The external marketing environment (Socio-cultural) - By Mitchell Formica

Socio-cultural and the environment it encompasses involves a number of different factors such as the beliefs, customs, practices and behaviour within a population. We perceive forces in society and culture as influences on our thoughts, feelings and behaviour. For some people drinking beer is an activity that encourages good feelings and it is their belief that they it must be a part of their everyday life.

The link between the socio-cultural environment and the consumption of beer is a part of our every day’s lives. ‘The pub and bar have been geographically widespread social settings in many societies, symbolically as well as physically and socially central to popular culture, and yet in many ways they are unique leisure locations, warranting more attention than the sparse research to date’, (Northcote, J, 2011). Nowadays more and more places are accepting BYO beer and allowing consumers a wider range of beer products available for purchase. This change in society is due to a demand for the product, as more and more people are starting to drink socially the businesses that don’t cater for this are at a disadvantage and may even lose customers.

In today’s society there are many festivals and public activities like markets that involve beer in their social circle. It is becoming a part of our culture to incorporate whatever we are doing with alcohol. Opportunities such as these will envelope the beer products within our society as not a bad health risk but a more of a social pleasure that can be consumed without risk.

However in future there may be more opportunities for beer as technology changes and through automation and robotics we could see the beer industry redevelop itself in-terms of producing the overall product.

There have always been threats for the beer industry as they are seen as a bad health risk for consumers. Ad campaigns for beer have recently moved away from promoting their product with perfect videos of the beer just sitting there, to a different setting that involves younger diverse groups sipping away on a nice beach somewhere with the sunset in the background. This change is due to negative influences on beer and the ad campaigns are trying to move away from promoting the beer to instead promoting a place that you would rather be in with a beer.  

References

Northcote, J, 2011, ‘Young adults’ decision making surrounding heavy drinking: A multi-staged model of planned behaviour’, Vol.72 (12), pp.2020-2025.

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The external marketing environment (Demographic) - By Mitchell Formica

The external marketing environment is made up of many different factors such as, social, demographic, economic, technological, political and legal. These elements categorise people and help marketers to segment and target an audience that they want to advertise to (Polonsky, M J, 2011).

The two environments I have chosen are demographic and socio-cultural. Within the beer industry there are many different types of brands that cater to different needs and wants. The beer market is mainly divided up into two different categories, gender and age. Beer is seen as a more mainly type of product so gender roles are a key factor when marketing beer toward a consumer. Also age is another determinate factor as there is a changing demographic and socio-cultural behaviour toward drinking beer.

The demographic environment is what makes up the characteristics of a consumer, it is based upon influences such as: ‘age, race, sex, economic status, level of education, income level and employment’ (Investopedia, 2014).  Demographics in marketing help to segment a market into different categories so that any given organisation can target towards a certain population. What organisations have learnt through demographics is that not all people are the same and they have different needs and wants that correspond to the same product. To combat this business’s market the same product in different ways with small variations like colour or size. In the beer industry there are normally two distinct categories that people get grouped into when being marketed, the wealthy and the average. These categories are based on income levels and using this edge marketers can appeal to whichever population they like. 

Simmons Market Research Bureau undertook a Study of Media and Markets in the article ‘The demographics of beer’, it is stated that the percentage of drinkers by age and gender for domestic regular beer like Budweiser is 72.1% of males and 27.9% for females. Imported beers such as Corona and Heineken have similar results ranging from 61.9% for men and 38.1% for women that drink corona and 68.4% for men and 31.6% for women that drink Heineken. Whilst in the age category between the ages of 25-34 the percentage of drinkers is only 28.2% for Corona and 24.8% for Heineken. As compared to an older age group that of 55-64 who drink much less with only 8.8% that consume Corona and 10.1% that drink Heineken (Beverage Dynamics July-Aug. 2005).

The opportunities for beer demographically are changing throughout time. Traditionally lower class men were the biggest consumers of beer as they would leave from there hard day of work to go to the pub. Nowadays there are more and more people drinking socially and it is becoming more prevalent in daily activities despite harsh laws on public drunkenness.

The opportunities for beer to spread over all demographics is becoming a reality as more and more people take part in the social leisure.

In recent years wine and spirits have become more prevalent in the alcohol market taking over the need for beer. However there is still a strong demand for beer products although breweries are finding it hard to promote new products and market to new audiences. The change from beer owning the majority of the alcohol market to wine and spirits taking over is due to younger and older generations that are drinking more wine and finding it easier to buy a shot of alcohol instead of drinking a whole beer. 

References

‘The demographics of beer’, Beverage Dynamics July-Aug 2005, Academic OneFile, Web, 26 Mar 2014.

Polonsky, M J, 10 Jan 2011, ‘Journal of Strategic Marketing, The incorporation of an interactive external environment: an extended model of marketing relationships, Vol 7, Issue 1, pp.41-55. 

Encyclopaedia, 2014, Demographics, Definition of ‘Demographics', Investopedia, Wednesday 26 march 2014, http://www.investopedia.com/terms/d/demographics.asp.

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Economics, Demand & Supply, & Perfect Competition, oligopolies, and Monopolies – By Mitchell Formica

Demand and supply can be seen in almost every market. To understand demand and supply we have to understand exactly what they are and what they do in a market. Demand concerns the person who is purchasing a product or service. The buyer has a certain need toward buying, the greater the need the more likely he/she will purchasing it. The biggest factor here is price, if a product that normally sells for $10 is sold at $15 the person will probably not want to buy it, as there is less of a demand due to the increase cost of the item. However, if the product that is normally sold at $10 is sold at $5 then there is a greater demand because the product is cheaper to buy. Supply on the other hand concerns the company that is selling a product or service. A hospital sells health care to patients, in this case the hospital would be the supply and the patient would be the demand. Although, the demand would be very high because people would rarely not pay for health care.

In different markets there are different types of demand and supply. For example in the apple market there is perfect competition. If there is a few fruit shops in the same area that are all selling apples at $3 each then for all shops to benefit from them they should all keep the price the same. This is because the people buying the apples would not be influenced by price and therefore be reluctant to go to any store. However, if one store changes the price from $3 to $2 then that store will earn more sales because the people will want to buy the cheaper apples. This situation is best known as perfect competition in which there are many firms that are all selling the same thing at the same price. There are to other types of markets I would like to talk about. Monopolies and Oligopolies.

A monopoly, like the board game is a market structure built around one big player that owns the full market share. The best way to picture a monopoly is to think of the board game, the aim of the game is to buy out the other players and own everything. Well just like in the game the market is based around one sole company that sells at its own price because there is no other competition. There is large barriers to enter the market which means that you will need power and wealth in order to take over in the market. This is normally hard as in most monopolies there is government approval needed and also a large customer base and big machines that are used by the companies. These are all things that are hard to come by which make it hard for other companies to enter the market. An example of a monopoly is the Saudi Arabian government’s ownership over the oil companies.

Oligopolies are like monopolies but have a small number of companies that own the market share. The best way to understand how an oligopoly works is to look at a situation in which oligopolies are present. Banks are a good example of an oligopoly because there are normally lots of little banks but only a few big ones that make up most of the market. These big banks are oligopolies just like airplane companies and oil companies are. They all have the same characteristics which are that they all sell the same thing and all have large barriers to entry. These companies normally try to balance the price however, if one does lower the price then the others will normally follow because they want an equal demand from the public.