Environmental Changes To Marketing Mix

Forces in the marketing environment that lead to changes in the past 5 to 10 years to the company's marketing mix:

The different aspects of the marketing mix will be assessed with regards to the forces in the marketing environment for ice-cream and food retailer, the Swenson's Group ("the Company") operating in the Thai market. The context in which the changes in marketing mix will be examined will be based on their products, eg: ice-cream and food Ð'- economic and the services, eg: customer service, retail premises etc.

Describe more about the company/product.

PROMOTION: The Company's traditional promotion of its products and services was via the usage of media, ie: television and radio, as these were the pre-dominantly significant mode of advertising for the past 5-10 years. With the advent of the internet technology, the Company has changed its promotion modes using websites which has a global reach and relatively costing lesser.

PHYSICAL EVIDENCE: The demographic changes from the late 90's evidences the increase in middle class population. This middle class segment would ideally be a bachelor degree holder with a fixed monthly salary. The increase of middle class society with a higher disposable income, would prefer to enjoy their ice-cream in more upmarket restaurant premises, which combine the elegant-ness of a traditional restaurant combined with the casual outlook of more middle class dÐ"©cor without looking very "arrogant", ie: an oulook which welcomes rather than restricts only to certain class.

PRODUCT: Although the Company is famous for its ice-cream, introduction of food/snacks combined with ice-cream would increase the chances of a combined and multi dining options, where customers are given the option of consuming food and ice-cream rather than just ice-cream, which effectively makes it a one-stop food centre.

PROCESS/Political Legal: The changes in local laws in order to encourage in small/medium industries resulted in the growth of the franchising industry. Currently there exist approximately 150 franchise businesses in Thailand in which the majority of which is in the food and restaurant business (*Franchising Basics in Thailand Ð'- Edward J. Kelly / Sriwan Puapondh Ð'- Tilleke & Gibbins International Ltd, September 2002). The Department of Internal Trade under the Ministry of Commerce has structured local legislation such as the Civil and Commercial Code, Trademark Act 1991 amended 2000 and Trade Competition Act 1999 to favor growth and expansion of the franchising business by providing, amongst of advantages, patent/intellectual property protection, preferential tax treatment, territorial protection etc. The favourable changes in the political/legal environment prompted the Company to expand business location throughout the country without the need to invest in heavy capital investment, whereas during the mid to late 1990's the business operations of the Company was only limited to its own owned/operated premises/location. The protection accorded by the intellectual property laws meant, franchisors risk of technology/patent theft is relatively low, thus encouraging the promotion of its business via franchising through advertising and trade circles, whereas the historical promotion focus would be on selling the products itself, ie: ice-cream. Hence it is evident that the political/legal changes in the marketing environment has significant impact of the marketing mix aspects of place and promotion.

Economic Forces: The last 5 years evidenced a significant increase in the upper and middle class income group with a higher disposable income in the city of Bangkok, which demands a higher quality product/service where price is not the prime consideration. A typical middle income group would be classified as a monthly salaried individual possessing a basic college degree or a dual earning household where both spouses would be monthly salaried.

In October 2002, 15% of the total 65million population of Thailand live in Bangkok. The average income of the middle class group (based on single earning spouse) residing in Bangkok is US1,500 with an expenditure of US1,000. Equivalent statistics today shows an increased by 25%. (*Asian Market Research News Ð'- October 2002). The implications of such increase in the middle class income group means this particular group would be targeted by most business, ie: target marketing. The demand for quality products/services would outweigh price considerations. The Company, capitalizing on the exponential growth in this segment has adopted the following changes to their marketing mix aspect of Price and Products.

PRICE: A typical customer in this market segment would demand quality products / services. The Company over the past years have increased the quality of their ice-cream duly enhancing its taste, by the usage of better quality raw materials, eg: milk, flavouring, in their products. Though this would increase their base production cost, profit margins are enhanced by charging customer a premium for making available quality ice-cream. The premium charged would be relative to the cost of dining at fast food chains such as McDonalds, Burger King etc. What would previously be considered a basic priced item in the market would now be premium priced to provide the perceived value to the targeted market segment.

PROCESS/PLACE: A customer who pays a premium to dine at a Swenson's retail outlet would desire a conducive, pleasant yet stylish dining environment. Swenson's have adopted retail outlets which display a pleasant ambience, family environment and elegant dÐ"©cor befitting the middle class income earner and his family. The objective behind this particular styled outlets would be to attract the targeted customer, ie: middle class as opposed to younger customer who would prefer to "hang out" at relatively more open and crowded premises, ie: McDonalds, Burger King. The objective here being stylish, practical and relatively private in comparison to open and public in one extreme or exclusive and "arrogant", being used in the context to cater for high income earners considered the upper class.

PRODUCT: In line with the desired outlook of the retail outlets, the Company diversified its product mix from serving purely ice-cream