Social and economic factors that affecting marketing
Berkowitz (2012) state that social and economic factors are imperative aspects of marketing that any organization need to consider before laying down a particular marketing strategy. In essence, social and economic factors play a substantial role on the consumer spending. Therefore, it becomes paramount that any business organization has to study and understand the social and economic situations that affect the decisions and purchasing power of the organization’s target customer base, and the factors that affect competitors. Therefore, the following factors are important social and economic factors that need to be considered for a particular marketing strategy;
Disposal income changes
According to smith, the average consumer’s purchasing power is always associated to disposal income. In many purchasing decision, smith states that economic factors that lead to the increase or decrease of disposal income always result in either positive or negative effect in most purchasing decisions. For instance, an increase in the rate of tax will always reduce disposable income (Foeken, 2006). Therefore, this reflects reducing the purchasing power and limiting the possibility of buying goods or services that are nonessential for several consumers. Therefore, this factor will always affect the marketing strategy of business that specializes in discretionary services or goods.
Roberts (2010) indicates that aavailability and credit cost are also essential economic factors that have a significant effect on marketing. The author maintains that when inflation or any other marketing conditions enhances increase of the interest rates on loans, this can affect the marketing negatively as consumer’s purchase reduces. Higher rates of interest also can affect an organization’s potential to develop and promote new products and services if the business will need to borrow to grow.
Local bust or Boom
There are factors that can be natural, environmental, and political hat can highly affect the local market of small business. For instance, an occurrence of an earthquake may lead to destruction of buildings, among other facilities. In response to renovate these buildings, various businesses may grow as a result. This would include hardware business where they sell building materials and home furnishing. On the other hand, a store in the same local economy selling secondary products such as jewelry is likely to encounter a negative economic effect (Tsopoulos, 2011). This may result due to the fact that people may be responding to the major occurrences and forget about nonessential products.
Another scenario would be a local economic factor that may lead to a restaurant tax that impact only eating establishments in one municipality. Other local businesses that may benefit from such revenues include grocery stores that may implement marketing strategy (Tsopoulos, 2011). This will encourage consumers to cook several times at both at home, or that provide ready to eat food that is not subjected to taxation.
Advertising and promotion costs
In a situation where an economic facto affects the costs and methods of advertising outlets, this may impact marketing. For instance, where numerous businesses are experiencing the impacts on the bottom line, some media outlets may be forced to lower the rates of advertising to draw business (Belch & Belch, 2012). As a result, this will lower rates that could benefit the businesses least affected by the economy.
SOCIAL FACTORS IN MARKETING
Most businesses are closely interested in effective marketing and in the quality of the services and products they deal with (Agapitides, 2013). However, the following social factors are important for consideration since they can affect the buying behaviours of individuals.
Attitudes of community
When and organization thinks of marketing a product in a particular target market, when the organization is essentially addressing is the members’ attitude of a specific community towards spending on their product. If the organization sells expensive cloths, it has to understand the community’s attitude towards spending large sums of money on fashion. By narrowing down individuals in the community with the capability and willingness to spend on your product or service, the organization will be ‘segmenting the market’ (Agapitides, 2013). Therefore, having the knowledge on attitudes is important in the product advertising and development strategies.
Social standards are closely related to buying attitude. In essence, these are norms and values held by the community that the organization market the product or service to. For instance, one can assume that a potential customer is unlikely to buy something that he does not determine with or feel she could get use out of. Social, gender, cultural, religious-influence factors associate, as social standards differ by race, Ethnicity as well as way of life (Tsopoulos, 2011). If the business is able to analyze these features of potential customers, then it will be able to position to tailor its marketing strategies.
Hobbies and Interests
In addition to buying out of necessity, people always buy products that enable them serve an entertainment value, are instrumental in hobbies or interested in using them during their free time. If an organization sells a product that can be said to be more of a need than a want, it will do well by focusing on these social factors. Pay attention to trends in market place. If people in a particular community rush towards buying expensive electronics, the organization might consider capitalizing on the products, though they are short-lived, the organization will focus on factors to maintain it in the market.
Availability of time and resources
These are the final social factors that affect marketing and product development. Everyone is restricted to time in different ways; by family, social commitment, and work. If an individual has less time, it implies having less time for shopping on goods and services (Roberts 2010). While money is a tangible resource, time is an intangible resource. The availability of money determines whether an individual will purchase a particular product or not. The solution always is to balance money and time. Therefore, an organization has to keep its products attractive, and available with reasonable prices.
Agapitides, S. 2013. Markets and marketing as factors of development in the Mediterranean basin:. The Hague: Mouton.
Belch, G., & Belch, M. 2012. Advertising and promotion: An integrated marketing communications perspective (9th ed.). New York: McGraw-Hill/Irwin.
Berkowitz, E. 2012. Marketing (3rd ed.). Homewood, IL: Irwin.
Foeken, D. 2006. “To subsidise my income” urban farming in an East-African town. Leiden: Brill.
Roberts, B. 2010. Borrowing costs. New York, N.Y.: International Federation of Accountants.
Tsopoulos, M., & S, T. 2011. Understanding the crisis: From boom to bust. Basingstoke, Hampshire: Palgrave Macmillan.