Chapter 3 concepts

Marketing Enviroment

The actors and forces outside Marketing that affect Marketing Management's ability to build and maintain successful relationships with target customers. Studying the Marketing Environment allows you to take advantage of opportunities and combat threats. Intelligence and research helps to gather data on the environment. Businesses must research to help adapt to the ever changing environment.

Publics (Subset of Microenviroment)

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Companies require the support of publics besides its customers. Publics include-- Financial, Media, Government, Citizen-action, Local, General, and Internal.

Baby Boomers (Subset of demography)

Baby boomers are the 78 million born between 1946-1964. The baby boomers account for about 25% of the U.S. population. But also an estimated 80% of nation's personal wealth. It would be a mistake to think of the older boomers as phasing out or slowing down. Today's boomers think young no matter how old they are. ***Represent strong targets for financial services**

Macroenvironment

Consists of the broader forces that affect the actors in the microenvironment (financial, media, gov't, consumer, communties, employees, activists). The macroenvironment's factors consist of demographic, economic, natural, technological, political, and cultural.

Subsistence Economies (Subset of Economic environment)

Consume most of their own agricultural and industrial output. Also they offer few market opportunities.

Environmental Sustainability

Developing strategies and practices that create a world economy that the planet can support indefinitely.

Political and Social Environment

Includes laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. Such legislation enacted helps to: Protect companies from each other Protect consumers from unfair business practices Protect the interests of society against unrestrained business behavior.

Cultural Environment

Institutions and other forces that affect society's basic values, perceptions, preferences, and behaviors. There are core values and beliefs (Passed on from parents to children, reinforced by institutions), and there are Secondary core values and beliefs. (more open to change than core beliefs)

Natural Environment

Involves natural resources needed as inputs by marketers or that are affected by marketing activities. Firms focus on creating environmentally sustainable strategies.

The Company (Subset of Micro environment)

Other company groups must be considered when designing marketing plans. All the departments of a company share the responsibility for understanding customer needs and creating value.

Generation X (Subset of Demography)

Represent to 49 million born from 1965-1976. This generation is the most educated (to date). They are less materialistic than any other group and are skeptical of marketing (meaning they are careful buyers.) They prize experience, not acquisition. Also the Generations Xers are predominately parents, meaning the family comes first when buying products, and their career comes second. They tend to research products before they consider a purchase, prefer quality to quantity, and tend to be less receptive to overt marketing pitches. They are increasingly displacing the lifestyles, culture, and values of the baby boomers.

Microenvironment

The actors close to the company that affect its ability to serve its customers--the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. (These factors all affect Marketing). Marketers must find a way for all these factors to work in harmony to create the best customer relationships and values.

Customers (Subset of Microenvironment)

The customers are the most important actors in the company's microenvironment. The aim of the entire value delivery network is to serve target customers and create strong relationships with them. There are different types of customers for the different types of markets. Consumer Market- Buy for personal consumption Business market- Buy for use in production processes Reseller market- Buy to resell at a profit Government Market- Buy for public purposes International Market- Buyers in other countries.

Economic Environment

The economic Factors that affect consumer purchasing power and spending patterns. It consists of Industrial economies, Subsistence economies, and Developing economies.

Additional thoughts on Demography (Subset of demography)

The traditional households are at a decline. Non traditional households are growing-- such as single parents, and non-family households, and gay parents. Also more women are working, and there are more men who are stay-at-home dads. Also there are considerable geographical shifts in the U.S.'s population. The population is shift more toward the sun belts states (Midwest and Northeast are losing population). Suburbs are growing rapidly, which is increasing the amount of commuters into the cities. Also in the suburbs, SOHO markets are booming (Small office/home office). The population is becoming more white-collar. More diversity-- not only ethnic groups, but also the 54 million people in the disability group. homosexual groups are becoming big as well.

Industrial Economies (Subset of Economic Environment)

They are rich markets for many different kinds of goods.

Millennials (Subset of demography)

They are the 83 million born between 1977-2000. The millennials possess $733 billion in purchase power. They the most ethnically diverse,and are very fluent with the digital technology. **Personalization and product customization are key to marketing success of this group.*** As a result of growing up in a world filled with so much technology, they embrace social media and mobile media.

Marketing Intermediaries (Subset of Micro Environment.)

They are the firms that help the company promote, sell, and distribute its goods to final buyers. Marketing Intermediaries consist of Resellers, Physical distribution firms, Marketing services agencies, and Financial intermediaries. (Look at chapter 3 slide 12 for more detailed info on the four different intermediaries)

Suppliers (Subset of Micro environment)

They just provide the resources needed to produce goods and services. Suppliers are important, as they are a crucial link in a company's overall customer value delivery network. Because Supplier problems can seriously affect marketing, marketing managers must watch supply availability and cost.

Developing Economies (Subset of Economic Environment)

They offer outstanding marketing opportunities for the right kinds of products.

Competitors (Subset of Microenvironment)

To be successful a company must provide greater customer value and satisfaction than its competitors. Companies must position their products in a way to capture the minds of the consumers, to create more desire for their products over the competitors' products.

Income Distribution

Top 5% of american earners get around 22% of the country's adjusted gross income. Bottom 40% of american earners get just 12.6% of the total income. ***this unequal distribution of income has created a tiered market.** Companies should target consumers based on their products price ranges. More luxurious companies tailor to the affluent and the companies selling cheaper products target the people with more modest means.

Cause-Related Marketing

Where a company links themselves to a worthwhile cause. This method is used to create a more likening for the company.

Technological Environment

forces that create new technologies, creating new products and market opportunities.

Demography

study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. *A change in age structure of the U.S. population is a significant demographic trend.