Marketing of Groceries - Essay Example

? Marketing Grocery Insert Task Marketing Grocery Marketing of products plays a crucial role in the outcomes of the company’s sales. Several factors affect marketing strategies of the company both directly and indirectly in the marketing environment. The factors can be classified into three forms under marketing environment, internal environment, macro environment, and microenvironment (Schmidt, 2005). This paper will highlight some of the macro and microenvironment factors that affect marketing of grocery. It will also analyze societal marketing concepts that grocers can explore to ensure that they attain better results from the market. Macro-environmental Factors Macro-environmental factors are the environmental factors that affect the marketing strategies of the organization although it has limited chances of manipulating them. They include political-legal, socio-cultural, international and technological factors. The organization can define these factors in terms of scanning for better understanding of all opportunities and threats it may face together with the required strategic devices to adjust so as organization can attain and maintain competitive advantage (Kotler & Armstrong, 2006). Macro-environmental factors originate from outside of the organization and they cannot be changed by the organization’s actions. Specifically an organization can get great challenges when there changes in this factor of environment but the organization itself cannot affect the environment. The diagram indicates the influence of the environment on an organization in the US. Legislation The legal environment forces organizations to become complex while affecting business operations directly. It is difficult for businesses to operate their activities without meeting obligations relating to regulations of the law. Some of the regulations that may affect bussines organizations include consumerism regulations, competitive and relations of employees. Most of regulations are associated with regulatory agencies. The US has the powerful regulatory agencies that include Occupational Safety and Health Administration (OSHA), Equal Employment Opportunity Commission (EEOC), Environmental Protection Agency (EPA) and many others. Compliance cost of the regulations is very expensive although most of them are passed on consumers at the end. This means that most of the product prizes may be high to meet the requirements of all the regulations. Therefore, the organizations commodity-marketing price depends heavily on the legal requirements (Schmidt, 2005). Socio-cultural Factors Socio-cultural factors of environment comprises of traditions, values and lifestyles that provide the characteristics upon which the organization operates. Socio-cultural factors of environment affects the ability of an organization to get resources, come up with its own services and operate within a society. Social-cultural factors comprises of all aspects within the society that has the ability to influence the performance of an organization. They can include expanding educational levels, population demographics, values and norms together with the attitude towards social responsibility (Schmidt, 2005). Technological Factors Technology is a factor that affects the development of strategic plans of an organization. Variation in technology may lead greatly influence the demand of the organizations goods and services. It may also affect its processing techniques and the required raw materials for manufacturing goods. The changing of technology can influence an organization in two ways. First, it may provide new opportunities for the organization to explore and get better returns. On the other hand, it may cause threats to the survival status of the organization, the product or industry. Technological improvements continue to increase at a very high rate, which requires that all firms be a constant revolution to survive. Balance of Payment Balance of payment is the net difference in goods that bought and sold by business people of a country. It is a common practice for all the nations to reduce the dollar value of imports and increase its exports. This is done by creating barriers for specific goods that enter into a country. Such like practices lowers the completion of firms that have their goods protected through formation of trade barriers. For example, Mexico imports very little automobiles. The main reason for this act is to promote internal development of the industry. This has various advantages to Mexico as a country. It creates a large market for the country’s automobiles and increases job market for country’s workers. However, the aspect of restricting good from entering the country has negative effects relating to production of goods of low quality and increasing of prices (Schmidt, 2005). Another serious problem regarding restriction of goods is the possibility of possibility of encountering reciprocal restriction of imports. Because of retaliation restriction on imports for Japanese automobiles and televisions by the US, the country imports limited agricultural products from US. Political Factors Political issues normally have an impact on business operations in a country. Recently, most countries moved towards privatization of government owned businesses and utilities. This left out protection of workers’ rights to the discretion of the new owner. This means that all firms should be able to cope up with the prevailing political environment to survive. Good examples include the Deutsche Telekom, Telstra of Australia and British Telecom had to make some readjustments in their approaches to marketing. This is because there was an increase in competition in most of companies that underwent privatization program. The same aspects affect the groceries since they operate within political geographical areas. Government owned groceries might be privatized to enable more private organizations to run the business. Competition among different organization can lead to a price cut-off to increase more sales. This might cause havoc in the company due to low profit margin (Kotler & Armstrong, 2006). Monetary and Fiscal Policies Fiscal and monetary policies employed by federal government have influence most of the business operations. The Federal Reserve System controls monetary issues, which affect the volume of money in supply together with the interest rates on bank loans. Fiscal policies signify purchases, which are made by the federal government. For instance, allocation of finances to defense may imply that the government intends to acquire hardware and weapons. If the allocations could have been taken to education departments and health and human services, most of the money could have comprised transfer payments. The main beneficiaries of the policy in this context may be in basic shelter and food businesses. It does not matter how much the relocates its expenditure, the end results are loses in sales and reduced budgets for some organizations and supplementary opportunities for other organizations (Schmidt, 2005). Despite the fact that deficit spending is unpopular in the US, it may allow the government to increase its expenditures, which in turn affects exchange rates, interest rates and other economic developments. Groceries being among the businesses in the US the policy have an influence on how they operate the business. Economic Environment Economic factors are of great concern for marketing organizations since they are able to affect costs, demand, profits and prices of a commodity on the market. Economic factors are clearly out of the company’s control although different enterprises may be profound. The economic and political forces are normally related in one way or the other. For example, the war in the Middle East countries caused oil crisis in the year 1973 that produced great economic shock waves in all western world (Kotler & Armstrong, 2006). This resulted in increase of crude oil prices. The result was an increase in costs of energy and other oil related raw materials like synthetic fibers and plastics. This greatly led to world recession and it serves to give examples of dramatic economic shift and can reverse the traditional structures and balances in business environment. To market groceries in US the marketers have to monitor economic environment at domestic and international levels. Economic shifts come with great opportunities and threats. Understanding and monitoring the economic environment carefully grocery marketers can realize a position to safeguard against the potential threats and move on to capitalize on potential opportunities (Kotler & Armstrong, 2006). Other Macro-environmental Factors There are other sub-environmental factors, which can be of great importance for management of marketing. For example, religious factors in a country can be a source of opportunities and threats for business organizations. People from different religions prefer different kinds of food. For instance, Muslims will be happy to get dates while Christians and Buddhists prefer other fruits. It is important for grocery marketers to observe religious factors to provide goods and services according to religious preferences. Demographic shifts are considered very important by several business organizations in the UK. Generally, the population of UK has attained stability at approximately fifty-six millions for several years. The birthrate has been reducing while old people live longer. Organizations that provide child related goods and services have been reducing or observing static business operations. The organizations shift to offer goods for the elderly people in the area (Schmidt, 2005). Microenvironment Factors Microenvironment refers to elements that a marketing firm can easily manipulate and control in order to increase information that can help in improving the marketing operations of the organization. Manipulation of these factors improves customer satisfaction in favor of the organization. McCarthy classified all the microenvironment into four parts naming them as the four ps. They include product, place, price and promotion. Since price and product are obvious, it is important to discuss promotion place. Place comprises of two main elements. The first element is relates to the channels of supply which are the outlets of the firm and the techniques through which the grocers goods reach the customers (Schmidt, 2005). In this context, a channel may be retail outlets sales people who take part in selling the groceries. The second part of place relates to warehouses and transportation means through which the groceries are transported to customers. Place in marketing is quite important since it identifies means and ways for placing groceries from suppliers to customers. It is better described as distribution mix. Promotion on the other hand has a mix well known as promotional mix. It may encompass sales promotion, advertising and selling of the groceries. For instance, promotion can be a misnomer since promotion can easily mean sales promotion. Selling in this context is promoting sales through a word of mouth by the sales force (Kotler & Armstrong, 2006). Application of social concept in marketing Social responsibility has the expectation that individuals or business should strive in improving the society’s welfare. It translates into public expectations that the business must engage in activities that promote the norms and values of the community. For instance in the US, the social standards are constantly changing. Some people require fast foods while others require fresh food that has not undergone manufacturing process. It is the responsibility of the grocery sellers to market their products considering these norms. The rate of chronic diseases in increasing in most parts of the world including the US. Doctors provide information on different types of foods that can prevent the development of these diseases. Groceries are among the foods that the doctors target for most of the diseases. Combination of social factors and the demand of by people in the US can provide the grocers with great opportunity to identify types of foods to promote and sell on the market (Kotler & Armstrong, 2006). In marketing, the marketers should have the ability to balance all the factors affecting their trade. This is because they all have a great impact on the success of their marketing activities. The microenvironment for instance is very important because it determines the organization of every business set-up. The internal environment, which is part of the microenvironment, determines the individual success of every business. The internal structure of a business including its objectives and strategies will determine how the firm will fair in the industry. A poorly organized business will even be difficult for the marketers to sell it to the people. The impact of the external factors on the success of the firm will depend on the internal organization of the firm. The firms also need to have the correct choice of the external environment composition because this will affect the success of the marketers. The choice of the appropriate suppliers will have an impact on the success of the firm (Kotler & Armstrong, 2006). Bibliography Schmidt, S. (2005), Think It's a Breeze Moving Goods Between the U.S. and Mexico? Think Againegulatory Regimes Are the Hidden Pitfalls in NAFTA and Other Free Trade Agreements. World Trade, pearson education, New Jersy. Kotler P. and Armstrong G.(2006), Principles of Marketing (Version 12/E). Pearson Education Inc. New Jersey. Read More