Kingston University
MSc in International Business Management

THE MARKETING ENVIRONMENTAL FACTORS AND
AN ILLUSTRATIVE SAMP...
ABSTRACT
Marketing is an indispensable factor for deciding the success of a business. Nonetheless, creating an
effective m...
THE MARKETING ENVIRONMENTAL FACTORS AND AN ILLUSTRATIVE SAMPLE FOR THEIR
IMPACTS THAT BASED ON THE UK FRAGRANCES INDUSTRY
...
strategies of organisations unequivocally (Ebstudies, 2012). Thus, next paragraphs will give an insight view
about these i...
Figure 3. UK Expenditure on Personal Care Products and Total Expenditure at Current Prices (£m at rsp and %), over
the 5-y...
Figure 4. People Living Alone in Great Britain by Genre and Age (%), 1986/1987 and 2011 [ONS, 2013]

Figure 5. Ethical Con...
BIBLIOGRAPHY
Beckmann, M. (2011) ‘PEST Analysis (SLEPT, PESTEL, PESTLE, STEEPLE, STEEPLED Analysis)’, May 2011 *Online+.
A...
Marketingteacher (2013) ‘What is PEST Analysis?’ [Online]. Available at: http://www.marketingteacher.com/lessonstore/lesso...
Upcoming SlideShare
Loading in …5
×

THE MARKETING ENVIRONMENTAL FACTORS AND AN ILLUSTRATIVE SAMPLE FOR THEIR IMPACTS THAT BASED ON THE UK FRAGRANCES INDUSTRY

7,610 views
7,170 views

Published on

Marketing is an indispensable factor for deciding the success of a business. Nonetheless, creating an effective marketing strategy as well as a proper marketing decision has been influenced by many factors and the greatest impacts are from the macro-environmental factors. The purpose of this essay assignment is to introduce these factors briefly. Based on the basic model of the macro-environment factors as known as PEST analysis system and an empirical example of the men’s fragrances industry in the UK, this assignment will also indicate the importance and a sizeable influence of those above factors to the marketing strategy and tactics of an organization, whether it is large or small.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
7,610
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
56
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

THE MARKETING ENVIRONMENTAL FACTORS AND AN ILLUSTRATIVE SAMPLE FOR THEIR IMPACTS THAT BASED ON THE UK FRAGRANCES INDUSTRY

  1. 1. Kingston University MSc in International Business Management THE MARKETING ENVIRONMENTAL FACTORS AND AN ILLUSTRATIVE SAMPLE FOR THEIR IMPACTS THAT BASED ON THE UK FRAGRANCES INDUSTRY Submitted by: Maxie Submission date: 27th Oct 2013 Lecturer: Hilary Wason Word count: 888 words
  2. 2. ABSTRACT Marketing is an indispensable factor for deciding the success of a business. Nonetheless, creating an effective marketing strategy as well as a proper marketing decision has been influenced by many factors and the greatest impacts are from the macro-environmental factors. The purpose of this essay assignment is to introduce these factors briefly. Based on the basic model of the macro-environment factors as known as PEST analysis system and an empirical example of the men’s fragrances industry in the UK, this assignment will also indicate the importance and a sizeable influence of those above factors to the marketing strategy and tactics of an organization, whether it is large or small. This image for illustrative purposes only: Summer scents series - the seasonal new fragrance collection from L’Oréal Luxury Products International (The Moodie Report, 2010)
  3. 3. THE MARKETING ENVIRONMENTAL FACTORS AND AN ILLUSTRATIVE SAMPLE FOR THEIR IMPACTS THAT BASED ON THE UK FRAGRANCES INDUSTRY One of the most prominent business issues was the debate about the influences of environmental factors on marketing strategies of organisations (Morello, 2013). In fact, the formulation of the marketing decision might be driven strongly by four basic external factors such as political, economic, social and technology which also be known as the PEST analysis (Thakur, 2010) [See Figure 1]. The aim of this essay assignment is to give a description about those factors in brief. Based on some correlative data as some businesslike examples from the market of UK men’s perfume in the UK, it also points out how each environmental factor has affected and changed the face of the marketing plans of the fragrances industry in particular or businesses’ forms in general. Figure 1. The model of PEST analysis (Beckmann, 2011) Firstly, from the interpretations of a well-known website about marketing education, Marketingteacher (2013) has described that environmental factors can be divided into three levels according to the internal environment, the micro-environment and the macro-environment [see Figure 2]. The internal environment refers to the small and controllable forces staying within the company; whereas the micro-environment affects the organisation’s non-capacity to serve the customers. The macro-environment is the largest environment and refers to all external and uncontrollable forces. Although it has been suggested that macro-environment factors do not influence the marketing abilities directly, they affect the marketing
  4. 4. strategies of organisations unequivocally (Ebstudies, 2012). Thus, next paragraphs will give an insight view about these issues based on some practical examples from men’s perfume industry in the UK. Figure 2. Three levels of the marketing environmental factors and their components (Marketingteacher, 2013) According to marketing report (Research and Market, 2013), it suggests that the market for men's perfume strongly increased in the UK in 2013, accounting for 37.3% of the total market of men's toiletries. This positive numbers were assessed from many changes in businesses' marketing tactics under the control of environmental factors. To illustrate this, the first noticeable point is that the legal framework for the cosmetics industry (EU Cosmestic Regulation) has fully implemented in Europe on July 2013. In addition, one of the major policies is to consider the certain ingredients of all cosmetics' products, including men's fragrances from all types of business throughout the nations of EU community. An example for this case is that if the products contain nano-materials which are not on the ingredients list, the company must send a detailed report to the European Commission about 6 months before launching merchandises to market. The second point is the impact of economic factors. In 2009, Britain was declared out of the recession; nonetheless, consumers still remained cautious in their spending. Part of the reason was mainly due to inflation and rising unemployment in the UK; and consumers tended to switch to choose own-label items rather than luxury branded products to reduce costs. It can be argued for this situation that some companies would change their marketing strategy and approach by offering new products. One portion is to catch customers’ changes but on the other hand, it is not to conflict with company’s traditional products. As a result, the market shift increased the total consumption of cosmetic products including men's fragrances. As can be seen from figure 3 below (ONS, 2013), total consumer reached £ 991.091bn, accounting for 2.5 % of total expenditure in 2012.
  5. 5. Figure 3. UK Expenditure on Personal Care Products and Total Expenditure at Current Prices (£m at rsp and %), over the 5-year period to 2012 [ONS, 2013] The social-cultural forces are also unavoidable factors for marketing strategies. In few years, the number of single-men and men who are conscious about looking after their appearances are playing a major role in the consumption of personal care products. Therefore, the company which promptly grasps this market segment earned no less profitable. According to L'Oréal’s report (2010, p.7), in a collaboration with fashion brand Diesel to create a men’s perfume series, their Only-the-brave has become a focal point in the portfolio list of men and considered as the most successful men's fragrance model ever. Adding to this point, figure 3 illustrates the percentage of single-men from aged 25 to 44 in 2011 almost doubled compared with more than two decades ago (13% and 7% respectively). Furthermore, the distributors realized a demand which arose in the consumers' heart about using products in ethical standard. Consumers nowadays interest of choosing a product which has less damaging to the environment that makes them feel comfortable while using. Figure 4 outlines more about the current consumption of ethical personal care products in England in 2011.
  6. 6. Figure 4. People Living Alone in Great Britain by Genre and Age (%), 1986/1987 and 2011 [ONS, 2013] Figure 5. Ethical Consumerism on Cosmetics and Personal Products (£m), 2000 and 2010-2011 [The Co-operative Group, 2012] Finally, the influence of technological factors are known for the new innovative features of products, along with the remarkable growth of social media and the Internet in recent years (e.g. Facebook, YouTube), which are related to the most effective marketing tools ever. In other words, it is also a way of fragrance companies to test new product ideas on market easily, support for their marketing campaigns largely. Another noteworthy point is to need the different technologies of product line for men and women because of the dissimilar basis in their biological mechanisms (Research and market, 2013). Taking everything into consideration, although PEST analysis has some limitations (Thakur, 2010 & Kolemuller, 2013), it is assessed as one of the best tools which used to analyse the influences of environmental factors on marketing strategy of organisations. By using PEST frameworks in the UK fragrances market (2013), this assignment might achieve its purpose to illustrate the sizeable impacts of environmental factors on marketing tactics of business as how they avoid negative consequences to be successful.
  7. 7. BIBLIOGRAPHY Beckmann, M. (2011) ‘PEST Analysis (SLEPT, PESTEL, PESTLE, STEEPLE, STEEPLED Analysis)’, May 2011 *Online+. Available at: http://www.beckmann-bio.com/files/dictionnary/pest_analysis.html [Accessed: 21st October 2013] Child, K. (2008) ‘Health and Beauty: Retailing – UK’, Mintel reports, March 2008 [Online]. Available at: http://academic. mintel.com/display/280578/?highlight=true [Accessed: 21st October 2013] Cornford, L. (2011) ‘Men’s and Women’s Fragrances – UK’, Mintel reports, September 2011 [Online]. Available at: http://aca demic.mintel.com/display/545538/ [Accessed: 21st October 2013] Cornford, L. (2012) ‘Men’s and Women’s Fragrances – UK’, Mintel reports, September 2012 [Online]. Available at: http://aca demic.mintel.com/display/590313/ [Accessed: 21st October 2013] Cornford, L. (2013) ‘Men’s and Women’s Fragrances – UK’, Mintel reports, August 2013 [Online]. Available at: http://academic. mintel.com/display/638234/?highlight=true# [Accessed: 21st October 2013] Craig, C. S. & Douglas, S. P. (2005) International Marketing Research, 3rd Edition. Publisher: John Wiley & Sons Ebstudies (2012) ‘Various environmental factors affecting marketing function’, 19th July 2012 [Online]. Available at: http://ebstudies.wordpress.com/2012/07/19/various-environmental-factors-affecting-marketing-function/ [Accessed: 22nd October 2013] Euromonitor (2010) ‘World Cosmetics & Toiletries Marketing Directory’, 6th edition, [Online]. Available at: http://www. euromonitor.com/medialibrary/PDF/WorldCosmeticsandToiletriesDirectory.pdf [Accessed: 21st October 2013] Global Insight, Inc. (2007) ‘A Study of the European Cosmetic Industry’, Final Report, October 2007 [Online]. Available at: http://ec.europa.eu/enterprise/newsroom/cf/_getdocument.cfm?doc_id=4562 [Accessed: 21st October 2013] Jobber, D. and Ellis-Chadwick, F. (2012) Principles and Practice of Marketing, 7th Edition. Publisher: McGraw Hill Keynote (2013) ‘Cosmetics & Fragrances Market Update 2013’ *Online+. Available at: https://www.keynote.co.uk/ market-intelligence/view/product/10860/cosmetics-%26-fragrances?highlight=fragrances&utm_source=kn.reports. search [Accessed: 21st October 2013] Keynote (2013) ‘Men’s Toiletries & Fragrances Market Assessment 2012’ *Online+. Available at: https://www.keynote .co.uk/market-intelligence/view/product/10522/men%27s-toiletries-%26-fragrances?highlight=fragrances&utm_so urce=kn.reports.search [Accessed: 21st October 2013] Keynote (2013) ‘Men’s Toiletries & Fragrances Market Assessment 2013’ *Online+. Available at: https://www.keynote .co.uk/market-intelligence/view/product/10852/men%27s-toiletries-%26-fragrances?highlight=fragrances&utm_so urce=kn.reports.search [Accessed: 21st October 2013] Kolemuller, N. (2013) ‘Reason to use SWOT and PESTLE Analysis’, Demand Media [Online]. Available at: http://smallbusiness.chron.com/reason-use-swot-pestle-analysis-40481.html [Accessed: 22nd October 2013] Kotabe, M. and Helsen, K. (2010) Global Marketing Management, 5th Edition. Publisher: John Wiley & Sons L’Oréal Report (2010) ‘The UK Beauty Industry: 2010 Trends’, L’Oréal UK & Ireland [Online]. Available at: http://www.loreal.co.uk/_en/_gb/pdf/Beauty_Trends.pdf [Accessed: 22nd October 2013] Lee, K. and Carter, S. (2012) Global Marketing Management, 3rd edition. Publisher: OUP Oxford Libby, C. (2013) ‘Men’s Toiletries – UK’, Mintel reports, October 2013 [Online]. Available at: http://academic. mintel.com/ display/638277/?highlight=true [Accessed: 21st October 2013]
  8. 8. Marketingteacher (2013) ‘What is PEST Analysis?’ [Online]. Available at: http://www.marketingteacher.com/lessonstore/lesson-pest.html [Accessed: 22nd October 2013] Morello, R. (2013) ‘What are environmental factors that affect marketing decision?’, General Advertising [Online]. Available at: http://yourbusiness.azcentral.com/environmental-factors-affect-marketing-decisions-22203.html [Accessed: 22nd October 2013] ONS (2013) ‘Consumer Trends, Q1 2013’, Office for National Statistics, 27th June 2013 [Online]. Available at: http://www.ons.gov.uk/ons/dcp171778_315834.pdf and http://www.ons.gov.uk/ons/rel/consumertrends/consu mer-trends/q1 -2013/rpt-q1-2013-sb---consumer-trends-data-tables-pdf-version.pdf [Accessed: 22nd October 2013] ONS (2013) ‘General Lifestyle Survey, 2011: Chapter 3 – Households, families and people (General Lifestyle Survery Overview – a report on the 2011 General Lifestyle Survey)’, Office for National Statistics, 7th March 2013 [Online]. Available at: http://www. ons.gov.uk/ons/dcp171776_302210.pdf [Accessed: 22nd October 2013] Palmer, A. (2009) Introduction to Marketing Theory and Practice, 2nd Edition. Publisher: Oxford University Press Research and market (2013) ‘Men’s Toiletries & Fragrances Market Report 2013’, August 2013 [Online] Available at: http://www.researchandmarkets.com/feats/download_sample.asp?productId=2671535&sampleId=66821&fileName =Recent%20and%20Future%20Developments.pdf [Accessed: 22nd October 2013] Sender, T. (2013) ‘Department Store: Retailing – UK’, Mintel reports, May 2013 [Online]. Available at: http://aca demic.mintel.com/display/280578/?highlight=true [Accessed: 21st October 2013] Smith, A. (2013) ‘How business environmental factors influence strategy’, Demand Media [Online] Available at: http://smallbusiness.chron.com/business-environmental-factors-influence-strategy-65009.html [Accessed: 21st October 2013] Strutton, M. (2010) ‘Men’s Fragrances – UK’, Mintel reports, September 2010 [Online]. Available at: http://aca demic.mintel. com/display/479906/?highlight=true [Accessed: 21st October 2013] Strutton, M. (2013) ‘Women’s Fragrances – UK’, Mintel reports, August 2010 [Online]. Available at: http://aca emic.mintel. com/display/479878/?highlight=true [Accessed: 21st October 2013] Strutton, M. (2012) ‘Beauty Online – UK, Mintel reports, December 2012 [Online]. Available at: http://aca demic.mintel. com/display/480959/?highlight=true [Accessed: 21st October 2013] Thakur, S. (2010) ‘History of the PEST Analysis’, Project Planning, 30th December 2010 [Online]. Available at: http://www.brighthubpm.com/project-planning/101201-history-of-the-pest-analysis/ [Accessed: 22nd October 2013] Thakur, S. (2010) ‘Limitations of a PEST Analysis’, Project Planning, 26th December 2010 [Online]. Available at: http://www.brighthubpm.com/project-planning/100700-limitations-of-a-pest-analysis/ [Accessed: 22nd October 2013] The Co-operative group (2012) ‘The Co-operative’s Ethical Consumer Markets Report: Ethical Consumer Markets Report 2012’, Publications & Reports archive [Online] Available at: http://www.cooperative.coop/PageFiles/ 416561607/Ethical-Consumer-Markets-Report-2012.pdf [Accessed: 22nd October 2013] The Moodie Report (2010) ‘L’Oréal heralds arrival of summer with new seasonal collection’, 13rd May 2010 [Online]. Available at: http://moodiereport.com/document.php?doc_id=24143 [Accessed: 22nd October 2013] Vrontis, D. & Pavlou, P. (2008) ‘The external environment and its effect on strategic marketing planning: a case study for McDonald’s’, Journal of International Business and Entrepreneurship Development, Vol. 3, No. 3-4, pp. 209-307 [Online]. Available at: http://s3.amazonaws.com/academia.edu.documents/1876883/McDonalds_08_JIBED_Vol_3_ No._4__with_PavlouP.pdf?AWSAccessKeyId=AKIAIR6FSIMDFXPEERSA&Expires=1382487502&Signature=TgxTX5ZXoL oB63WoAvZCfV6%2F%2FWw%3D [Accessed: 21st October 2013]

×