Environmental Factors Argumentative
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Environmental factors can play a major part in a company’s marketing plan. Environmental factors can include social, ecological, political, cultural, technological, and ethical issues. PepsiCo can face all these issues because they are a global company. Many of these issues can affect PepsiCo’s marketing plan even in different areas of the United States. Larger environmental factors affect the way they market globally with different factors having to be considered in each area of the world.
A company operates within a larger framework of the external environment that shapes the opportunities and threat to an organization. The external environment for global and domestic marketing decisions is comprised of forces that are part of a company’s marketing process but is external to the organization. Those forces include the organization’s market, its producer’s suppliers, and intermediaries. It would be necessary for companies to understand that the environmental conditions because the conditions interact with marketing strategy decisions. The external environmental has a huge impact on the determination of marketing decisions. Any successful company will scan the external environment that affects them so they would be able to respond profitably to the unmet needs and trends in targeted markets.
PepsiCo is a large company that conducts both domestic and global marketing and is very well known. One of the main products and one that I use everyday is Pepsi. PepsiCo also produces Quaker Oats, Lays chips, Gatorade, and Tropicana orange juice.
With the world so focused on ecological factors in today’s environment, it is only wise for PepsiCo to align itself with the majority. PepsiCo continues to be immersed in ecological environmental factors. Domestically PepsiCo has pledged themselves to the Greenhouse Gas Cuts, hoping to reduce gas emissions enough to equal the use of 5 million automobiles (PepsiCo.com). PepsiCo operates a state-of-the-art Frito-Lay plant in Texas that is environmentally friendly and will serve as a model of resource conservation through innovations in renewable energy, alternative lighting, energy efficiency standards, and environmentally intelligent choices (PepsiCo.com). Internationally PepsiCo’s beverage and snack has implemented a number of water projects such as the one used in Europe, India, and Latin America where rainwater is harvested to help replenish aquifer supplies (PepsiCo.com).
Without complete market research, a company can encounter humorous and often embarrassing disappointments when it comes to cultural environmental factors. Pepsi’s marketing managers learned a tough lesson about the language differences and how a successful English based product slogan can become lost in translation. The Taiwanese consumers were reported to be taken aback by the Pepsi slogan “Come alive with the Pepsi Generation,” which translated into Taiwanese reads “Pepsi will bring back your ancestors from the dead” (Henderson, 2009). This marketing mistake caused obvious embarrassment among Pepsi’s top marketing managers, though this would not be the last time that they were too hasty in their pursuit of the international marketplace.
The political environment includes the governmental or special interest groups that will influence and limit the various organizations or individuals in a given society. An organization will hire lobbyists to influence legislation and will run ads that state their point of view on ‘public issues’. The number of special interest groups has grown in number and power over the last three decades that puts more limitations on marketers. An example of this would be an example of response by marketers to special interests is green marketing, the use of recyclable or biodegradable packing materials as part of a marketing strategy.
Social and cultural forces are the most difficult uncontrollable variables to predict. The marketers must be able to understand and appreciate the values of the environmental in which they operate. The social/cultural environment is made up of forces that will affect the society’s basic values, perceptions, preferences and behaviors. The U.S. values and beliefs include equality, achievement, youthfulness, efficiency, practically, self-actualization, and freedom. The changes in a social/cultural environment affect the consumer’s behavior, which in turn will affect the sales of products. The trends in social/cultural environmental include individuals that will change view of themselves, others and the world around them while moving toward self-fulfillment.
Technology can influence domestic and global marketing decisions and marketing and public relations common sense, especially when it opens any number of doors to being able to tap into a vast global marketplace. Information technology is increasingly becoming important as an enabler to being able to operate efficiently, interfacing with consumers and maintaining financial accuracy and effectively managing resources. PepsiCo has embarked on a multiyear business process transformation initiative that includes the delivery of a SAP (a computer system that will link all of PepsiCo’s systems and processes) enterprise resource planning application (PepsiCo.com). This application will help to divert the possibility of PepsiCo not being able to process transactions accurately and effectively or remain in step with the changing needs of the trade, which could result in the loss of customers. Failing to deliver this application on time or anticipate the necessary readiness and training needs could lead to business disruption (PepsiCo.com).
Minority populations are growing faster then the population overall. Each year, racial and ethnic minorities constitute a greater share of potential consumers, employees, and retail customers. Because of this PepsiCo employees receive human rights training, in which they explore the human rights intrinsic to all and the importance of sustaining an inclusive nature (PepsiCo.com). PepsiCo’s code of conduct requires all employees to follow local employment laws and regulations, including labor laws and treatment of employees. This type of thinking and training helps to show itself in the marketing practices of the company. In being able to achieve a high standard for ethical, social, and environmental views PepsiCo has helped to ensure that their reputation will take no damage which could result in a rejection of their products by consumers and a loss of brand equity (PepsiCo.com).
Environmental factors can significantly influence domestic and global marketing decisions. As such, it is an organizations marketing managers responsibility to research legal, social, ecological, cultural, technological and ethical factors that may negatively impact the success of a product marketed. Past, present of future, it pays to invest in market research in the hope of revealing the potential of all environmental factors before launching a product or service domestically or globally.
In conclusion, by assessing external factors will enable the company to position itself within its operating environment. A number of macroeconomic factors will have affected any company, and will continue to affect it. Environmental factor assessments help to gauge the direction and strength of the major trends that shape a particular industry. Sometimes these pose a threat while other times they can create new opportunities. In assessing the environment, it is important to find new business opportunities, new market places, and companies with which some form of cooperative arrangement can be developed.
http://www.pepsico.com/PEP_Citizenship/EnvironmentalNews/news/index.cfm Retrieved on June 19, 2009.
Perreault, W. & McCarthy, E. (2004). Basic Marketing (15th ed). New York, New York: McGraw-Hill/Irwin.
http://ezinearticles.com/?Top-Ten-Biggest-International-Marketing-Mistakes-of-All-Time&id=529007. Brian Henderson. Retriev