Factors That Affect Marketing and Advertising



Marketing is a process in which goods and services move from a manufacturer to the customer. It means thinking about business concerning customer needs and satisfaction. Marketing mainly comprises of identification, selection, and development of a particular product; determining the price of the product; selecting a distribution channel to reach the customer; developing and implementing a promotional strategy.

Some factors that affect the marketing of a product are:

  • Social factors:

Social factors are the factors that affect one’s lifestyle such as religion, family, and the buying potential, which can change over time. The developers need to be aware of the changes to meet the needs of the consumers.

The population is also one of the primary social factors that affect marketing because an increase in the population increases the demand for goods and services in the market.

  • Economic Factors:

There are various economic factors that affect marketing such as inflation, interest rates, exchange rates, recession and taxes.

  • Inflation: Inflation can be defined as the rise in the prices of various items over a period of time. A rise in the prices of goods is directly proportional to the input prices for producing the goods and services. In case of inflation, the market analysts and the fund managers will consider the total impact on the margin of that particular product.
  • Interest rates: Less interest rate means more money to spend. When a consumer pays less in terms of interest, it means he is left with more money to spend on, which in turn, creates a ripple effect of high spending throughout the economy.
  • Exchange rates: Exchange rates have a symbolic effect on companies that do business globally. When the business enterprises exchange goods or services across borders involving two or more currencies, variation in exchange rates can result in profit or loss for a particular business.
  • Recession: Business firms affected by recession spend less cash on advertising and marketing a product; as a result, consumer faith fades away, perpetuating the recession.
  • Taxes: Taxes mitigate both demand and supply of a product, and prompts the market equilibrium to a price that is higher than without the tax and a quantity that is lower than without the tax.
  • Income level: The varying income levels in a particular company determines the pricing strategy of the products and services in the market. This will estimate that whether people will purchase your products or not.

Economic Factors Affecting Marketingss

  • Regulatory factors: 

Laws and regulations exist at the federal, state, and local levels. Marketing rules dictate the messages that firms may include while trying to fetch consumers to buy their goods and services. Breach of these regulations can pilot stiff financial penalties that may surpass any actual monetary impairment consumers may suffer.

The Government regulations are introduced to protect both the business firms and the consumers that ensures fair competition and business practices thereby protecting the consumers from unfair trade practices.

The Federal Reserve is the authoritative agency for monitoring the state of the economy and calibrating the interest rates accordingly. In the course of the recession, the FED will lower the prime interest rates, which is the rate of interest the banks charge for the loans granted for businesses to stimulate the economy. The FED is also in charge of open market operations which is a process of scaling down cash in circulation, which in turn helps bring households back to work hence keeping the employment rates down.

  • Competition:

The market competition involves various individuals and businesses contesting to sell products and services. Competition is a significant force of performance and innovation. It benefits both the producers and the consumers since it results in the production of a wider variety of goods and services at much lower prices. There are several forms of competition-

  • Pure competition: A Pure Competition comprises of many sellers with identical products like Mother Care and Chico.
  • Monopolistic competition: A Monopolistic competition involves many sellers with similar products like McDonald’s and Wal-Mart.
  • Oligopoly: Oligopoly is a market where a few companies control the industry like Parle, Britannia and Sun feast.
  • Monopoly: Monopoly is when only one firm rules the market like Xerox.

Competitive Factors In Marketing

  • Demographics:

Demographics attributes to the socio-economic characteristics of population demonstrated statistically such as age, race, sex, income level, marital status, education, occupation, religion, birth and death rates, average family size and income. Business needs a planned and targeted approach to consumers. Demographics affects most of the choices a businessman makes in developing a business plan.

Demographics also incorporate the shift in the population which is the movement of people from one geographic location to the other.

 Demographic Factors Affecting Marketing


Advertising is the process of generating information for promoting the sales of products and services. Advertisers influence the emotions of the consumers by techniques including stereotyping and targeting the audience based on who they are.

While selling goods and services to a selected bunch of consumers creating a market plan assists how to inform, persuade, and remind the consumers regarding what the product or service offers.

There are various factors that affect the advertising of a product:

  • Projected annual sales:

The annual gross sales are always taken into account when an entrepreneur prepares an advertising budget for his business. This helps the entrepreneur to know his actual advertising allowance while preventing him from spending too much or too little on advertising. “Entrepreneur” which is an online magazine helps establish a minimum and maximum advertising budget by calculating 10 and 12 percents of the projected annual gross sales. This figure can vary every year based on the company’s performance and the product markups.

  • Marketing objectives:

Marketing objectives widen across organisations and can affect significantly on what appears in a company’s advertising budget. Marketing objective can be to retain 5 percent more repeat customers, encountering growth each month or improving annual sales by 15 percent. The objective helps define strategies for marketing and hence, gives an insight into how and where to advertise, which in turn affects the budget of advertising. A smart approach used in a reliable marketing objective is it should be specific, measurable, achievable, realistic, and most importantly time specific.

Marketing Objectives In Advertsiing

  • Target market:

The target market is the potential buyers of a product. While one business may target fresh college graduates with an average income of 25,000 rupees, another may target consumers whose annual income exceeds 100,000 rupees. The target market always has an impact on the advertising budget. Factors involved in locating a target market are Geographics, Demographic, Behavioral Insights, and Psychographics.

Target Market In Advertising

  • Types of Media:

Type of media chosen for advertising defines the advertising budget. A local print media may cost lesser than an online advertisement with a credible website. The kind of media opted to advertise a product from print, web, radio, television, leaflet, billboards to direct marketing can have an impact on the advertising budget.

Types Of Media In Advertising

  • Time of the year:

Prices of advertisements may vary based on seasons or holidays. Few advertisers may offer discounts during some seasons, while others may hike their prices during specific events or times. If there is an attempt to place the advertisement in a magazine’s popular issue of the year or on a television during a highly watched event, there could be a change in the amount spent to promote the product.

  • Product launch vs Existing product:

Whenever a new product is launched in the market, the entrepreneur needs to consider the product that is already existing in the market as competitors because the product owners may get carried away with the various forms of advertisements to promote their new product, which may result in a higher advertising budget in comparison to the advertising budgets of the existing products the customers are already aware of.

All these factors have changed the old school of thoughts in business managers and transformed their views on marketing and advertising.

Image Sources:

  1. realbusiness.co.uk
  2. marketingtutor.net
  3. slideplayer.com
  4. youngbrothercx.blogspot.in
  5. ravimagazine.com
  6. study.com
  7. pinterest.com


  1. Jemimah Opata
  2. Jemimah Opata

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