To: The managing director (IPC Media)
From: Muushiwedu Manyanga
RE: The marketing planning at IPC
This document will analyse all the market research conducted
by IPC Media and evaluate the impact of the PESTLE factors and the impact they
have on Time Inc Media.
A PESTEL analysis is a framework or tool used by
marketers to analyse and monitor the macro-environmental (external marketing
environment) factors that have an impact on an organisation. Once, I have
carried out the PESTLE analysis, I will use the information to create a SWOT
analysis for Time Inc Media.
PESTEL stands for:
P – Political
E – Economic
S – Social
T – Technological
E – Environmental
L – Legal
SWOT stands for:
S – Strengths
W – Weaknesses
O – Opportunities
T – Threats
These factors are all about how and to what degree a
government intervenes in the economy, which will affect Time Inc. This can
include – government policy, political stability or instability in overseas
markets, foreign trade policy, tax policy, labour law, environmental law, trade
restrictions and so on.
It is clear from the list above that political
factors will have an impact on Time Inc and how they do business. Time Inc need
to be able to respond to the current and anticipated future legislation, and
adjust their marketing policy accordingly.
In recent years, income tax has been reduced by the
ruling conservative government. The personal tax allowance for individuals in
employment has risen to £11,500 (November 2017). This makes it more likely for
individuals to purchase Time Inc magazines as disposable income rises. Overall
this shall have a positive affect at Time Inc.
Corporation tax is a tax on profits. Since, Time Inc
is a profitable company and therefore it has been paying the 20% the government
had set. In 2017, the corporation tax has been lowered to 19% this therefore
means the business has to pay less tax than before and would have more money to
reinvest within the business. Time Inc can use this some to improve the
products (the magazines) or reinvest the money into to a marketing a campaign
to attract more customers to buy thee magazines.
political factors affect Time Inc substantially as they need to ensure that
keep up with current legislation such as minimum wage. Otherwise they could be
prosecuted/penalized for not conforming to the legislation. It is essential
that Time Inc remain law abiding otherwise their business reputation could be
Economic factors have a significant impact on how
Time Inc does business and also how profitable they are. Factors include –
economic growth, interest rates, exchange rates, inflation, disposable income
of consumers and businesses etc.
The fact that
wages are rising due to the rise in the minimum wage (7.20/hr) means that
consumers get paid more and therefore have more money to spend. Overall demand
for magazines should increase consequently increasing the revenue and profits
for Time Inc.
Inflation looks at the general rise of prices for
goods and services in the economy. In November 2017, inflation in the UK is
2.9%. This could have a negative effect on Time Inc as it means that people are
having to spend more on basic goods as a cost of living increases, they may
therefore cut back on luxury items such as magazines this could have a negative
impact on Time Inc. In order to offset this Time Inc may need to reduce their
price or develop cheaper alternative magazines to sustain sales.
Due to the
recent economic crisis (2008) Time Inc have had to ensure that they remain
competitive despite vast changes in the economic environment. Factors such as inflation
have affected Time Inc as it has meant that their consumers have less
disposable income and therefore cut back on luxuries such as magazines. The
fact that Time Inc have survived these economic changes show that it has a very
loyal customer base as well as good flexibility within the business to adapt.
These are facts and figures regarding the population
of the UK and the shared beliefs and attitudes of the population. These factors
include – population growth, age distribution, health consciousness, and career
attitudes and so on. These factors are of particular interest as they have a
direct effect on how marketers understand customers and what drives them.
One social factor that could have a positive impact
at Time Inc is the rising population of the UK. This means Time Inc could have
a very large growing target market and therefore experience rising sales if
they continue to monitor the needs of the target market and produce magazines
to satisfy their needs.
A major social factor that can have an impact on
Time Inc is the use of social media by consumers. Time Inc should seek to use
social media websites to communicate and market its magazines. This should help
in reducing marketing costs and at the same time reach a larger audience.
However, Time Inc must ensure its marketing department have the relevant ICT
skills to utilise this marketing method.
summarise Time Inc must continue to monitor its main target market and adapt
its magazines to the requirements of the consumers. The ageing population of
the UK means that Time Inc must focus on ensuring that its magazines cover and
provide the right content that are of interest to the older consumer.
We all know how fast the technological landscape
changes and how this impacts the way we market our products. Technological
factors affect marketing in three distinct ways:
New ways of producing goods and services
New ways of distributing goods and services
New ways of communicating with target markets
All 3 factors above, affect Time Inc. There should
therefore invest into the latest machinery that prints the magazines both fast
and efficiently at the lowest cost possible. By doing this profits should rise
at Time Inc UK.
The increasing use of the internet and mobile phones
apps is an area that affects Time Inc UK greatly. They must remain competitive
by ensuring their products are available via electronic format. Consumers are
increasingly demanding in products such as magazines in an electronic format.
Time Inc must seek to achieve this.
technological factors have affected Time Inc substantially and continue to do
so. Customers have become far more technologically demanding as they now access
magazine online and via social media. Time Inc have invested heavily in
delivering to such requirements. Time Inc must continue to monitor consumer
needs and preferences and ensure that it moves with times and deliver the
product as their customer demands using the latest technological tools/apps.
These factors have only really come to the forefront
in the last fifteen years or so. They have become important due to the
increasing scarcity of raw materials, pollution targets, doing business as an
ethical and sustainable company, carbon footprint targets set by governments.
More and more consumers are demanding that the products they buy are sourced
ethically, and if possible from a sustainable source.
Time Inc UK being a magazine publisher use a huge
amount of paper which is a scarce resource. Excessive use of paper is regarded
as negative by both consumers and pressure groups such as green peace. Time Inc
UK should look to reduce/minimise their use of paper. Where unavoidable there
should look to use recycled paper, this will help to reduce costs and please
Inc must ensure that it portrays itself as a responsible business and adopt
good environmental policies to create a USP. The fact that they now use
recycled paper helps to reduce running costs but also portrays positive ethical
image in the minds of the consumer.
Legal factors include – health and safety, equal
opportunities, advertising standards, consumer rights and laws, product
labelling and product safety. It is clear that Time Inc UK need to know what is
and what is not legal in order to trade successfully.
In the UK we have very different laws that Time Inc
must abide by such as health and safety laws. Time Inc UK must ensure that all
employees feel safe at work and steps are taken to minimise/eliminate the
potential for accidents to happen around the premises.
Copy write and patent laws are very important for
Time Inc UK as they are publishing company and therefore all magazines and
printed literature conforms to the law.
are extremely important for Time Inc because if any of the laws their meant to
abide by are broken then this would be bad for the company. As this would both
destroy the company’s positive image and create a bad name for them. In the
process of this it would get them prosecuted and lead to a reduction in market
shares, revenue and profits.
I have created a table below to summarise the main
strengths, weaknesses, opportunities and threats for Time Inc UK.
Wide range of products (magazines) over 100 different types of
magazines to cater for all tastes and fashions.
They have a very large market share which means good revenue and
profitability and financial position in the market.
They have a very high marketing budget and need to
continuously market their product to sustain sales.
Although they have many brands they don’t necessarily
have a distinctive strong recognisable brand, therefore continuous marketing
is required to promote sales.
Most of the magazines that Time Inc UK produce are published on paper
but if they were to move to technology (via creating an app) things would be
much better for the business.
This app would replace the books and in doing so this could help the
business expand and attract more customers.
Internet research would mean that they would have to spend as much
time and money and would be accounted for as a quick and easy source for the
business, making their market research more efficient.
Technology can put this company at a disadvantage as their customers
can “freely” look at other pages online that almost the same as the ones
publishes on Time Inc UK.
The economy is also accounted for as a threat only if the wages of
the public were to increase and so everyone would have more money in their
pockets. Resulting in an increase in profit and attention to their magazines
(once they’ve started marketing).
constructed the SWOT analysis it is clear that Time Inc have a very healthy
financial position as they have a very high market share and a wide range of
products. However, if they are to continue dominating the market they must
ensure that they embrace technology such as the use of apps and social media.
This will help to reduce running costs in the long term. However, it will
require substantial initial investment to set up the technology.