Marketing Determinants: Economic Factors and Business Size
Economic Situation and Marketing Plans
The global economic situation at national and regional levels is one of the determinants of marketing plans, with clear implications for global enterprises. A higher cost of money leads to a selectivity of investment and expenditure, fully affecting marketing. Nationwide, an inflationary situation amplifies any marketing efforts, increasing positive results, while in periods of recession, the impact is unfavorable. An alternative in the latter case is to reduce stock volume, improve waiting times for greater efficiency, or increase efforts to compensate for external circumstances.
What is relevant for the analysis of the situation as a determinant is the need to understand its evolution to avoid dangerous optimism about the strength of our plans, whether judged by results in inflationary times or discouraging pessimism in times of stability or regression.
Internal Determinants: Company Features
An analysis of the surface determinants of marketing can lead to the erroneous conclusion that all of them must necessarily be external. It might appear that all internal variables are manageable. However, reality shows that this assumption is not true. From a marketing perspective, several company features are fixed enough that the marketing director should consider them influential in their decisions, as well as external determinants.
Marketing techniques and their results will vary between a large international firm and a small local or regional company. Every company has features that distinguish it from others. Among them, we will examine:
- Dimensions
- Product margins
- Clientele structure
- Available resources
- Basic beliefs of management
Each of these encounters conditions that influence the results of marketing activities, which is precisely what is meant by determining marketing.
Size of Business and Marketing
A main issue is the impact of company size on marketing. Consider two situations:
Marketing can be a major investment for the company. Often, the strength of recruitment marketing techniques creates a market whose size is more than a small or medium enterprise can serve. In fact, marketing techniques that ensure the consumer requires the presence of a brand in every sense of the market require production at the level of large series, low costs, and broad reach. In this way, marketing techniques favor big business.
The different needs marketing awakens act in the market. Meeting these new consumer needs is more affordable for small and medium enterprises than large ones. So, marketing, while discovering and promoting new forms of consumer service independent of the brand, leads to a specialization of the company that favors small and medium-scale.
In short, marketing is a technique that favors small and medium enterprises as soon as it knows how to differentiate its product or service through specialization for new customer satisfaction regardless of the brand. By contrast, marketing is not economically viable for small and medium enterprises when trying to differentiate their output from the competition by relying exclusively on the mark.
Mergers, Partnerships, and Joint Ventures
The term “merger” brings together a diverse range of economic and legal figures to potentiate the strength of two or more companies into a larger unit to get the benefits expected of all joining forces. Integration occurs when at least one of the companies loses its legal personality, while the company resulting from the integration holds or acquires full personality. Integration can take two forms: merger or consolidation.
When all companies lose their personality after giving birth to a new society, we are in the course of mergers, while absorption occurs when a business keeps its personality, the acquiring company, while the acquired companies lose theirs.
The terms partnership and joint ventures are synonymous, designating that kind of concentration in which none of the companies abdicate their legal status but give birth to a third company at the same time endowed with distinct personality.