Ch 3: Understanding the Marketing, Environment, Ethical Behavior, and Social Responsibility

3. Technological Forces

Examples: · Cloud computing · Smart phones · Nano-technology · Genetically altered food · Wireless power · E-Readers (May replace your backpack full of textbooks one day soon)

Several factors have contributed to the shift in attitudes.

First, many young women had career mothers who provided a reference point for lifestyle choices. Second, increased participation in organized sports eliminated one of the most visible inequalities in opportunities for women. And finally, the Internet has provided exposure to the marketplace through a mechanism that makes gender, race, and ethnicity invisible.

Baby Boomers

Includes the generation of 76 million children born between 1946 and 1964

Gen Z kids will grow up with a highly sophisticated media and computer environment and will be more

Internet savvy and expert than their Gen Y forerunners.

Technology

Inventions or innovations from applied science or engineering research.

Competition

The alternative firms that could provide a new product to satisfy a specific market's needs.

This growth suggests that niche markets based on these 5 factors will become increasingly important.

age life stage family structure geographic location ethnicity

· Global income levels and living standards have been

increasing.

Most noticeable cultural change in the US in the past 30 years has been attitudes and roles of

men and women in the marketplace.

Technology also provides value through the development of

new products, which may replace existing ones.

changes in the market are a source of

opportunities and threats to be managed

These trends affect consumers and the

organizations that serve them.

Because of the Internet, consumers today are able to find information easily about

products/services that they are considering purchasing.

4 basic forms of competition

pure competition monopolistic competition oligopoly pure monopoly

during a recession

spending , debt and the use of credit all decline

An increasingly important value for consumers in the United States and around the globe is

sustainability and protecting the environment.

4. Competitive Forces:

the 4th component of environmental scanning

Many companies that had a consumer base that was primarily men or primarily women in the past are preparing for growth from

the other gender....grocery stores, car dealers, investment services. Harley-Davidson now makes a bike specifically to fit women customers because they found that women want to drive their own bike rather than sit behind and hold on to a man in the front.

what are 2 examples of changing social trends

the way gay/lesbian unions are viewed the way the public sees marijuana

Millennials refers to

the younger members of Gen Y

Today, commonly held values include:

· Personal control. · Self-help. · Continuous change. · Competition. · Equality. · Future orientation. · Individualism. · Action.

Culture can be informally described as

"how we do things around here." All of us are parts of several cultures where our status, behavior, and attitudes adjust to our surroundings.

China implemented its _____ policy in 1980, enforcing it with strict penalties including imprisonment, fines, and forced abortion. They

"one child only"

All age groups rank _____ as important values.

"protecting the family" and "honesty"

Generation Y

(Millennials) 75 million Americans born between 1977 and 1994.

b. Small Businesses As Competitors

- Small businesses make up the majority of the competitive landscape for most businesses -generate 63% of new jobs -28.8 million small businesses -46% GDP

An environmental scan of today's marketplace shows the many important trends that influence marketing:

-growing popularity of brand advocates -increasing application of virtual reality -surging scrutiny re: collection/use of consumer data -the way consumers are changing how they use media -the increasing impact of new technologies such as robots -the growth of online privacy advocacy and regulation.

The National Association for PET Container Resources estimates that

29 percent of all plastic bottles are now recycled.

The U.S. Census Bureau estimates that the current population of the United States is

316 million people.

If current trends in life expectancy, birthrates, and immigration continue, by 2030 the U.S. population will exceed

358 million people.

a. Alternative Forms of Competition

4 basic forms of competition create a continuum

There have been dramatic changes in the roles and views of men and women in the last

40 years. Ads used to target women with products geared toward the "homemaker". Today that has changed.

Number of people __________ is expected to more than triple in the coming decades and reach __________ by 2050.

60 and older 2 billion

iii. Racial and Ethnic Diversity:

A notable trend is the changing racial and ethnic composition of the U.S. population.

b. Technology's Impact on Customer Value

Advances in technology have important effects on marketing:

Approximately one in three U.S. residents is

African American, American Indian, Asian, Pacific Islander, or a representative of another racial or ethnic group.

Market Space

An information - and communication - based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digital offerings.

There are changes occurring now:

Artificial Intelligence Automation Internet of Things IoT Wearable technology

Generation Z

Born: 1995-2010 Coming of Age: 2013-2020 Age in 2016: 11-21 Current Population: 23 million and growing rapidly

An intranet, for example, is a

CLOSED Internet-based network used within the boundaries of an organization. It is a private network that may or may not be connected to the public Internet.

Multicultural Marketing

Combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and life styles of different race

a. Macroeconomic Conditions

Concern at this level are: the performance of the economy based on indicators like GDP (gross domestic product), unemployment, and price changes (inflation or deflation)

a. Demographics

Describing a population according to selected characteristics such as age, gender, ethnicity, income, and occupation

By 2015, Hispanics, African Americans, and Asian Americans will spend

Hispanics $1.4 trillion African Americans $1.2 trillion Asians $891 billion each year, respectively.

Generation X

Includes the 50 million born between 1965 and 1976. Also called baby bust, because the number of children born each year was declining.

________ predicted to have the world's largest population in 2050 with 1.7 billion people, and China a close second with 1.3 billion people.

India

Inflationary economy

Inflation is a period of price increases...

Which two of the following are the broad categories that should be considered when analyzing the economic component in an environmental scan?

Macroeconomic conditions Consumer income

Environmental trends arise from 5 sources:

Social Economic Technological Competitive regulatory

A major regional shift in the U.S. population toward _____ is under way.

Southern and Western states

Millennials interest in _____ is infuencing product offerings, colleges and employers

Sustainability

Which of the following environmental forces most directly impacts the marketspace?

Technological

Value Consciousness:

The concern for obtaining the best quality, features, and performance of a product or service for a given price that drives consumption behavior.

i. Population at a glance:

The increases in population have not occurred worldwide; they are primary in Africa, Asia, and Latin America -The population is becoming larger, older, and more diverse

ii. Disposable Income

The money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation.

iii. Discretionary Income

The money that remains after paying for taxes and necessities (Used for luxury items) Ex. Going on a cruise

iii. Internet of Things (IoT)

The network of products embedded with connectivity - enabled electronics

Environmental Scanning:

The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends Arise from: (1) social, (2) economic, (3) technological, (4) competitive, (5) regulatory forces

b. Culture

The set of values, ideas, and attitudes that are learned and shared among the members of a group. Ex. Values of people today are: personal control, continuous change, equality, individualism, self - help, competition, future orientation, and action.

i. Gross Income

The total amount of money made in one year by a person, a household, or family unit. Typical income: $59,039 in 2016

The problem in defining what is discretionary versus disposable income is determining what is

a luxury and what is a necessity

Higher levels of technology will make significant inroads in Gen Z's

academics allowing for customized instruction data mining of student histories to enable pinpoint diagnostics remediation or accelerated achievement opportunities

Reverse Logistics:

all operations related to the re-use of products and materials...occurs often when manufacturers provide the means for consumers to return "used up, worn out" products as a part of the new purchase process so that they can be repaired, remanufactured, re-distributed, or disposed of properly.

use of _____ is associated w/ success in the marketplace

analytics

ii. generational cohorts

baby boomers gen X gen Y gen Z millennials

elements of someone's culture influences:

buying patterns

Thus, if taxes rise or fall faster than income,

consumers are likely to have more or less

With customer bases who are racially and ethnically diverse, marketers must understand each _______ to market their offerings successfully.

culture

from a marketing standpoint, if prices rise faster than income, the number of items consumers can buy

decreases

Pre-cycling:

efforts by manufacturers and consumers to avoid creating waste.

Technology can also change

existing products and the ways they are produced Many companies use technological developments to recycle products through the manufacturing process several times.

Baby boomers are diverse group in terms of their age and life stages... one commonality is their

interest in health, wellness, and appearance.

These forces affect the organization, marketing activities of the firm, as well as

its suppliers and customers.

The social forces of the environment include the demographic characteristics of the population and

its values.

US population is becoming _______ suggesting that niche markets based on age, life stage, family structure, geographic location, and ethnicity will become increasingly important.

larger, older, and more diverse

Changes in these forces can have a dramatic impact on

marketing strategy.

In 1960, 75 percent of all households consisted of

married couples. Today, it's just 48 percent of the population...

· China has 30 million more

men than women.

b. Consumer Income:

microeconomic trend in terms of consumer income are important issues for marketers

In the 1980s, the population shifted from the cities to suburbs. More recently, the population began to shift again, from suburbs to

more remote suburbs called exurbs.

therefore, monitoring this is important for marketing:

national and global cultural trends

The cost of technology is decreasing dramatically. As a result, consumers now assess value based on

other dimensions, like quality, service, and relationships

Cultural values also vary

over time and between countries, and are useful in understanding consumer behavior.

The Economy

pertains to the income, expenditures, and resources that affect the cost of running a business and household.

discretionary expenditures can also be increased by

reducing savings

Recession

slowing (declining economic activity) businesses decrease production, unemployment rises, and many consumers have less money to spend.

Increasingly, consumers around the world are committed to brands with a strong link to

social action.

changes in ____ can have a dramatic impact on marketing strategy

social forces

a. Technology Of Tomorrow

technology change is the result of research so - Technology is difficult to predict

c. Technology Enables Data Analytics:

technology has also had a dramatic impact on the operations of marketing orgs 1. marketspace 2. electronic commerce 3. internet of things

1. Social Forces

the 1st component of the environmental scan the demographic characteristics of the population and its culture

2. Economic Forces

the 2nd component to the environmental scan the macroeconomic view of the marketplace and a microeconomic perspective of consumer income

Extranets

which use Internet-based technologies, permit communication between a company and its supplier, distributors, and other partners (such as advertising agencies).

Trends identified by environmental scan

x

What are the possible marketing implications?

· 2.4 billion internet users · 1.3 billion use social media · 1 in five online minutes is spent using social networks

Contrasting values outside the United States, for example, include:

· Belief in fate. · A focus on group welfare. · The importance of tradition. · Acceptance of birthright. · The importance of rank and status.

Companies are also changing their business practices to respond to trends in consumer values, such as:

· Coca Cola—Alleviating global water scarcity. · Facebook—Reducing the carbon footprint of its data centers. · Walmart—Cutting energy use by buying more local products, reducing packaging, and switching to renewable power.

Increasingly however, other values are becoming important:

· Sustainability and protecting the environment (efficient cars, fluorescent light bulbs, recycling, etc...) · Health consciousness. · Equitable distribution of resources