Economic enviromentPlease help. Explain what is meant by econnomic enviroment and show how a significant downturn in levels of activity in the econimic enviroment in SA could affect the marketing...

Economic enviromentPlease help. Explain what is meant by econnomic enviroment and show how a significant downturn in levels of activity in the econimic enviroment in SA could affect the marketing of soap powder on the one hand and motor vechiles onthe other, are both products similary affecyed?

Asked on by jenner12

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wannam's profile pic

wannam | High School Teacher | (Level 3) Educator

Posted on

Economic environment is a term used to describe the financial security of a particular area. Right now, some economic environments are in crisis. Few places have a healthy economic environment and most are currently in a recession. A lack of financial security in citizens will effect both soap powder and the automotive industry. The automotive industry would likely be effected first because it is less of a necessity. People are far more likely to keep the cars they have rather than purchase new cars. The automotive industry will need to continue to manufacture parts for older model cars much longer than they did before. People who do purchase a new car are much more likely to be looking for fuel efficiency and a low price than luxury. Eventually, an economic downturn will effect even the small necessities like soap powder. Customers are more likely to buy an off-label if it is less expensive. Marketing has to shift from showing why this product is better than other products to why it is a better value.
litteacher8's profile pic

litteacher8 | High School Teacher | (Level 3) Distinguished Educator

Posted on

An economic environment of extreme poverty would affect both soap and cars, but not to the same degree.  Soap is a necessity, whereas cars are not.  So people would still have to buy soap, but they might switch to cheaper brands in a bad economy so I would still worry if I were manufacturing soap.

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

No, they won't be similarly affected.  Soap powder is much more of a necessity.  It is also something that costs relatively little when compared to a motor vehicle.  If there is a recession and people have less money, they will still need to buy soap powder and will still largely be able to afford it.  By contrast, people will be much more wary of buying a "big ticket" item like a car.

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