The Marketing Environment

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The Marketing Environment
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Objectives

• 1. Discuss the external environment and
  environmental scanning.
• 2. Describe social factors that affect marketing.
• Explain importance of understanding
  demographic trends.
• Identify reactions to the state of the economy.
• Identify the impact of technology on firms.
• Discuss the political and legal environment of
  marketing.
• Discuss the importance of understanding
  competitive factors.

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The External Marketing Environment
External Environment is not typically
controllable
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Social Factors
Social Factors
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Social Factors
Social Change
More

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The Emerging Culture

• Traditionalist Values
• Religious Right
• Traditional relationships
• Conservative/conventional religious beliefs
• Against feminism in work
• Modernist Values
• Financial materialism/Success is a high priority
• Not altruistic
• Cynicism about politics
• Not idealistic, but nature is sacred
• Cultural Creatives Values
• Want to rebuild neighborhoods/communities
• Like foreign places and the exotic
• General Green values
• Idealism/want to be activist
• Not cynical on politics

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Some Demographic Factors
Demographics
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Demographic Factors Age

• Generation Y Born to Shop
• Born between 1977 1995 (about 70mm)
• Immense marketing impact
• In 1997 estimated children aged 4-12 accounted
  for 500 billion hh spending
• See products as their brand names
• Affected by change in families, workforce, and
  technology
• 80 have Internet access
• Spending 10-19 years olds 91.5 billion -- up 60
  from ten years ago
• Common Attributes Idealistic, Passionate,
  Empowered

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Demographic Factors Age

• Generation X
• Born between 1964-1978 (about 17mm)
• Savvy, Cynical Consumers
• Older generations saw disillusioned, rebellious
  pessimistic
• Xers Boomers live to work, Xers work to live
• Materialistic, but critical
• Marketing challenge I am not a target market

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Demographic Factors Age

• Baby Boomers Americas Mass Market
• Born between 1946 and 1964 (about 78mm)
• Cherish youth, convenience, individualism
• Led to a personalized economy
• Custom-designed products
• Massive sales of self-improvement materials
• Focus on family, health, convenience, finances,
  and reading

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Demographic Factors Age

• Older Consumers Not Just Grandparents
• Healthier, wealthier, and better educated than
  earlier generations
• Considerable purchasing power for cars, home
  remodeling, and travel
• Market potential not fully tapped due to
  misconceptions about mature adults

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Demographic Factors Location

• Americans on the Move
• Average U.S. citizen moves every six years
• Cities with greatest projected pop growth from
  95-05 Houston, Wash D.C., Atlanta, San Diego,
  Phoenix, Orlando, Dallas
• Immigrants add 10 billion yearly to the economy

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Demographic Factors Ethnicity

• Growing Ethnic Markets
• U.S. population is shifting to society
  characterized by three ethnic minorities
• African-Americans
• U.S. Hispanics
• Asian-Americans
• Trend in U.S. is toward greater multiculturalism

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Demographic Factors
Ethnicity
Multicultural Makeup of the U.S.
100
80
Whites
African Americans
75
64
60
Hispanic Americans
Asian Americans
40
15
20
12
15
9
7
0
4
2023
1999
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Based on projections from the 1990 Census
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Economic Factors
Key Economic Factors of Interest to Marketers
Distribution of Consumer Income
Recession
Inflation
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Economic Factors
Distribution of Consumer Income

• Rising Incomes
• 66 of U.S. households earn middle-class
  income
• Over 10 earn over 75,000, primarilyfrom
  dual-income families
• More discretionary income for high-quality,
  high-priced goods and services ?

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Economic Factors
Inflation

• Purchasing Power decreases
• Consumers reaction
• Search for lowest prices
• Rely on coupons and sales

Prices
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Economic Factors
Recession

• Income, production and employment fall
• Reduced demand for goods and services
• Marketing strategies
• Improve existing products
• Introduce new products
• Maintain and expand customer services

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Political and Legal Factors
Political / Legal Factors
Government Laws and Regulations Protect
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Political and Legal Factors
Federal Legislation

• Sherman Act of 1890 Prohibits monopolies or
  attempts
• Clayton Act of 1914 Supplements Sherman Act
  with restrictions on price discrimination
• Federal Trade Commission Act of 1914 Creates
  FTC which declares unfair methods of competition
  in commerce are unlawful

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Political and Legal Factors
Regulatory Agencies for Marketing Affairs

• Consumer Product Safety Commission
• Federal Trade Commission
• Food Drug Administration

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Technological and Resource Factors
Technology
Internet

• U.S. excels at basic research, but falls short
  at applied research
• Many U.S. companies seek short-term profits and
  take minimal risk

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Competitive Factors
MinimalControl
Competition

• How many competitors?
• Brand
• Industry
• Form
• Generic

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Competitive Factors
Identifying Competitors

• Competitors Strategies
• Identify the strategic group in which your firm
  competes
• Competitors Objectives
• Assessing Competitors Strengths and Weaknesses