Impact of a Brand on Consumer Decision Making Process - Assignment Example

INTRODUCTION TO MARKETING Impact of the environment on marketing strategy The success of a business entity is influenced by internal, as well as external factors. An organisation, therefore, will always develop strategies that will make it manipulate these factors to its advantage. According to an analysis done by Learn Marketing.net (2015), besides understanding these factors, a successful organisation goes ahead to forecast changes within its operating environment in order to take advantage of them. The external environment is analysed through PESTLE analysis1. Political factors These refer to those factors that are executed by the state or government and affect the economy in general and business in particular. These include government rules, regulations and policies that impact on the business environment. According to Georgiev’s (2013, p. 4) study, these policies and regulations include tax policies, trade and labour laws, trade restrictions, tariffs, environmental laws and regulations, infrastructure and development policies. On the same note, political stability is also a critical factor that affects both the economy and the business. From these factors, it is clear that the political factors impact on the daily operations of businesses. This requires that businesses prepare to respond to the current, as well as anticipated future legislations, in order to adjust their marketing policies accordingly. Economic factors These factors relate to the economy and affect how an entity conducts its business and their profitability. These factors include inflation, interest rates, exchange rates, economic growth, and disposable income of consumers and businesses. An entity has no control over these factors, and it only adjusts its business strategies, commercial and financial policies to benefit most from the prevailing economic conditions. Social factors These denote the social-cultural factors and include the shared beliefs and attitudes and can affect the business strategies positively or negatively. They include the demographic aspects such as religious beliefs and social stigmas, age distribution, employment and income statistics, education and career trends, overall general attitude, and population growth rate. These factors have a great impact on the operation of an entity since poor strategies, especially those which go against the societal norms face opposition, criticism protests and even negative publicity. A marketer must, therefore, understand individuals based on age as well as the whole society and what drives them to making a purchase. Technological factors These factors are brought about by the technological landscape changes in the modern business environment. From a wider scope, these factors include the level of technical advancement and available in the current times, the rate of technological progress, technical facilities and infrastructure, and research and development activities. These factors affect marketing and the management because new methods of production and distribution of goods and services need to be developed as well as new means of communicating with target markets. Legal factors These factors take the form of legislations developed and imposed on business by various governmental and other regulatory agencies. They may be in the form of equal opportunities, health and safety, advertising standards, product labelling, product safety and consumer rights and laws. To trade successfully, companies must know what the law requires of them. Environmental factors These are factors that have been recently enjoined in the study of macro environmental factors that affect the operation of businesses. These involve population targets, the scarcity of raw material, the need to carry business in an ethical and sustainable manner. Marketers are thus required to ensure that the products they are selling are ethically sourced, and they observe the environmental issues such as participation in social corporate responsibilities. Branding and consumer behaviour Branding has become an integral part of the modern day marketing strategies. As a result, organisations are now viewing it as its principal asset (Abdul-Aziz, 2014, p. 1). According to the Entrepreneur Media, Inc.’s (2015) evaluation determined that the brand is the entity’s promise to its customers. It serves to tell them what they should expect from its products and services, and it is intended to differentiate its offerings from those of its competitors. Lake’s (2015) study states that a brand may be a sign, name, symbol, term, design or a combination of them whose intention is to identify and differentiate goods or services of an entity from those of a competitor. It is aimed at making prospects see a given entity as the only one that can offer them a solution to their competitors. A good brand is aimed at achieving these objectives: delivering the message clearly, motivating the buyer, confirming an entitys credibility, connecting the target prospects emotionally, and concreting use loyalty. Balmer’s (2013, p. 725) study found that the brand adopted by an entity should have a corporate brand orientation, product brand orientation, and omni-brand orientation perspectives. Consumer behaviour is defined by Kpikpi’s (2015) study as the behaviour displayed by consumers in searching, purchasing, using and evaluating products that they expect to satisfy them before disposing them. Brands will always represent the consumers perception and opinion on the ability of a product to perform. A good brand will make the company free from constant price wars and thereby reduce their marketing costs. This will make this brand reside in the customers mind. Since the brand differentiates a product from that of competitors, it becomes of highly accepted by customers who never fail to buy it. In addition, a brand with high awareness commands a high level of brand loyalty (Kpikpi, 2015). Three elements of the extended marketing mix This refers to the 3Ps that were added to the traditional 4Ps for the purposes of service marketing and include the people, process and physical evidence. By the use of the right people, an entity can reach a target market because customers will make a judgement about service provision based on the people representing an organisation (Learn Marketing.net, 2015). These people will be required to possess the necessary interpersonal skills, service knowledge and aptitude in order to deliver quality services. The process entails the systems used to offer and deliver the services to the target customers. The process should always be consistent and efficient to gain customers’ loyalty. The physical presence of the marketing mix deals with where the services are being delivered from. This element serves to distinguish an entity from its competitors. The target customers will make a judgment about an entity based on the physical evidence. Findings that Tesco PLC can use to improve its marketing Application of PESTLE analysis to Tesco PLC Political factors As a globalised retailing company, Tesco Plc. has its operations in other countries such as the Republic of Ireland, Hungary, Turkey, Czech Republic, Slovakia, Poland, South Korea, Japan Thailand, Malaysia and Taiwan. In the course of its operations, Tesco is influenced by the political as well as the legislative conditions of these countries. Its performance is also influenced by laws and of the European Union (EU). The factors affecting it are in the form of acts of legislation, tax rates, and, of course, the stability of these countries. Because of the financial hardships and instabilities that are being experienced across the world, many governments have developed employment legislations requiring retailers to create jobs for their population. By responding to these legislations, Tesco Plc. should create employment opportunities and that will in turn help it increase demand for its products. Economic factors These are the main factors that are of great concern for Tesco Plc. because they affect its costs, demand, profits and prices. Tesco should be particularly concerned about the increasing unemployment rates that have led to a drastic decline in disposable income and household income levels. Consequently, this has led to an effective decrease in demand for most of its products making it reduce its production. Tesco has no influence over these economic factors, but their impact on its performance and the marketing mix are profound. From the economic downturn, Tesco has experienced dropping earnings from other segment and now primarily relies on the UK market and in case of its slowdown, it will be badly affected. Therefore, the necessary marketing strategies should be adopted by Tesco Plc. Social-cultural factors The retail customers are indicating a variety of social changes with the trend in the UK indicating that they have moved towards one stop shopping and bulk shopping. To take advantage of these changes, Tesco should adjust itself by increasing the number of non-food items for sale. In addition, Tesco PLC should adopt the retailing curve of a seamless blend of bricks and clicks and abandon bricks and mortar. Driven by the accelerating shift to online shopping, Tesco PLC should prioritize on establishing multichannel leadership in all its markets so as to adapt to the changing customers’ behaviour, meet their rising expectations of retailers and enable them to shop however, wherever and whenever they want. In making their choices on what to buy, these customers are influenced by the attitudes and beliefs. In addition, the demographic changes in terms of aging population, increased female workers and a decline in home-made food, Tesco Plc. should focus on foodstuffs. Therefore, the type of goods and services that customers demand is influenced by their social conditioning as well. Since consumers are becoming aware of health issues, they have their attitudes towards food changing constantly. As such, Tesco should increase its product mix by offering organic products whose demand has increased. Technological factors Through embracement of technology, Tesco Plc. should be able to develop many products. The technology will benefit both the company and its customers. Through technology, customers’ satisfaction will be achieved because goods will be readily conveyed at their reach, shopping will be made more convenient and Tesco Plc. will be able to offer personalised services. As stated by Valos and Vocino’s (2006, p. 18)study, strategic nature of distribution channels should be well-established so as to add value to the conveyance of products and services to the consumers, this report suggest that Tesco Plc., develops distribution channels that will serve its customers better. Among the channel through which Tesco Plc. should use in offering its products include stores, restaurants, online and at its bank. Through these channels, its loyal customers will be able to have a seamless experience and spend more shopping across them. Among the technologies that Techno should continue using include intelligent scale, wireless devices, self-check-out machine electronic shelf labelling, and radio frequency identification. Besides, it should use electronic point of sale, electronic funds transfer systems and electronic scanners, which have significantly improved the distribution efficiency and stocking activities. Legal factors There are several legislations that will directly affect Tesco such as the Code of Practice that was given by the Food Retailing Commission (FRC) banning many practices such as changing prices without notice. Tesco should precisely follow its provisions as well as other legislations for it to continue its operations without disruptions. Environmental factors From the increased pressure on companies to redress and address environmental issues and undertake activities that benefit the society, Tesco should be involved in community activities. It should also work on minimising waste products. Its marketing force should take some initiatives in the course of their marketing to increase social conscience in customers. Use of brand and customer behaviour by Tesco Plc. Tesco PLC should realize the benefits that come with a good brand. Besides its Clubcard, this report suggests that Tesco PLC uses other brands that enable it to offer a differentiated, personalized offers and give customers the opportunity to unlock greater value for themselves. Tesco PLC already has the customers at heart and is using the power of the Clubcard to personalize how it communicates with and saves its customer, giving those offers and services that are relevant and tailored to suit their way of living (Tesco PLC, 2014, p. 4). Tesco PLC reported that in the year 2013/2014, it was able to use the Clubcard to deliver more value for its customers and delivered over 60 million personalized mailings for its products that consumers buy frequently. Tesco PLC launched the Club Fuel Save; that is a completely new concept in the UK retail industry, to enable its customers to earn money off their fuel, simply by doing their regular shopping. Through the use of Club Fuel Save, Tesco PLC hopes to improve the customers loyalty because it understands that greater loyalty delivers greater lifetime value (Mollah, 2014, p. 38). Green and Chen’s (2010, pp. 2-3) and Balmer’s (2010, pp. 183-187) studies note that brand awareness and equity are critical to developing customers loyalty. Therefore, the marketing strategies of Tesco PLC., should include unique brands in order to influence many customers. Three elements of the extended marketing mix The service marketing mix will be imperative in the course of marketing Tesco PLC.’s services and products to its current customers and target market. Tesco PLC., should ensure that it has recruited the right staff and train them in order to create a competitive advantage. These people should be able to offer quality services in order to win customers’ loyalty since it is only the interactions that customers will judge Tesco PLC., the firm should train its staff on the interpersonal skills and ensure that they have the required knowledge to deliver quality services. Tesco PLC., should appreciate that process starts long before the services are actually experienced. The process chosen should be right and fit with other marketing mix tools. Through the process element, this report advises Tesco PLC., to develop systems for use in the course of delivery of services. It should realise that the process through which services will be delivered is key to customers’ satisfaction. As a retailer, Tesco Plc. is advised to embrace the marketing mix of physical evidence. Tesco Plc. can use this to charge a premium price for its services and establish a positive experience. References Abdul-Aziz, B., 2014. Impact Of A Brand On Consumer Decision Making Process. Master Thesis. Vasa, Finland: Vaasan Ammattikorkeakoulu Vaasan Ammattikorkeakoulu. Balmer, J.M.T., 2013. Corporate brand orientation: What is it? What of it? Journal of Brand Management, 20 (9), pp. 723-41. Entrepreneur Media, Inc., 2015. Branding. [Online] Available at: HYPERLINK "http://www.entrepreneur.com/encyclopedia/branding" http://www.entrepreneur.com/encyclopedia/branding [Accessed 4 May 2015]. Georgiev, I., 2013. Pestle analysis of Tesco PLC. Master Thesis. Prague, Czech: Czech University of Life Sciences, Prague Czech University of Life Sciences, Prague. Kpikpi, S., 2015. The Impact Of Branding On Consumer Decision Making In The Ghanaian Telecommunication Industry; A Case Of Expresso. [Online] Academia.edu Available at: HYPERLINK "https://www.academia.edu/6969614/THE_IMPACT_OF_BRANDING_ON_CONSUMER_DECISION_MAKING_IN_THE_GHANAIAN_TELECOMMUNICATION_INDUSTRY_A_CASE_OF_EXPRESSO" https://www.academia.edu/6969614/THE_IMPACT_OF_BRANDING_ON_CONSUMER_DECISION_MAKING_IN_THE_GHANAIAN_TELECOMMUNICATION_INDUSTRY_A_CASE_OF_EXPRESSO [Accessed 4 May 2015]. Lake, L., 2015. What is Branding and How Important is it to Your Marketing Strategy? [Online] Available at: HYPERLINK "http://marketing.about.com/cs/brandmktg/a/whatisbranding.htm" http://marketing.about.com/cs/brandmktg/a/whatisbranding.htm [Accessed 4 May 2015]. Learn Marketing.net, 2015. Service Marketing Mix (Extended Marketing Mix). [Online] Available at: HYPERLINK "http://www.learnmarketing.net/servicemarketingmix.htm" http://www.learnmarketing.net/servicemarketingmix.htm [Accessed 4 May 2015]. Learn Marketing.net, 2015. The Macro Environment & Pest Analysis. [Online] Available at: HYPERLINK "http://www.learnmarketing.net/pestanalysis.htm" http://www.learnmarketing.net/pestanalysis.htm [Accessed 4 May 2015]. Valos, M.J. & Vocino, A., 2006. An integrative marketing channel performance measurement framework. Journal of Database Marketing & Customer Strategy Management, 14 (1), pp. 17-28. Read More