The Influence of Socio Cultural Environment
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 3106 words||✅ Published: 16th Aug 2021|
The term market is the root word for the word marketing. Market refers to the location where exchanges between buyers and sellers occur.(Marketing Specialists) A simplest definition has been provided by Philips Kotler, he defines marketing as Marketing is Managing Profitable Customer Relation (Kotler 2009).
The concept of marking isnt new to the business, as the concept has been derived from the market; people have been engaged in marketing in one way or another inside a market setup since the evolution of markets.
American Marketing Association defines marketing as, Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (AMA 2007).
Marketing concept at large relates to a process of different integrated efforts made by the business to satisfy the needs and wants of the customer by creating value in the mind of the customer resulting to a profitable relation.
Customer value or customer value proportion is the most important concept of marketing as all efforts are made by organization these days are increase the value of their product/services in the customers mind. The concept of customer value is simple.
Customer value = Product Cost – product benefits
The basic concept of Marketing starts with the idea of meeting the needs and wants of the market. Needs are the basic requirements of customers. Needs can further be translated into wants, as for an instance we can take an example of human feeling of thirst, that is the a need has to be fulfilled in order to stay alive, so to fulfil that need we can have different option starting with tap water, bottled water, a soft drink or may be a water melon.
Human beings have different needs that can be classified in to 3 classes:
Physical needs are the basic needs that are required for the survival for example food, water, sunlight, clothing and safety. Social needs include desire for belonging and affection. Individual needs revolve around aspirations for understanding, knowledge and self-expression, through items such as clothing choices. Wants are needs that are shaped up by society and its culture. Wants are basically the goods and services that satisfy anyone’s need and these are continuously changing with changing environment. For example, two decades back, people wanted phone just for communication purposes then they wanted a mobile phone but these days technology has so much influenced them that they want a mobile phone with camera, Bluetooth, 3gs and other innovative features. Therefore, the purpose of marketing is to provide such goods and services that convert these needs into wants for those specific products.
Consumers buy products that they believe that will best meet their needs, this believe can be because of the earlier use of the produce which shows the customer retention side of marketing that believes in building a profitable everlasting relationship with the customer which will only result from the value resulting from the exchange process. The vary first step in the exchange process is to provide a product that can be tangible or intangible, and can be further divided in to a number of forms such as goods, ideas, and services. All products are produced to satisfy the needs, wants, and the demands of individual buyers.
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Therefor the second step in exchange is the satisfaction. For an Exchange to occurs an individual receives a product from a seller in return for something called consideration (something of value). In our times the Consideration is represented by currency. For an exchange to take place there must be two parties interested in exchanging something of value against something of value. This process is known as transaction. Transaction therefore occurs when there is an exchange of value occurs between two parties. A transaction refers to a unit of measurement in marketing. The earliest form of such exchange was referred to as barter.
Knowing about the markets is important, businesses also needs to know about the market, as different customers have different preferences, for example not all of us like or buy the same music, books or the same food. So businesses needs some way to group people with similar need or wants togather. This grouping is called segmentation. (market analysis. 2008).
Businesses in order to better manage the marketing effort and to satisfy the needs and wants of customers, many companies place the consumers into groups such groups where the potential customers are categorized based on different needs, characteristics, or behaviors. Market segments are evaluated as on the basis of attractiveness or potential for generating revenue for the firm. There are Four basic factors taken in to account to determine the potential of a particular market segment. For an effective segment, it has to be measurable, accessible, substantial, and actionable. Measurability is measuring the market segment’s size and its purchasing power. Accessibility refers to the degree to which a market segment can be accessed and served. Substantiality refers to the size of the segment in term of potential for generating profit for the firm. Action ability refers to the degree to which a firm can design or develop a product to serve that particular market segment.
Consumer characteristics are the basic factors that affect the decision of segmentation. These characteristics consist of demographic, geographic, psychographic, and behavioral factors that are the basis for segmentation. Demographic segmentation is based on such characteristics as age, gender and occupation. It is considered as the most popular and comparatively easy way to identify potential customers. Geographic segmentation involves classifying consumers according to their location which includes segmentation according to nations, states, regions, cities, or locality. Psychographic segmentation is based on consumers’ activities, interests, and their opinions. Social class, customer lifestyle, or personality characteristics are psychographic factors used to segment consumers into various groups. In behavioral segmentation, marketers categorize consumers on the basis of their attitudes, uses, or responses to a product.
Once the potential market has been segmented, firms need to position their products relative to similar products of competitors. This process is called product positioning. Market positioning is the process of arranging a product so as to engage the minds of target consumers by placing a differentiating image in the mind of the consumer, by explaining what value your product has and what additional features it has thus making its feature and functions look better and different from the competitors product.(steven R, 2008) The position of a product in the marketplace should be clear, distinctive, and desirable compared to those of its competitors in order for it to be effective.
Once a positioning strategy has been determined, businesses seek to control the four basic elements of the marketing mix: product, price, place, and promotion, known as the four P’s of marketing. Since these four variables are controllable, the best mix of these elements helps to position the product in the right segment with the right value in the minds of the selected target market consumers.
The socio-cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors. Socio-cultural forces usually influence the welfare of a business firm in the long-run. With ever changing society the New demands are created and old ones are lost in due course. Thus necessary adjustmetns are to made in the marketing plan to meet the need need/wants of the target market. The socio-cultural factors that contribute to a change are:
- Cultural Influences
- Environmental issues
- Animal Welfare
- Social influences
Social and cultural factors influence all aspects of consumer and buyer behavior. The difference between these factors in different parts of the world can be a central consideration in developing and implanting international marketing strategies. Social and cultural forces are often linked together whilst meaningful distinctions between social and cultural factors can be made in many ways by the way the two interact and the distinction between the various factors is not clear cut. Differences in languages can alter the intended meaning of a promotional campaign and differences in the way a culture organizes itself socially may affect the way a product is positioned in the market and the benefits a consumer may seek from that product.
A sewing machine in one culture may be seen as a useful hobby but in another culture a sewing machine may be necessary to the survival of a family.
Kotler (2003) included such things as reference groups, family roles and status within social factors. Whilst this is a useful distinction from the broader forces of culture, social class and social factors are clearly influenced by cultural factors. Take the example of the family which is an important medium of transmitting cultural values. Children learn about their society and culture through many means but the family influence is strong particularly during the early years of a Child’s life. Moreover, the arrangement of family life varies considerably from one culture to another.
Influence of socio-cultural environment on marketing
Demographics should be an essential element of marketing. However, in today’s media too much marketing attention is given to the younger age groups. The concentration in this area places the organizations they represent in a situation of missing out on some of the most affluent consumer demographics, namely those who are 45 plus.
Whilst it is important for an organization to target a demographic market if it has products dedicated to that group, the marketer also needs to bear in mind where the concentration of disposable income is and, in addition, the size of other consumer demographic segments. For example, a significant proportion of individuals over the age of 50 can be the key deciders of spendings.
In context to socio cultural environment, we have number of different factors that affect marketing and cause periodical change in marketing techniques. We will discuss here some of them which have the major influence.
Demographics include those characteristics of a human population which are used in government, marketing or opinion research. Marketing researchers should typically have two objectives in this regard: first to determine what segments or subgroups exist in the overall population; and secondly to create a clear and complete picture of the characteristics of a typical member of each of these segments. These segments help to develop a marketing plan the most important types of demographics in marketing are age, gender, income level, occupation, race and ethnicity.
Let’s have an example to understand the importance of demographic profile
If we talk about Nokia mobile phones, the market plan of the brand is based on different factors; one is income level of people. Age is another factor which tended to introduce energy drinks for children and youngsters. Some products are gender specified. Some other products are specific to family size. So there is need of a marketer to consider all these factors to plan a successful market strategy.
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Culture represents the living style of the people of a specific area, the buying behavior, the taste, the class of people to which they belong; the psychographics and the aesthetics of the population. Cultural changes account for people’s core beliefs or values. People’s view of themselves, others, society, organizations, nature, and the universe all play a part in shaping one’s culture as well as influences his behavior. Companies need to consider these factors while working in the market place. When a company decides to launch a product, it must keep in mind what is the product and what the target population should be. Target population is chosen on the basis of these cultural influences as well as their demographic impact. A company must know whether it is going to launch the product for middle class or elite class? Whether such kind of products is already running in the market? What is the taste of people? What is their purchasing behavior? Whether they can be regular customer or not? A lot of such questions should be satisfied first and these all are necessary to launch a successful product.
For example, if we consider a daily product like shampoo; we see Dove, Pantene, Head & Shoulder, Sun Silk, Life buoy, etc all these are shampoos but made for different categories of customers. Dove and Pantene for elite class, H & S and Sun silk for middle class and life buoy for lower class. Different tea brands hit different classes. Education is also a variable for shaping up decision making process. For example, a black berry mobile phone is useless for an illiterate person. So a marketer must keep in mind the cultural factor to adopt a wise market plan.
Environmental issues play an important role in the marketing of an organization. For a multinational these factors have more influence on the marketing as for an instance we take a refrigerator that has been marketed in the UK where the wether is not that hot as compared to the weather in UAE so if the the company launches the same product in the new market the product will fail as the defrost system that work in the UK will fail to operate in UAE.
Economic factors have always influenced consumer purchasing. From the time of the “Great Depression” to the recent time, America has seen how radically the economy can be affected. It is important for companies to devise strategies in accordance with the economic trends to save themselves from losses. For multinational companies it is crucial to consider economic conditions of a country where it is going to sell its product. And in a local market, a seller must know the income level, inflation rate, purchasing power of the people, etc so that he can make a suitable product for sale.
Government and Political Factors
The Political environment consists of laws, regulations, and government policies that may influence or limit various companies or organizations in the market. The government regulates markets by putting limits on companies which ensures that we have a free and fair market. Where all the products provide good value for money and also government legislations imposes different type of rules and regulations for the business to market and position their product. For example Animal Welfare
For a long time legislation has been the commonest way of protecting farm animal welfare but more recently growing consumer demand both for quality food products and more ethical food production has meant that farm animal welfare is emerging as an area of potential added value for producers, retailers and other food chain actors. (Welfare Quality)
New technology creates new markets and new opportunities for businesses. It is important for all businesses, whether old or new, to have state of the art technology. Companies that do not adapt soon there products become obsolete. New technology as cited in Develop Vision and Strategy (n.d.) can change the demand for a product, render current manufacturing processes obsolete, and reduce costs to undercut competitors, produce new products and a host of other possibilities. (James Neblett)
Population can he divided in to groups on the basis of similar hobbies opinions and activities, population in the UK can be subdivided into to two groups depending on the lifestyles; there is a group that has an attractive lifestyle and the other that is striving to fit in.
So the differences in social class can create customer groups. In fact, the official six social classes in the UK are commonly used to foresee different customer behavior. In the UK’s socioeconomic classification scheme, social class is not just determined by income. It is measured as a combination of occupation, income, education, wealth and other variables,
Marketing has to track down any changes in the need and wants of the groups which may point to decrease or increase in demand for a new product, this concept leads to product innovation for example a cultural change towards greater concern for health and fitness has created new opportunities for low calorie foods, exercise equipment and health clubs.
From the above analysis, it can be realized that the impact of socio cultural elements is so strong that a marketer cannot pass by it. The deeper he takes interest in these factors, the better the market plan will be. Marketer needs to determine those demographic, geographic and other macro environment factors that influence his product and should incorporate these while devising strategies. No strategy can be successful and long-term if these factors are ignored. Similarly, the other marketing mix elements like pricing, distribution, after sale service, etc also needs to be based on these socio-cultural factors. An important fact is that seller not only needs to market his products but also to sustain it in market. For sustaining in market, seller and marketer should be up-to-date with the changing environment and should adapt accordingly. All the effort is for the customers, then why not it be the products of customer choice which can be made possible only by knowing the customer in a better way.
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