Few people in Europe diet. So the same soft drink that PepsiCo sells in the U.S. under the brand name of Diet Pepsi is sold in England under the brand name of Pepsi MAX. This is an example of which part of the external market environment?
a. Competitive
b. Legal
c. Cultural and social
d. Political
e. Economic
I'll be glad to check your answer.
Cultural and social
c. Cultural and social
To determine the answer, we need to understand the concept of the external market environment factors.
The external market environment refers to the external factors or influences that affect an organization's ability to operate in a particular market. These factors include political, economic, sociocultural, technological, legal, and competitive factors.
In the given example, the change in the brand name of Diet Pepsi to Pepsi MAX in England is primarily driven by cultural and social factors. Here's how you can arrive at the answer:
Option a. Competitive: This refers to the competitive environment in the market. Although competition may play a role in shaping branding decisions, the name change is not directly related to competition with other soft drink companies. Therefore, this option can be eliminated.
Option b. Legal: Legal factors primarily involve laws and regulations. While legal factors could influence branding decisions in some cases, in this specific example, the brand name change is not driven by legal considerations. Hence, this option can be eliminated.
Option c. Cultural and social: Cultural and social factors refer to the beliefs, values, and behaviors of a particular society or culture. In this case, the decision to change the brand name to Pepsi MAX in England is driven by the cultural and social preferences of the European market, where the concept of dieting is less prevalent compared to the United States. Hence, this option is likely the correct answer.
Option d. Political: Political factors typically involve government policies and regulations. The brand name change is not directly related to any political considerations, so this option can be ruled out.
Option e. Economic: Economic factors involve the economic conditions and trends that impact the market. While economic factors could influence branding decisions, the primary reason for the brand name change in this example is not economic in nature. Therefore, this option can be eliminated.
Based on the analysis above, the correct answer is c. Cultural and social. The difference in dieting behaviors and preferences between the U.S. and Europe has led PepsiCo to adapt their branding strategy by renaming the product to Pepsi MAX in England.