Environmental Factors Paper

Topics: Marketing plan, Marketing, Foreign Corrupt Practices Act Pages: 5 (1354 words) Published: March 24, 2014

Environmental Factors Paper
Elizabeth McUne
December 16, 2013
Creig Foster

Environmental Factors Paper
This paper will discuss the environmental factors that PepsiCo faces. These factors effect both the domestic, and global marketing the company does. Factors such as trade practices, demographics, cultural differences, and the Foreign Corrupt Practices Act of 1977 will all be discussed, as well as other factors that affect PepsiCo, and their marketing decisions. Trade Practices and Agreements

An environmental factor is an identifiable element to the physical, cultural, demographic, economic, political, regulatory, or technological environment that effects the survival, operations and growth of a company (Dictionary.com, 2013). The globalization of companies in today’s market has led to an economic interdependence that influences decisions made by companies doing business overseas. This environment means the success or failure of one company may mean the success or failure of another; the same can be said for economies. This global economic interdependence is consistently reinforced by free trade agreements between countries. When trade barriers are lowered it allows companies to remain dependent on one another. When barriers are increased, such as higher tariffs on imports, some companies might have to drop out of the race, which effects other companies in those markets. Currently PepsiCo is represented in over 200 countries (PepsiCo, 2013). The decisions PepsiCo makes influences and impacts the economies it operates in. For example, PepsiCo supports local farmers in Mexico, by buying their corn to make their products. PepsiCo’s decision in that market has led to the production of jobs, and more money in the economy (Strom, 2011). Demographics

Demographics is another factor that can affect the marketing decisions of a company. When entering a foreign market, the people in that demographic must be considered. Age, population size, education, and even religion can be factors that will influence the success of a product in a new market. Demographics are what will help to identify and define a target market, and PepsiCo will want to ensure their products will reach the right people in the global markets, and the right products will be offered there too. Wilson (2009) states that it is critical to know your target market when crafting a business plan; understanding the target customers’ demographics will help to determine what the products you offer will be and what tactics will work best. PepsiCo will often use locally grown food to make its products, which not only helps their production, but helps market themselves in the foreign economy as a company that wants to give to the economy not just take from it. Cultural Differences

Cultural differences between counties can make it necessary for companies to have multiple marketing strategies. One strategy will not blanket every country a product is marketed in, especially in the case of PepsiCo; operating in over 200 countries. It is important that the cultural differences are considered for the target group in each market, if they are not the strategy will not work, or could backfire completely. Not considering the cultural diversity of the counties PepsiCo operates in could be costly and embarrassing for the company. Considering these differences can alter product color, packaging, advertisement, and many other factors. Social Responsibility and Ethics

Every company has some responsibility to the society it operates in. Taking an active interest in the community, and not just serving the laws it has to abide by shows a true service attitude for the company, and can help to improve the support it gets from the community, and the economy of the place it serves. The global market today is led by companies that not only concern themselves with the sustainability of their product and service, but...

References: PepsiCo. (2013). Company. Retrieved December 14, 2013, from http://www.pepsico.com/Company/Our-Mission-and-Vision.html 
Peterson, T. (2011). Brands Must Embrace Digital to Remain Relevant: Social Consumer 2011. Retrieved December 14, 2013, from http://www.dmnews.com/brands-must-embrace-digital-to- remain-relevant-social-consumer-2011/article/198979/ 
Strom, S. (2011). For Pepsi, a business decision with social benefit. Retrieved December 14, 2013, from http://www.nytimes.com/2011/02/22/business/global/22pepsi.html?_r=2&pagewanted=pr int 
Wilson, E. (2009). Know Your Target Market. Entrepreneur. Retrieved December 14, 2013, from http://www.entrepreneur.com/marketing/article202334.html
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