Marketing Environment, Market Segmentation, And SWOT Analysis

Factors influencing the effectiveness of marketing strategy

Marketing environment refers to the factors, which influence the effectiveness of the marketing strategy. These factors are mainly macro factors including the political, economical and cultural factors. The approach of the marketing strategies depends on the situation of these environments where the organizations are operating (Latif, Islam and Noor 2014). Thus, it is important for the business organizations to have the proper understanding about the marketing environment where they are operating and should initiate the marketing strategies accordingly.

Changes in the demographic, cultural and economic environment can have influence on the decision making process of any business organizations including the United airlines. Changes in demographic segmentation can affect the United Airlines due to the reason that changes in demographics means changes in the targeted age groups. If the target age groups of United Airlines are between 25 and 35, then the marketing approach is also being designed according to the taste and preference pattern of this group (Ajagbe et al. 2015). However, with the change in the demographic environment, maybe the older age groups get increased and United Airlines have to change their targeted age groups. Thus, the taste and preference pattern of the targeted customers will get changed and it will change the approach of marketing of United Airlines. On the other hand, changes in the cultural environment will change the preference pattern of the customers. This is due to the reason that United Airlines is having their marketing approach in accordance to a particular target segments and adhere to the cultural elements of this particular group only (Leeflang et al. 2014). However, with the changes in the cultural environment, the cultural factors such as food habit will get changed and United Airlines should have to initiate new approach. Changes in the economic environment due to the reason of economic recession or emergence of new competitors will affect the profitability of the United Airlines. Thus their marketing decision approach will also get changed.

Market segmentation is the process of classifying the entire market in different sub groups in terms of different variables. This helps the business organizations in short listing the target customers in accordance to the approach of the organizations. In the current business scenario, customers are more diverse in nature with having different social and cultural variables (Cross, Belich and Rudelius 2015). Thus, it is difficult for the contemporary business organizations to meet the diverse requirements and expectations of the customers with their respective products or services. In this case, market segmentation helps them to divide the markets and target only those, which are getting matched with characteristics of the business organizations.

Impact of changes in demographic, cultural, and economic environments on business organizations

Market segments refer to the target customer groups, which are the classified sub groups of the entire market. Market segments are being selected based on different variables such as demographic, psychographic, behavioral and geographic. Among the all the target customers available for the business organizations, business organizations select only the particular target segments for targeting them in the further stage (Venter, Wright and Dibb 2015).

Targeting is the secondary step being initiated by the business organizations after segmenting the customer groups. This refers to the process of initiating generic strategies for the particular target segments to attract them towards their service or product (Haenlein and Libai 2013). Positioning is the last step, which refers to the process of placing the product in the market on the basis of a particular competitiveness. This helps to create a particular brand recall value among the customers.

United Airlines mainly used the psychographic segmentation for their business growth. This is due to the reason that customer segmentation through the psychographic variables helps them to determine the lifestyles and interests of the customers irrespective of demographic variances. In according to these, United Airlines provide their services and meet the interests of the customers enhancing the level of satisfaction among them.

Swot analysis is one of widely used and most common tools for evaluating the internal or micro factors of the business organizations. The major objective of this tool is to discuss about the major positive and negative factors for the business organizations along with their impact. It helps the business organizations in identifying the advantages for them along with the limitations (Bull et al. 2016). Thus, the business organizations can design their organizational strategies based on the positive factors and target to overcome the negative factors. This will in turn enhance the internal competencies of the business organizations in the long term.

Swot analysis is having major four components including strengths, weaknesses, opportunities and threats. Different competencies of the business organizations are being aligned with that of these four components. The first component is strength. This refers to the advantages being gained by the particular business organization, which helps them to stay ahead in the competition. Furthermore, the next component is weaknesses, which refers to the areas where the business organization is trailing behind other competitors in the market (Ayub et al. 2013). The next component is the opportunity, which refers to future positive factors that will have favorable impact on the business organization. This component of the swot analysis helps the business organization in identifying the future opportunities and can design their strategies accordingly. The last component is the threat, which refers to the future negative factors that may pose challenge for the business organization in the future. This helps them to identify the factors and strategize to overcome them. Thus, all the four components of swot analysis are helping the business organizations in having the fair understanding about the positive and negative factors and they can design their organizational approaches accordingly.

Strengths	· Brand value of United Airlines is huge due to their business presence from large number of years. · Having their presence in more than 26 countries across the world is helping them to cater to larger customer segments. · Having access to huge financial resources, which is further helping them to develop their business strategies over their competitors.
Weaknesses	· Higher operating cost compared to some of the newer entrants in the market. This is affecting their profitability (Armen 2013). · Having their presence majorly in the tier I locations. This is limiting their potentiality. · Do not offer diverse service such budget carrier services (Wittman 2014).
Opportunities	· Tapping the developing markets will increase the potentiality. Some of the emerging markets are going faster than the Tier I cities. · Offering budget carrier services will further enhance the target customer segments. · Developing shorter haul routes will help them to target more customer segments.
Threats	· Increase in jet fuels will reduce the profitability (Turner and Lim 2015). · Growing popularity of the budget carriers will further dent the potentiality of United Airlines. · Emergence of economic recession will reduce the number of potential customers.

Reference

Ajagbe, A.M., Ogbari, M.E., Oke, A.O. and Isiavwe, D.T., 2015. Review of global marketing environment and entrepreneurship development. International Journal of Commerce and Law, pp.1-14.

Armen, S., 2013. Performance assessment of major US airlines via cash flow ratios. Annals of the University of Oradea, Economic Science Series, 22(2), pp.p398-408.

Ayub, A., Razzaq, A., Aslam, M.S. and Iftekhar, H., 2013. A conceptual framework on evaluating SWOT analysis as the mediator in strategic marketing planning through marketing intelligence. European Journal of Business and Social Sciences, 2(1), pp.91-98.

Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem Services, 17, pp.99-111.

Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.

Haenlein, M. and Libai, B., 2013. Targeting revenue leaders for a new product. Journal of Marketing, 77(3), pp.65-80.

Latif, W.B., Islam, M.A. and Noor, I.B.M., 2014. A conceptual framework to build brand loyalty in the modern marketing environment. Journal of Asian Scientific Research, 4(10), p.547.

Leeflang, P.S., Verhoef, P.C., Dahlström, P. and Freundt, T., 2014. Challenges and solutions for marketing in a digital era. European management journal, 32(1), pp.1-12.

Turner, P.A. and Lim, S.H., 2015. Hedging jet fuel price risk: The case of US passenger airlines. Journal of Air Transport Management, 44, pp.54-64.

Venter, P., Wright, A. and Dibb, S., 2015. Performing market segmentation: a performative perspective. Journal of Marketing Management, 31(1-2), pp.62-83.

Wittman, M.D., 2014. Are low-cost carrier passengers less likely to complain about service quality?. Journal of Air Transport Management, 35, pp.64-71.