CASE 2 LESSON 1 ANSWERS

1. Identify all of the environmental factors that can affect the demand for consumer durables
and assess the magnitude and direction of their impact.
Answer :
The most direct effects to discuss here relate to the economic environment. Changes in
aggregate disposable income may explain much of the change in sales of consumer durables.
But it is also important to consider the distribution of this change between different groups
within the population. Also of significance is consumers’ perception of their change in
income and their confidence for the future. Fears for the future may result in money being
put aside rather than being spent on purchase of "luxury" durables. Consider also the effects
of social and cultural attitudes. These can be crucial when comparing overseas markets, and
can change over time (the purchase of durables for ostentatious consumption has risen and
fallen, depending on social attitudes of the time).
Demographic environment :
 Worldwide population growth
 Population age mix
 Ethnic markets
 Educational groups
Economic environment :
 General economic conditions : level of employment, level of income, buying power
 Leisure time availability : imcome distribution, savings, debt, and credit availability
 Economic cycle
Natural environment :
 Shortage of raw materials and Increased energy costs
 Anti-pollution pressures and Changing roles of government
Socio-cultural environment :
 World views that consumers hold of themselves, others, society, organizations,
nature, and the universe
 High persistence of core values
 Existence of subcultures
2. In what ways can a manufacturer of consumer durables seek to gain a better understanding of
its marketing environment?
Answer :
This chapter has discussed the importance of gathering information about the marketing
environment. To be effective, information about the marketing environment should be varied,
timely and comprehensive.
Typical elements of this might include: Regularly scanning the business and trade press;
Retaining the services of a marketing research agency; Regularly conducting quantitative and
Qualitative research among its customers.
Marketing environment should be analyzed with :
 Consumer perceptions
 Past experiences
 Personal economic situations
 Consumer speculations

3. How can a manufacturer of consumer durables seek to respond to environmental change as

rapidly as possible?
Answer :
The key here is to create a flexible organisation. Once signals of change have been picked up,
the resources of an organisation should be mobilised to meet the new environmental
challenge. Flexible labour practices; Just-in-time production systems and the ability to
rapidly downsize/upsize are important. Leadership is essential to ensure that changes are
implemented rapidly and effectively.
Responding to environmental change :
 Adapt production schedules
 Adapt to changing needs
 Adapt to changing trends
 Review integrated marketing communication
 Review distribution strategy

References : https://www.coursehero.com/tutors-problems/Marketing/19552276-1Identify-all-of-
the-environmental-factors-that-can-affect-the-demand/