Principles and practice Assignment Example | Topics and Well Written Essays - 1500 words

Principles and practice - Assignment Example Thus trends in external environment can have a major on consumer choice and preferences and therefore, it is important for marketers to be aware of such trends. Underlying trends are relatively slow moving changes in the marketplace that may occur for a number of reasons. A successful marketers needs to keep track of these changes and respond accordingly. The nature of the trends is likely to differ; sometimes they are consumer led and sometimes business led. However, businesses must realize that in order to gain a competitive edge and better satisfy the customers, these trends are needed to be taken into account. Macro factors are those that have an indirect impact on the business, also known as PESTEL. It includes factors that create opportunities and threats to business and is categorized as the far environment. These include variables such as political, environmental, socio-cultural, technological, economic and legal. With respect to marketers of cosmetics products, these factors play a crucial role and can have a significant impact on the industry structure. Political factors consist of laws, government agencies and pressure groups that influence and limit various organization action plans. For instance, legislation affecting cosmetics business has increased worldwide. Also, various laws exist that protects companies, consumers and interest of the society at large. And most importantly there is an increased emphasis from government, on socially responsible behavior. Concerning political factors from cosmetic industry’s point of view, unstable political conditions of the relevant regions can be troublesome for the business with respect to imports and exports. Moreover, an increase or decrease in tax rates can also impact the profitability of the business favorably or unfavorably. Environmental factors mainly include the surroundings, weather and climate change. With major climate change occurring due to global warming and with greater environmental a wareness, this external is becoming a significant issue to consider. It is particularly important to cosmetic firms as the industry involves many input material that may bring damage to the environment. Also products are susceptible to climate changes, and thus need thorough analysis. Concerning environmental factors, firm can create value and better satisfy customers by adopting environmental friendly approach. This would help firm avoid legal costs and increase its goodwill. Moreover, use of natural ingredients, preferred by the consumers also adds value. Change in social trends can impact the demand for a firm’s products. Aging population, income groups, lifestyle and social class highly affect cosmetic demand. Thus, social factors affect the customer needs and size of potential market. With changing fashion trends, increased awareness and better life styles, demand for cosmetics is likely to increase. For instance, an increased awareness amongst men may lead to an altoget her new cosmetic line. Similarly, aging population is likely to increase demand for anti-aging cosmetics. New technology creates new products and process. It tends to impact both the business process and the final offering. With the advent of internet for instance, the distribution channels have become virtual with cost efficiencies for cosmetic industry. Other innovations include bar coding and computer aided design that enables companies to keep track of its customer preference and offer innovative designs, respectively. Technology, thus can