The marketing mix i. e. the ‘4Ps’ (Production, Price, Place and Promotion) is heavily dependent on the external environment. However, the environment is very dynamic and continuously changes; for this reason, the organisation has to keep pace and even anticipate changes through environmental scanning, which is “the collection and evaluation of information from the wider marketing environment that might affect the organisation and its strategic marketing activities” (3).
A successful organisation is one which understands, anticipates and takes advantage of changes within the external environment. Socio-cultural environment This is of great importance to marketers, for it is these factors that determine and heavily influence the customer’s needs and wants. The most important aspects include: the demographic environment (e. g. age, size, gender, race, occupation and location of population), socio-cultural influences (e. g. consumer expectations, attitudes, tastes and demands), environmental issues (e. g.
origins, content and manufacturing processes of consumer products), animal welfare, health concerns, ethics and consumerism (raising awareness of issues such as consumer rights and environmental and personal heath by organised pressure groups). “The type of goods and services demanded by consumers is a function of their social conditioning and their consequent attitudes and beliefs” (4). As society changes, as behaviours change, organisations must be able to offer products and services that aim to complement and benefit people’s lifestyle and behaviour.
In the UK, “90 per cent of people between the ages of 15 and 34 owned or used a mobile phone in February 2003, and 52 per cent aged 11 to 14” (5). To meet the different needs and desires of age groups and genders, Sony Ericsson has an enormous variety of phones to suit every individual (17 different models on the market); from the simple and easy to use T100, to the sophisticated and revolutionary hi-tech P900. The T610 with its sleek styling and integrated camera has unquestionably been a successful phone, and demand is outstripping supply. Sony Ericsson T610
It has absolutely everything you would want in a mobile phone, and its price is very reasonable (free on monthly tariffs). Katsumi Ihara, president of Sony Ericsson said “The DNA of Sony Ericsson is very product-focused. A product with the Sony Ericsson brand should have a ‘wow’ factor. It has to be something very cool, stylish, and very innovative” (6) Technological environment Changes in technology are changing the way businesses operate; technological factors are vital for competitive advantage, and are a major driver for change and efficiency.
As consumers, we tend to take the manufacturing processes of products for granted, so long as they meet our expectations. However technology has a profound effect on consumer products, and indeed in all areas of marketing. R&D on technological advances (although usually very costly and risky) can affect the “materials, components and products, the processes by which products are made, administration and distribution systems, product marketing and the interface between the organisation and the consumer” (7). Technological advances over the past decade or so have changed the old ‘brick’ style phones to ‘slick and slim’ ones.
The P900, probably the most sophisticated and hi-tech mobile on the market, has definitely set the standards for other producers to follow. It has over 65,000 colours, is able to take still pictures and video, can send and receive email via WAP, can be used as a PDA, has Bluetooth and infrared capabilities and a built in MP3 player with 32MB of memory. Sony Ericsson has also just released its first 3G mobile, the Z1010 which is a dual UMTS/GSM-GPRS phone (8). Also nowadays, changing the front and back cover and downloading polyphonic ringtones has become commonplace, especially for teenagers.
In terms of marketing, the media has been very effective for the T610, through television and newspaper adverts, billboards and online marketing (websites and banner ads). You can even purchase your mobile phone from online with the accessories that go with it, and there is a 24 hour online support system, with FAQs etc. Economic/competitive environment This covers both macro and micro-economic variables that have an affect not only on competition within organisations, but also on the ability of a firm to invest in stocks and new products, as well as the propensity of consumers to buy the finished goods.
All businesses are affected by economic factors, both nationally and globally, however these economic factors are largely outside the control of the individual firm. Macroeconomic influences generated by government policies include: direct and indirect taxation, government spending, interest rates, exchange rates and international trading blocs. Consumer confidence and behaviour is affected when an economy is in a boom, recession or recovery.
The microeconomic environment concerns market structures, “because these will influence what sort of competition is up against, what scope the organisation has to manipulate the 4Ps and how broad an impact the organisation’s marketing activities could have on the market as a whole” (9). Main market structures include: monopoly (where a firm controls 25 % or more of a market), oligopoly (where several firms dominate a market), monopolistic competition (where many unique producers each meet a market segment’s needs) and perfect competition (where there are a large range of producers, of which none are big enough to influence the market).