole and separating it into manageable, disparate units based on demographics. Target market is a business term meaning the market segment to which a particular good or service is marketed. It is mainly defined by age, gender, geography, socio-economic grouping, or any other combination of demographics. It is generally studied and mapped by an organization through lists and reports containing demographic information that may have an effect on the marketing of key products or services.

Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. Target marketing can be the key to a small business's success. The beauty of target marketing is that it makes the promotion, pricing and distribution of your products and/or services easier and more cost-effective. Target marketing provides a focus to all of your marketing activities.

Market targeting simply means choosing one's target market so it needs to be clarified at the onset that marketing targeting is not synonymous with market segmentation, Segmentation is actually the prelude to target market selection. One has to carry out several tasks beside segmentation before choosing the target market.

Through segmentation, a firm divides the market into many segments. But all these segments need not form its target market. Target market signifies only those segments that it wants to adopt as its market. A selection is thus involved in it.

Target marketing tailors a marketing mix for one or more segments identified by market segmentation. Target marketing contrasts with mass marketing, which offers a single product to the entire market.

Two important factors to consider when selecting a target market segment are the attractiveness of the segment and the fit between the segment and the firm's objectives, resources, and capabilities.

Attractiveness of a Market Segment

The following are some examples of aspects that should be considered when evaluating the attractiveness of a market segment:

Size of the segment (number of customers and/or number of units).

Growth rate of the segment.

Competition in the segment.

Brand loyalty of existing customers in the segment.

Attainable market share given promotional budget and competitors' expenditures.

Required market share to break even.

Sales potential for the firm in the segment.

Expected profit margins in the segment.

Market research and analysis is instrumental in obtaining this information. For example, buyer intentions, sales force estimates, test marketing, and statistical demand analysis are useful for determining sales potential. The impact of applicable micro-environmental and macro-environmental variables on the market segment should be considered.

Note that larger segments are not necessarily the most profitable to target since they likely will have more competition. It may be more profitable to serve one or more smaller segments that have little competition. On the other hand, if the firm can develop a competitive advantage, for example, via patent protection, it may find it profitable to pursue a larger market segment.

Suitability of Market Segments to the Firm

Market segments also should be evaluated according to how they fit the firm's objectives, resources, and capabilities. Some aspects of fit include:

Whether the firm can offer superior value to the customers in the segment

The impact of serving the segment on the firm's image

Access to distribution channels required to serve the segment

The firm's resources vs. capital investment required to serve the segment

The better the firm's fit to a market segment and the more attractive the market segment, the greater the profit potential to the firm.


There are several different target-market strategies that may be followed. Targeting strategies usually can be categorized as one of the following:

Single-segment strategy - Also known as a concentrated strategy. One market segment (not the entire market) is served with one marketing mix. A single-segment approach often is the strategy of choice for smaller companies with limited resources.

Selective specialization- This is a multiple-segment strategy, also known as a differentiated strategy. Different marketing mixes are offered to different segments. The product itself may or may not be different - in many cases only the promotional message or distribution channels vary.

Product specialization- The firm specializes in a particular product and tailors it to different market segments.

Market specialization- The firm specializes in serving a particular market segment and offers that segment an array of different products.

Full market coverage - The firm attempts to serve the entire market. This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment

Discuss how buyer behavior affects marketing activities in different situations in light of the assigned companies (Pass)

It's important to understand buyer's behavior because the service or product is to be according to the needs & demands of the buyers. Looking into the behavior of the buyers what they want from you to produce. The product is for buyers to buy so it should be according to their needs. Now a day's business focus on the buyers needs what they want. They produce the product on buyer's choice. Buyers want product according to their needs. In late 90,s businesses just produced product & their approach was to just sell that product at any condition whether it suits buyers or not. But the trend is change now business make product what their buyers tell them to produce. It's very important to keep the buyers attracted towards your product giving them more customer satisfaction. We should also keep in mind about the buyers awareness, competitive advantage, what they buy, when they buy .Taking care of buyer behavior is a good example of how your business image is created in the mind of the buyers.

Marketing is based on the principle of customer satisfaction. This is the foundation for the environmental marketing approach of Chief. Environmental product claims in advertising, promotional material and on packaging are in accordance with legal requirements, based on solid scientific evidence and used in a serious and reasonable manner. Their aim is to minimize wastage in communication, publicity and promotional material, in particular through more precise targeting of marketing activities. Consumer promotions and merchandising material such as consumer offers, in store promotions, display material, leaflets, printed matter, etc. take environmental aspects into account. This means due consideration of environmental impact in selecting both materials and printing methods.