Chapter 3: Analyzing the Marketing Environment

generational cohort

- A group of people of the same generation who typically have similar purchase behaviours because they have shared experiences and are in the same stage of life.

recession

- A period of economic downturn when the economic growth of the country is negative for at least two consecutive quarters.

macroenvironmental factors

- Aspects of the external environment—culture, demographics, social trends, technological advances, economic situation, and political/legal environment (CDSTEP)—that affect companies.

foregin currency fluctuations

- Changes in the value of a country's currency relative to the currency of another country; can influence consumer spending.

demographics

- Characteristics of human populations and segments, especially those used to identify consumer markets, such as age, gender, income, race, ethnicity, and education.

political/legal environment

- Comprises political parties, government organizations, and legislation and laws that promote or inhibit trade and marketing activities.

country culture

- Easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colours, and food preferences, and more subtle aspects, which are trickier to identify.

economic situtation

- Economic changes that affect the way consumers buy merchandise and spend money; see inflation, foreign currency fluctuations, interest rates, and recession.

baby boomers

- Generational cohort of people born after World WarII until 1965.

Generation X

- Generational cohort of people born between 1966 and 1971.

Gereation Y/millennials

- Generational cohort of people born between 1972 and 1992; the biggest cohort since the original postwar baby boom.

tweens

- Generational cohort of people who are not quite teenagers but are not young children either (ages 9 to 12); they're in beTWEEN.

Identify important social and natural trends that impact marketing decisions

- In any society, major social and natural trends influence the way people live. Social trends have a tremendous impact on what consumers purchase and consume. Understanding these trends—such as price sensitivity, health and wellness, green marketing, privacy issues, and the time-poor society—can help marketers serve their customers better by offering them products and services that closely match their needs and wants.

green marketing

- Involves a strategic effort by firms to supply customers with environmentally friendly merchandise.

seniors

- North America's fastest-growing generational cohort; people aged 65 and older.

inflation

- Refers to the persistent increase in the prices of goods and services.

interest rates

- Represent the cost of borrowing money.

technological advances

- Technological changes that have contributed to the improvement of the value of both products and services in the past few decades.

Identify the factors in a firm's macroenvironment and explain how they influence its overall marketing strategy.

- The factors in the firm's external environment are culture, demographics, social and natural trends, technological advances, economic situation, and political/legal environment (CDSTEP). A clear understanding of these factors enables marketers to understand whether they pose threats or present new opportunities. What are the chances that a fast-food hamburger restaurant would be successful in a predominantly Hindu neighbourhood? Not very good. Marketers must be sensitive to such cultural issues to be successful, and then they must also consider competitors as well as customer demographics—age, gender, income, race, ethnicity, and education—to identify specific customer groups. In any society, major social and natural trends influence the way people live. Understanding these trends can help marketers serve their customers better. At no other time in history has technology moved so rapidly and had such a pervasive influence on the way we live. Not only do marketers help to develop technologies for practical, everyday uses, but technological advances also help marketers provide consumers with more products and services more quickly and efficiently. The general state of the economy influences how people spend their disposable income. When the economy is healthy, marketing success comes relatively easily. But when the economy gets bumpy, only well-honed marketing skill can yield long-term successes. Naturally, all firms must abide by the law, but many legal issues also affect marketing directly. These laws can be broken into those that pertain to competitive practices, such as antitrust legislation, and those designed to protect consumers from unfair or dangerous practices, such as warning labels on cigarette packages.

culture

- The shared meanings, beliefs, morals, values, and customs of a group of people.

Outline how the factors in a firm's microenvironment influence its marketing strategy

- The three factors in a firm's microenvironment are its capabilities, corporate partners, and competition. Everything a firm does should utilize its strengths and revolve around the customer; without the customer, nothing gets sold. Firms must discover their customers' wants and needs and then be able to provide a valuable product or service that will satisfy those needs. If there were only one firm and many customers, a marketer's life would be a piece of cake. But because this setup rarely occurs, firms must monitor their competitors to discover how they might be appealing to their customers. Without competitive intelligence, a firm's customers might soon belong to its competitors. Though life would certainly be easier without competitors, it would be difficult, if not impossible, without corporate partners. Good marketing firms work closely with their suppliers, marketing research firms, consultants, and transportation firms to coordinate the extensive process of discovering what customers want and getting it to them when and where they want it. Each of these activities—identifying corporate strengths, discovering customer needs, and working with corporate partners—is central to the firm's marketing strategy and helps add value to firms' products and services.

competitive intelligence

- Used by firms to collect and synthesize information about their position with respect to their rivals; enables companies to anticipate changes in the marketplace rather than merely react to them.