How would Y=f(A,B,C,D,E,F,G) help a soft-drink marketer understand demand for soft drinks in global markets?
In the equation Y=f(A,B,C,D,E,F,G), Y stands for consumption of soft drinks and D is the variable for cultural elements.
An equation like "Y = f(A, B, C, D, E, F, G)" is a very general equation which only implies that the values of a dependent variable Y is influenced by different variables designated A, B, C, D, E, F and G. Out of the eight variables featuring in the equation, nature of only two have been identified--that is, Y represents consumptions of soft drinks and D represents cultural elements.
The information conveyed by this equation, then, is that the total consumption or demand for soft drinks in a market is dependent on cultural characteristics of the consumers in that market and six other unidentified factors. A soft drink marketer trying to understand the demand for soft drink in global markets can build his understanding around the given equation by:
- Identifying the cultural elements in each of the local markets influencing the total consumption of soft drinks. This will then need to be followed by detailed investigation of how and to what extent such cultural features influence consumption of soft drink.
- Identifying other variables, represented in the equation by A, B, C, E, F and G that influence consumption of soft drink. These could include variables such as demography, income level, education level, cost of manufacturing and selling soft drinks, and current availability of soft drinks.
- Studying the nature of the above identified factors in each of the market and how they influence the consumption of soft drinks.
The insight thus gained can then be used by marketers of soft drinks to take and implement decisions on their marketing mix for different markets.