Environment_Paper

Environmental Factors Paper University of Phoenix Tanja Taylor MKT/421 Dec. 2, 2012 Mrs. Mary Hinds Environmental Factors Paper Environmental Factors Today, there are over 34,000 McDonald restaurants that are located throughout the world in over 119 countries (“McDonalds”, 2012.) McDonalds has 1.7 employees and 80% of its restaurants are franchised (“McDonalds”, 2012.) In 1940, Dick and Mac McDonald open the McDonald’s Bar B Q restaurant in Bernardino, California. In 1948, McDonald founded and opens as a self-service drive in restaurant. Hamburger was only fifteen cent in 1948. The menu only consists of nine items. In 1949, McDonald brought the World Famous Fries replacing the potato chips on the menu. By 1965, there were over 700 McDonald restaurants throughout the United States. In 1958, McDonald had sold 100 millionth hamburgers. McDonald had there first television commercial 35 one minute spot in 1966. Ronald became a big hit during the Macy Thanksgiving Parade. In 1967, McDonald goes International the first store open in Canada and Puerto Rico. The 5000th restaurant opens in Kanagawa, Japan in 1978. Spain, Denmark, and the Philippines open there first McDonald in 1981. McDonald extensive menu targets a range of customers. McDonald markets their products both global and domestic. This paper will focus on the environmental factor global and domestics marketing and the agreements and practices that affect the trade. In additional this paper will discuss the importance of demographic and physical infrastructure, influence of cultural differences, the importance of social responsibility and ethics versus legal obligations. Finally, this paper will discuss the effect of political system and the influence of international relations, the influence of local, nation, and international legislation, and the effect of technology. Environmental Factors Affecting Global and Domestic Marketing Decisions Business operation expenditures, resources, and income are economic factors that affect marketing decisions. Behaviors, values, custom, traditions, are all cultural factors. McDonald operates on four values: quality, service, convenience, and value. Many countries have different custom, traditions, and values. For example, in India cow are consider sacred. Therefore, in India, there is the Chicken Maharaja Mac an alternative for the Big Mac. Cultural ethnocentricity, the belief of one that it is inappropriate and immoral to purchase foreign-made products, could be a disaster for an organization trying to market their products (Armstrong & Kotler, 2011). Currency exchange rate is economic factors that can effect an organizations marketing strategy. McDonald must know the exchange rate of all the different countries. As for the British pounds, McDonald must price there Big Mac according. In the states, Big Mac is $4.00 then the British must have their 2.49 pounds. Consumer income and purchasing power, and other factor can effect the marketing decision. McDonalds must determine the average household income in a country and how that income is distributes in order to factor a nation’s purchasing power (Armstrong & Kotler, 2011). Influence of Global Economic Interdependence Global economic interdependence has greatly influenced countries and becoming more integrated through global trade. Societies are dependent upon other countries to produce goods and services in order to support their living conditions. McDonald provides jobs for individual in the other countries and the individual depend on a paycheck from McDonald. Impact of Trade Regulations and Practices Trade practices, laws, and agreements have been puts in place by Congress to protect competition and ensure the United States is a free and competitive economy (Armstrong & Kotler, 2011). These practices, laws, and agreements prohibit price-fixing, bid-rigging, trusts, monopolies, and anti-competitive conduct. In addition, The Robinson-Patman Act of 1936 prohibits price discrimination to purchasers of the same product (Armstrong & Kotler, 2011). Importance of Demographics and Physical Infrastructure Demographic information is in important for any organization when plans of opening a new business. Demographic information consist of the geographic area, age, income, race, gender, marital status, education level of individuals, etc. (Armstrong & Kotler, 2011). Organization determines the right customer for his or her product or service when using this information. McDonald needs to know the geographic location and race of individual within the country. McDonald must meet the needs of other country and race in order to stay in business. A physical infrastructure consists of intelligent devices, hardware, and software that manage power, control, communication, and security (“Business Management, 2012). Importance of Social Responsibility and Ethics versus Legal Obligations / Influence of the Foreign Corrupt Practices Act and Local, National and International Legislation Business culture is a factor that can affect ethic behavior in competition. The most common kinds of unethical behavior are bribery and economic espionage (Armstrong & Kotler, 2011). Spying on a company to obtain trade secrets and information and then selling that information to the company’s competitors is call economic espionage. The Economic Espionage Act of 1996 is a law that was enacts to prevent economic espionage. Businesses are now legally obligated to follow this law or face criminal punishment (Armstrong & Kotler, 2011). Bribery, mainly seen in business-to-business and government markets occur when individuals try to persuade the decision of an organization by presenting gifts, favors, and consultant fees (Armstrong & Kotler, 2011). In addition, the Foreign Corrupt Practices Act of 1977 makes it illegal for corporations in the United States to bribe foreign government officials in order to keep business in a foreign country (Armstrong & Kotler, 2011). Impact of Technology Over the years technology has improve the way business are operate. More and more consumers are growing with the new technology. Organizations can use data mining to specifically market their products to individuals based on internet search history (Armstrong & Kotler, 2011). Face book can be a good source of marketing your business. Most consumers used there cell phone to buy and sell and also to advertise and shop. And effective medium advertisement is using TV and radio. Reference Armstrong. G. & Kotler, P. (2011). Marketing: An introduction (10th Ed.). Upper Saddle River, McDonalds. (2012). Retrieved from http://www.aboutmcdonalds.com/mcd/our_company.html