Dealing with internal and external constraints that may hamper marketing activities

 

-One of the marketing objectives is dealing with internal and external constraints, such as taxes on import and export of particular goods. E.g. it needs to make sure that even though they need to pay some taxes in order to export some goods into the other country, it doesn’t affect the price for their products. This helps to standardize the business, its service, quality, and price for their products equally in every country, to which they are planning to export their products.

For other businesses corporate image and being environmentally friendly are also very important objectives. There are some examples of businesses, which suffered from external constraints and whose marketing activities were hampered by different pressure groups. One of the examples of these businesses is ‘Mc Donald’s’, which suffered a lot from the external constraints, and gained a bad reputation for selling ‘fast food’ products. Recently ‘Mc Donald’s’, which is one of the biggest fast food producers in the world apart from ‘KFC’ and ‘Burger King’, suffered from the Health Department. It carried out its own research, which was basically blaming ‘Mc Donald’s’ for producing low quality food, which causes obesity, and cancer of cells if it their foods on a daily basis. They found big quantities of saturated fats and salts in their products, which was well higher than normal daily allowance. After this, ‘Mc Donald’s’ decided to bring back its good reputation by introducing salads, yoghurts and small bottles of juice in their restaurants. ‘Mc Donald’s’ was also required to describe on the back side of every burger package, what it consists of. But after the research published some other companies and ‘Mc Donald’s’ main competitors started to do new researches and sue ‘Mc Donald’s’ for their foods can potentially do to its customers. From what it is evident today, one of the Mc Donald’s restaurants has already closed in town near my school and there were other three closed in Birmingham. However, Mc Donald’s is trying to diversify into the other fast food markets in the foreign countries, like: Russia, Spain, Germany and etc. They still have their restaurants in these countries and are now very careful about the products they produce and also do some researches, in order to disapprove that their products are unhealthy.

-The importance of this example is, that it shows how dramatically external influences can affect the whole market and certain businesses. Internal and external influences not only affect the reputation and image of the company, but its revenues and profits, which has dramatic effect on the growth of the company.

However, not only external constraints affect marketing activities of the businesses. Internal constraints also affect business activities and may happen within the company. Foe example, there may be some workers in the company who don’t like their pay. Sometimes they start encouraging other people to complain about the pay asking to either increase their pay or they will make a petition. If the company cannot cope with such situations, these internal constraints might make other people who are satisfied with their pay, demotivated and decrease productivity of the company.

 

 

Market segmentation:

 

Market identifies needs and wants of the customer, but market segmentation helps to analyse different parts of a market. It allows to identify needs and wants of specific groups of people. Usually in market segmentation is affected by the main seven factors, which are going to be described bellow:

 

1) Income - it helps to decide whether the product will be concentrated on the high, middle or low class of people. For example, if the company decides to sell luxury yachts, it is aiming at the people with high incomes, who are willing and prepared a lot of money on buying certain products. At the same time, there are some clothes shops, like TESCO, which sell very good clothes, but their products are aimed at low middle and low class of people.

2) Socio-economic class -is when the business segments its market and the products they make, according to the kind of jobs their potential customers have and according to their job pay: A -Barrister

2-Lawyer

C1- Office worker/ manager

C2 -Skille manual

D- Unskilled

E -Unemployed

 

Sometimes, according to the socio-economic class, businesses decide where to locate their shops. For example, it won’t be very appropriate to open an exclusive car store in Africa, because most people in this country are less likely to buy luxury cars. Boutiques locate their shops in popular and expansive areas, where people are more likely to spend a lot of money and in the areas where there are people with high incomes.

 

3) Age - shows what is the targeted age for certain products, which business is planning to sell. For example, Apple sells iPods mainly aiming at young age groups (teens, pre-teens). But car or watch producers, like Bentley and Breitling are manly aiming at older people (30-60 years old), who have earned enough money to buy a luxury car or expansive watch. Depending on a consumer’s age, some businesses can find out where to advertise their products and how big their advertising campaign should be.

 

4) Gender - some companies segment their products depending on gender. For example, there’s a diet coke which can be bought by either men and women, but usually men don’t like the word ‘diet’. Some people think it’s a ‘girly’ drink. For this reason Coca-Cola has invented ‘Coke Zero’, which has a slightly different taste and name, but is almost the same and is mainly bought by men. In this case, even the design of can was affected. On the diet coke the word ‘diet’ is written in italics, but on the ‘coke zero’ can the word ‘zero’ is written in normal and big letters.

 

5) Geographical region -shows what regional market the product is aimed at. For example, ‘Walkers’ crisps are mainly being sold in Britain, Ireland and Scotland. ‘Lays’ crisps are basically the same, but have a different name and are being sold in Europe. Some companies, like TESCO sell their products all over the world and are successful in many, but not all countries. Markets are different in all countries, and if the product became successful in one country, it doesn’t necessarily mean, that it will become successful anywhere else.

 

6) Amount of use -shows how some companies market their product according to the estimated demand and the number of potential customers, who are likely to use their services or buy their products. For example, mobile phone operators design tariffs according to how often certain groups of their customers use their mobile service. E.g., sometimes those people who make many calls, are able to send more free SMS messages than those, who don’t make calls very often; or get extra free calling time and etc. Recently in Russia, if you put at least 20 pounds on your mobile phone account, the mobile phone operator would multiply it by 2. If you put 50 pounds, it was multiplied by 3! This was also made, in order to increase the number of their mobile service users.

 

7) Ethnic and life style grouping - helps media to target advertising at particular categories of people. For example, Nestle and Cadbury advertise their products on the ‘Cartoon Network’ and ‘FoxKids’TV channels, because children are watching these channels. And children between the ages of 3-11 are likely to buy or ask their parents to buy their products after watching some cartoon movies. The same method is also used for the older group of people. For example, when you watch ‘Top Gear’, during the breaks they always advertise some cars, car services or products like oil and petrol which can be used in cars. This makes advertising very effective, because there’s only a certain group of people being affected.

 

There are also different types of markets. For example, in Mass Market, businesses develop

a product, which can be suitable for every one. They also segment and design, advertise, price

and sell them in a different way for different groups of people, but generally the products they

sell are very similar.

However, there is also a Niche Market. In niche market, businesses are concentrated at

producing products only for one particular group of people, without trying to target other groups.

For example ‘Zegna’ produces clothing only for men in the high category, without trying to sell

anything for women, children or anything for a lower class.