An Overview of Marketing

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Lamb, Hair, McDaniel
CHAPTER 4
The Marketing Environment
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Marketing Environment

Economic
Social
Demographic
Marketing Mix
Product Price Promotion Place

Marketer
Target Market
Political
Cultural
Feedback
Technological
Legal
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Environment and Marketing Mix
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Social Factors Affecting Marketing

• Values, Attitudes and Lifestyles (VALS)
• Core American Values Self-sufficiency, Upward
  Mobility, Work Ethic, and Conformity.
• Changing role of women in society-working mothers
• Marriage as an institution
• Family as a unit of consumption
• Consumerism

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Demographic Factors Affecting Marketing

• Population, age pyramid and birth rate
• Classification of American Society by Age
• Tweens
• Generation Y
• Generation X
• Baby Boomers
• Ethnicity in America and its influence in
  marketing

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Economic Factors Affecting Marketing

• Disposable and discretionary income
• Consumer satisfaction index
• Purchasing power parity
• Rising consumer debt
• Inflation
• Recession
• Business cycle

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Technological Factors Affecting Marketing

• How technology affects marketing
• Basic and applied research
• Marketers use Internet and Blogs to understand
  consumer preferences
• Technology helps a company stay ahead in
  competition (continuous innovation)

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Political/Legal Factors Affecting Marketing

• Why companies care about Politicians
• Politicians make laws, lobbyists help business
• Governments as a customer
• Political officials can assist in securing
  business
• Protect company interests through campaign
  donations
• Federal Legislation, State Laws, Regulatory
  Agencies (Exhibit 4.1 and 4.2)
• Competitive Issues
• Consumer protection
• Business regulation

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Tweens

• Pre- and early adolescents, age 9 to 12
• Population of 20 million
• Purchasing power of 21 billion in 2008
• View TV ads as just advertising
• Buying power 50 billion

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Teens

• Age 13-19
• Population of 25 million
• Purchasing power of 21 billion in 2008
• Social Network-Facebook 50 million
• Emerging as the most connected generation in
  history via emails, Facebook, chat, texting
• Buying power about 200 billion (?)

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Generation Y

• Born between 1979 and 1994
• Population of 73 million
• Purchasing power of 200 billion annually
• Researchers have found Gen Yers to be
• Impatient
• Family-oriented
• Inquisitive
• Opinionated
• Diverse
• Time managers
• Street Smart
• Connected

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Generation X

• Born between 1965 and 1978
• Population of 40 million
• Savvy and cynical consumers
• More protective and involved with their kids
• Value the importance of education
• Avid buyers of the latest clothes, technology,
  and recreational products

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Baby Boomers

• Born between 1946 and 1964
• Population of 75 millionthe largest demographic
  segment
• 2 trillion in spending power a year
• Income will continue to grow as they keep working
• Retired or close to retirement
• Influence of children of Babyboomers

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Multiculturalism and Growing Ethnic Markets
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Why Multicultural Marketing?

• With ethnic marketing you're going to get more
  share of the heart, more share of the mind, and
  ultimately, more share of the wallet.
• About one in three U.S. residents is a minority,
  representing over 100.7 million people.
• 7 states more than tripled their Hispanic
  population between 1990 and 2000 Alabama,
  Arkansas, Georgia, North Carolina, South
  Carolina, Tennessee, and Nevada.
• Twenty percent of babies born in the United
  States are Latino.

SOURCE Mike Robinson, CEO LaVerdad Marketing
Media, http//www.laverdadmarketing.com/la_casa.ht
m Lisa Biank Fasig, "An Expanding Business for
an Expanding Market," Business Courier of
Cincinnati, September 7, 2007
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Consumers Incomes

• Median U.S. household income in 2008 was
  approximately 49,000.
• Incomes have risen at a slow pace.
• Education is the primary determinant of earning
  potential.

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The FinancialPower of Women

• Women bring in half or more of the household
  income
• Women control 51.3 percent of the private wealth
  in the U.S.
• Women control 80 percent of household spending

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RecessionMarketing Strategies

• Improve existing products and introduce new ones
• Maintain and expand customer services
• Emphasize top-of-the-line productsand promote
  product value

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Political and Legal Factors
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Federal Legislation
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Regulatory Agencies
Consumer Product Safety Commission
Protects consumer safety in and around their
homes
Federal Trade Commission
Prevents unfair methods of competition in commerce
Food Drug Administration
Enforces safety regulations for food and drug
products
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Powers of the FTC
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Consumer Privacy
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Political and Legal Environment of Marketing
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Ch 4 Discussion Questions

• Explain the influence of macro environment in
  marketing.
• Explain how social and demographic factors
  influence marketing (or, you can be asked to
  explain the influence of any one of the
  environments).
• Discuss the role multiculturism and growing
  ethnic population in marketing.