Marketing Environment Marketing Is Considered As Both Term Paper

Excerpt from Term Paper :

Marketing Environment

Marketing is considered as both an art and a science. The aim of this effort or activity in any organization is to ensure that the future development and growth of the sales of its products takes place and thus maximize the profitability of the company which are received from the products. At the same time, one should understand that the world develops in a helical manner. This makes the possibility of what is new commonplace tomorrow, and thus enables to reduce profits. On the other hand we could note that technical developments bring out the possibilities of new products which have to be launched by a profitable company in its search for the retention of market share and profits. Some succeed and some don't succeed. The search therefore continues and often new leaders thus have a chance to replace the old. This is thus the environment in which all marketing companies have to operate in to carry their activities. But, this is probably philosophical, and there are several practical methods available to ensure that chances for success thereby improve, and that is what is being discussed in this analysis.


1. The world outside the organization that are being looked at, can be viewed as the environment and it constitutes of all institutions and social forces that have any direct or indirect effects on the organization in terms of its ability -- competitive, economic, technological, political, legal, demographic, cultural, as well as issues affecting the ecosystem. These influences can not be controlled by the organization, yet all actions of the organization have an effect on these forces. When the organization has the significant knowledge of these problems and the management has enough foresight in order to understand the implications and results of these forces, then the actions of the organization are taken with a view in order to take advantage of these external forces, rather than these forces thereby causing damage to the organization. (The Environment of Marketing)

At the same time, it should be clear that marketing forces within the organization cannot have control over the problems with regard to the environment, and at the same time, their actions have to be taken forward in such a manner that the expected changes which will be brought in the environment will not hurt the organization, and in certain cases, it may even lead to a development and progress of the organization. Part of the advantages come from the strengths which lie with the organization and a financial strength will make opportunities for it to prosper and grow even when the economic conditions are considered to be poor and be able to gain market shares from competitors. A good technological base will make facilities for the organization to take advantage of the new technologies which are available which may provide new product opportunities. These are however not totally directly dependant on the direct marketing executives, but on the total management which decides about the relative strengths and weaknesses of organizations. The importance of new technologies is very well-known to organizations which have an interest in promoting development and growth.

The same technology is reflected in the life-styles, consumption patterns and expenditure patterns of consumers. The changes are strong enough to develop new industries, change or even destroy some existing industries and ensure growth of certain sections of markets. The rate of technology changes effect the pricing, development, distribution and promotion of products. The organizations have to react, and react fast. For Castrol, one of the major impacts is expected to come from the Green movement which has spread rapidly in America, Japan, and Western Europe. There has been a rapid increase in environment consciousness. (The Environment of Marketing) Earlier, for Castrol, the marketing environment according to their perception was the development of new engines which required changes in engine oil, government regulations which required changes in functioning of engines, and the continuing demand from customers for more expensive products so that they could stand out from the crowd. (Taken from case study)

2. Changes in technology are now changing business operations. The latest impact is coming from Internet, and that is having a profound impact on the promotion strategy of many organizations. This permits consumers to shop 24 hours a day comfortably from their homes. Is this applicable to Castrol? The technological revolution involves a faster exchange of information, which would be beneficial for businesses if they can react quickly enough. (Marketing Environment) The development of products at Castrol with a view to the future can be seen at four different stages. The first stage was through the addition of different synthetic material to the crude-based products so that the performance of the lubricant could be better. The next state of development came when the engines were technology driven and Castrol designed special lubricants for many of these engines, so that the individual engines could function better. The problem today is regarding the environmental question and the company is now conducting a lot of research into developing oils that aim to reduce harmful pollution through the reduction of emissions. The last style of development is in packaging so that individual pure products can reach the customers. This most oils are sold in two packs - one for the mechanic who is changing oil in the car and the other for the owner who is adding on oil to his own car. (Taken from case study)

3. The country that is being talked about now has a diverse range of conditions, and individuals in different economic status. The aim of this analysis is to devise a strategy for the marketing and sales organization of Castrol in this country to concentrate on the individuals who are likely to purchase products that are being produced and marketed by the Company. This type of an exercise is extremely useful for the individuals who have the responsibility for sales and may be expected to provide the highest returns from all expenditures that are undertaken in marketing or sales. The first question that has to be decided is whether the target is to individual consumers or businesses. Here the meaning of businesses is those who are engaged in servicing of their own vehicles or those who service vehicles for others. (Market Segmentation)

Regarding individual customers, one should note that this is an expensive product and customers have to be given the feeling that they are buying something extra-ordinary for excellent performance of their vehicles. For this purpose, emphasis has to be laid on the group who are interested in safety, security, economy, comfort, speed, quality, durability and similar qualities. At the same time, the potential customers are divided according to their location -- urban or rural. The personality of the users of the product may be expected to be "technical liberals" and that denotes a set who get impressed with benefits given by high tech solutions and their purchase decisions will also be dependant on the technical content of the product. (Market Segmentation)

It should also be realized that the market we are talking about consists of a large number of sub-markets and there are existing differences between the markets. These may not be seen directly in the case of some sub-markets. (Consumer Products and Markets) This is of course not difficult for Castrol as the organization has taken care about supplying products with different specifications for different regions. It has realized the importance of cost reduction through economies of scale. It has also changed products supplied to different markets according to the needs of customers in that area and this is true even for regions and local markets. For this purpose, Castrol organization is broken down into different geographical markets. The changes happen even due the needs of customers in different markets due to the categories of vehicles that they use, like cars in the American market, whereas in Africa, the products will have to tackle rough road conditions. (Taken from case study)

4. To survive all organizations have to develop new products as with time, even the old successful products start gradually yielding less and less profits. The ideas may come from within the company or outside. At the same time, all ideas are not useful and some have to be rejected as they do not fulfill the requirements as perceived by the company. New products which have been developed are likely to increase market potential while others are ideas which are based on concepts that will slowly die out. Among proposed new products some products have large sales and likelihoods of earning high gross margins while some products can be seen to be losers with simple calculations. This is the reason which makes the companies be very careful about choosing appropriate new products for introduction, as introduction of products without a clear analysis will not help the organization. There are also changes in the areas of competition, technology, pricing, costing and the general economy which affects the profitability of different products. (Portfolio…

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