Pepsi: Environmental Factors

Environmental Factors
Antonio Presley
University of Phoenix
August 31, 2009
Abstract
Every organization has rules, regulations, and guidelines that help govern the conduct of the employees, global and domestic marketing decisions, and environmental factors. PepsiCo, success can be affected by an internal or external environment analysis. An internal or external environment analysis is an analysis of the target market for a company's goods or services that can provide understanding of environmental factors that need to be addressed for a products success. Even major Companies like Pepsi are affected by these factors. When considering the importance of the factors that affect marketing an organization plan it are necessary to note that the environment and market can be very complicated and are in the majority of instances ever changing.

Environmental Factors Every organization has rules, regulations, and guidelines that help govern the conduct of the employees, global and domestic marketing decisions, and environmental factors. Environmental factors are often divided into two categories namely macro environment and microenvironment. In addition, environmental factors can be political, social, ecological, cultural, technological, and ethical in nature. Whereas, any organization that develops a product or service domestically or globally must consider the impact each of the environmental factors may have. For instance, factors can result in the failed attempt to market a product, which may be successful domestically, in other countries where there is a significant market potential. Furthermore, this essay will identify the environmental factors that affect global and domestic marketing decisions, impacts of technology, and the importance of social responsibility and ethics as related to PepsiCo marketing. PepsiCo is a world leader in convenient snacks, foods, and beverages with revenues of more than $39 billion and over 185,000 employees, which conducts both domestic and global marketing(PepsiCo, 2009). At the same time, PepsiCo is committed to protecting there natural resources and operating in a way that minimizes the environmental footprint, with the goal of reaching a net-neutral impact. In addition, as a multinational company, PepsiCo value the unique contributions and perspectives that people from different culture bring to there business. Therefore, the company continues to promote diversity and believe they have a responsibility to ensure the health and wellness communities they serve (PepsiCo, 2009). PepsiCo, success can be affected by an internal or external environment analysis. An internal or external environment analysis is an analysis of the target market for a company's goods or services that can provide understanding of environmental factors that need to be addressed for a products success. High-level domestic and global environmental factors that may affect the organization's marketing decisions are political, social, ecological, cultural, technological, and ethical. When considering the political factors that affect marketing plan it is necessary to note that political environment can be very complicated and is in the majority of instances ever changing. In contrast, social factors can affect PepsiCo domestic and global marketing decision because it influences a customer’s buying behavior. For example, according to the Tutor2u (n.d) Web site, when dealing with social factors several individuals may interact to influence the purchase decision (initiator, influencer, decider, buyer, and user). However, the ecological factors can also affects PepsiCo marketing because more companies, organizations, and consumers are trying to eliminate or minimize waste by avoidance and prevention. Armstrong and Kotler (2005) stated, “Companies emphasizing prevention have responded with “green marketing” programs—developing ecologically safer products, recyclable and biodegradable packaging, better pollution controls, and more energy-efficient operations” (Chap. 16, p. 573).In addition, researchers and consumers have find the products to be both green and competitive. Besides the global environmental factors, that affect PepsiCo marketing decisions the company should also be aware of the culture and technology that could also affect marketing. Culture impacts the organization is marketing decisions because many countries feel that certain type of American exposures to products erodes values and of other cultures and westernizes the world. Other issues culture can affect are marketing decisions and being able to adapt to other countries’ business cultures and deal effectively with foreign nationals (Armstrong & Kotler, 2005). On the contrary, technology affects marketing tremendously. Armstrong and Kotler (2005) stated, “Technological advances in every area, from telecommunications, information technology, and the Internet to health care and entertainment, provide abundant marketing opportunities” (Chap.16, p.573). PepsiCo importance of social responsibility and ethics as related to the organization’s marketing is very substantial. The organization has taken vigorous steps to encourage kids to lead healthier lives and to provide their parents more tools to make healthier choices (PepsiCo, 2009). Whereas, the company understands the importance of providing nutritious foods and physical activities for children. In addition, they also understand the obstacles preventing parents from making the healthy choice. Since PepsiCo introduced the Smart Spot in 2004, they made it easier for consumers to identify products that contribute to a healthier lifestyle in the U.S. Therefore, the Smart Symbol (the symbol of smart choices made easy) is a simple labeling system that explains why each product is a smart choice (PepsiCo, 2009). Furthermore, this symbol is the only industry symbol that meets nutrition criteria based on authoritative statements from the U.S. Food and Drug Administration and the National Academy of Sciences. Today, more than 300 different products carry the Smart Spot label (PepsiCo, 2009). In conclusion, environmental factors affect global and domestic marketing decisions by affecting the political, social, ecological, cultural, technological, and ethical of the organization. Even major Companies like Pepsi are affected by these factors. When considering the importance of the factors that affect marketing an organization plan it are necessary to note that the environment and market can be very complicated and are in the majority of instances ever changing.

Reference
Armstrong, G., & Kotler, P. (2005). Marketing: An Introduction. [University of Phoenix Custom Edition e-Text]. , : Prentice-Hall. Retrieved August 31, 2009, from University of Phoenix, MKT421.
PepsiCo. (2009). Performance with Purpose. Retrieved August 31, 2009, from http://www.pepsico.com/Company.html
Tutor2u. (n.d). buyer behaviour - social factors. Retrieved August 31, 2009, from http://www.tutor2u.net/business/marketing/buying_social_factors.asp
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