Section 2: Applied Theory

Qus.2. Companies that neglect the importance of scanning the business

environment are bound to fail in the long-term. In order to avoid failure, an
organization must understand the changes in the environment and respond to
them accordingly. In this context, discuss various factors of the PEST analysis to
be used for analyzing the external environment.

Ans. PEST Analysis (political, economic, social and technological) is a

management method whereby an organization can assess major external factors
that influence its operation in order to become more competitive in the market.

Political Environment

Governments policies determine the trade relationship with the various

countries. They also influence the business decisions and marketing strategies of
a firm. These factors are not controllable of any firms so they adapt to the
changing policies of governments, in the different countries they were operate.
Political environment has two factors as given below:

*Domestic policies

Organisation help political parties by funding elections, providing financial helps

to the candidates and running political advertisement. Considering the strong
relationship between politicians and marketers, therefore marketers are in a
position to lobby for or against proposed laws by governments, depending upon
the impact on their industries.

*International Policies

Multination national companies influence foreign governments through their

domestic governments. Trade alliance between countries increase the
opportunities for marketers. Political unrest affects the strategies of marketers
as they need to revamp their plans in the light of such happenings.

Economic Environment

The economic environment of a country is reflected by its GDP (Gross Domestic

Product). The GDP varies significantly between rich and poor countries due to
factors like production growth. GDP is also sometimes the indicators of the
standard of living in a county. The concept of purchasing power is helpful in
comparing the incomes of different countries. As goods and services are period
differently in different counties, purchasing power is used to measure the buying
power of the currency of a particular’s countries in term of standard
international measure (generally USD). The higher purchasing power of country
the more buying power it enjoys.

In a General economy conditions affect both companies and customers. During

economic recession, companies suffer lack of revue. On the other part economic
growth signifies as increase in revue for companies.

Social Environment

This is basically to the lifestyle, values, and beliefs of the customers. These affect
the plans of the marketers as they can pose both an opportunity and a threat to
them. For like, the increase in the number of working women has led to the
business opportunity of establishment day cares centres. On the other hand,
increase patronage towards super markets by customers, affects the business of
the local kirana stores.

Technology

Technology refers to the use of tools to conduct tasks, effectively. Marketers

should regularly apprise themselves about the latest technology in the county.

The following helpful factors of Technology as given below:

*Product: with the help of technology we can improve the product design and
reduce the production cost.

*Price: In a reduction of product cost due to use of technology, Price of product

have come down.

*Promotion: The advertisement in technology has opened up a number of

communication channel for marketers.

*Advertising: Technology as revolution in the way marketers advertise their

products in various platforms.

*Distribution: The technology advanced in the transportation industries has

helped bringing markets close.

*Customer can access any time anywhere through technology for relevant
information before making a purchase decision.
Qus.4. An organizations marketing is implemented in order to develop a positive
attitude about a company among its consumers. Taking cue from this statement
discuss the significance of organizational marketing.
Ans. Concept of Organizations Marketing:

Organisation marketing is basically done to influence the behaviour of focused

customers and help them to develop a positive attitude towards the organisation.
It’s not mattered that organisation is profitable or non-profitable they their
different reason for marketing. Better marketing of profitable organisation can
create a positive impact in the market which will provide a long-term profitability
for that organisation. For Non-profitable organisation (NGO’s etc.) also need to
marketed for motiving to them and influence to people to join as member and
contribute some fund to the organisations.

Majorly in Organisation Marketing the following steps are involves:

*Image Assessment
Basically, Organisation image depend upon the perception that the various customers
have about the organisation. Organisation can understand the perception of these
customers by planning a proper market research so this can help them to assessing the
image of organisation in the society. A positive image helps in growing the revenue of
the organisation. On the other part if a negative image will affect adversely. If the
customers are not satisfied with the products/ services or policies of the organisation
then it’s given negative impact of the Image of the Organisation. For instance, the
organisation has to make an adequate effort to change such perception. So can
organisation build a positive image among the customers.

*Image Controlling and Planning

An organisation should study and analysis the image it wants to create and prepared a
planning to build that image. If a service organisation desired image of a large,
innovative. etc, its need to work towards creating that image when the actual image is
completely different. The organisation should be focused on the various parameters
required to attain such image and improve its organisation structure in every form
(Employee’s wise and facilities wise). The positive image of the organisation should be
communicating to the all the customers/ consumer/ General public through
advertisement, press release etc. Also, organisation be ensuring that sustain the
positive image so a long-term basis. It should be regularly reviewed so, as to take
control measure in case any deviations found.