Marketing 3000 Textbook Review Chapter 5

Generational Cohorts

A group of people of the same generation. Consumers in these generational cohorts have similar purchase behaviors because they have shared experiences and are in the same stage of life.

Baby Boomers (1946-1964)

After WWII the birthrate in the United States rose sharply, resulting in a group known as the baby boomers. Now that the oldest boomers are collecting social security, it is clear that this cohort will be the largest population of consumers over the age of 50 ever.

Ethnicity

Because of immigration and increasing birthrates among various ethnic and racial groups, the United States continues to grow more diverse. Minorities now represent approximately one-quarter of the population; by 2050 they will represent about 50 percent, and nearly 30 percent of the population will be Hispanic. Minorities' purchasing power is increasing substantially and have increasing influences on mainstream US culture. The consumer behavior of these highly acculturated Hispanics differs little from that of others groups of Americans.

Foreign currency fluctuations

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

Political/Regulatory Environment

Comprises political parties, government organizations, and legislation and laws. Organizations must fully understand and comply with any legislation regarding fair competition, consumer protection, or industry-specific regulation. - 1906: Federal Food and Drug Act (FDA) - 1914: Federal Trade Commission - 1966: Child Protection Act - 1967: Federal Cigarette Labeling and Advertising Act - 1990: Children's Television Act - 2000: Do Not Spam Law

A Marketing Environment

Consumers, in the centerpiece of the hexagon, are in the immediate environment, and may be influenced directly by the immediate actions of the focal company, the company's competitors, or corporate partners that work with the firm to make and supply products and services to consumers. The firm, and therefore consumers indirectly, is influenced by the macroenvironment, which includes various impacts of culture, demographics, and social, technological, economic, and political/legal factors.

Generation Z (2001-2014)

Digital natives who were born into a world that already was full of electronic gadgets and digital technologies such as the internet and social networks.

Country Culture

Entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and subtler aspects, which are trickier to identify. Sometimes the best answer is to establish a universal appeal within the specific identities of country culture.

Greenwashing

Exploiting a consumer by dishonestly marketing products or services as environmentally friendly, with the goal of gaining public approval and sales.

The Immediate Environment (Internal)

Factors that affect consumers' immediate environment: - the company's capabilities - competitors - corporate partners

Corporate Partners

Few firms operate in isolation. Parties that work with the focal firm are its corporate partners. Consider the Nau example.

Greener Consumers

Green marketing involves a strategic effort by firms to supply customers with environmentally friendly, sustainable merchandise and services. Many consumers, concerned about everything from the purity of air and water to the safety of beef and salmon, believe that each person can make a difference in the environment.

Health and Wellness Concerns

Health concerns, especially those pertaining to children, are prevalent, critical, and widespread. New advertising guidelines therefore require marketers to produce food in reasonably proportioned sizes. Advertised food items must provide basic nutrients, have less than 30 percent of their total calories from fat, and include no added sweeteners. Advertising for food also cannot be aired during children's programming, and companies cannot link unhealthy foods with cartoon and celebrity figures. E.g. Childhood obesity has doubled and teenage obesity has tripled.

Education

Higher levels of education lead to better jobs and higher incomes. According to the US Bureau of Labor Statistics, employment that requires a college or secondary degree accounts for nearly half of all projected job growth in the near future. Average annual earnings are higher for those with degrees than for those without. For some products, marketers can combine education level with other data such as occupation and income and obtain pretty accurate predictions of purchase behavior.

Macroenvironmental Factors (External)

In addition to understanding their customers, the company itself, their competition, and their corporate partners, marketers must understand the macroenvironmental factors that operate in the external environment. - culture - demographics - social trends - technological advances - economic situation - political/regulatory environment (CDSTEP)

Income

Income distribution in the United States has grown more polarized - highest income groups are growing, whereas many middle and lower income groups' real purchasing power keeps declining. The trend of wealthy households outpacing both poor and middle classes is worldwide in terms of purchasing power, but it's especially prominent in the United States. The broad range in incomes creates marketing opportunities at both the high and low ends of the market.

Demographics

Indicate the characteristics of human populations and segments, especially those used to identify consumer markets. Typical demographics such as age, gender, race, and income are already available from market research firms. - generational cohorts - income - education - gender - ethnicity

Competitors

It is critical that marketers understand their firm's competitors, including their strengths, weaknesses, and likely reactions to the marketing activities that their own firm undertakes. Recognition of what their closest competitor is doing, as well as their attempts to halt tactics they consider damaging.

Economic Situation

Macroeconomic factor that affects the way consumers buy merchandise and spend money, both in a marketer's home country and abroad. Major factors that influence the state of an economy include the rate of inflation, foreign currency exchange rates, and interest rates.

Gender

Male and female roles have been blurred. Women today outperform men scholastically, earn higher grades on average, and graduate from both high school and college at greater rates. These shifts in status, attitudes, and behaviors affect the way many firms need to design and promote their products and services. More firms are careful about gender neutrality in positioning their products and attempt to transcend gender boundaries.

Generation Y (1977-2000)

Millennials, children of the baby boomers, are the biggest cohort since the original postwar WWII boom. It varies the most in age, from teenagers to adults who have their own families.

Privacy Concerns

More and more consumers worldwide sense a loss of privacy. Every time a consumer surfs the web and clicks on a site, online marketers can place "cookies" on that user's computer, showing them where he or she starts, proceeds, and ends the online encounter - as well as what he or she buys, and doesn't. For many consumers, such close access to their behaviors is an unacceptable invasion of privacy.

Inflation

Refers to the persistent increase in the prices of goods and services. How does this affect a firm's ability to market goods and services? When inflation increases, consumers may shift their expenditures from expensive steaks to less expensive hamburgers.

Company Capabilities

Successful marketing firms focus on satisfying customer needs that match their core competencies. Marketers can use analyses of their external environment, like the SWOT analysis, to categorize any opportunity as attractive or unattractive.

Technological Advances

Technological advances have accelerated during the past decade, improving the value of both products and services. Consumers have constant access to the Internet everywhere through services such as Wi-Fi, Mobile Hotspots, 4G, and LTE. From the firm's perspective, the technology called radio frequency identification device (RFID) enables it to track an item from the moment it was manufactured, through the distribution system, to the retail store, and into the hands of the final consumer.

Regional Culture

The influence of the area within a country in which people live. The region in which people live contains a particular culture that affects many aspects of their lives.

Culture

The shared meanings, beliefs, morals, values, and customs of a group of people. Transmitted by words, literature, and institutions, culture is passed down from generation to generation and learned over time. The challenge for marketers is to have products or services identifiable by and relevant to a particular group of people. Two dimensions of culture: - Country Culture - Regional Culture

Interest Rates

These represent the cost of borrowing money. The interest, in effect, is the cost to the customers or the fee the bank charges those customers for borrowing the money.

Generation X (1965-1976)

This cohort is the first generation of latchkey children (those who grew up in homes with both parents working), and 50 percent of them have divorced parents.

Social Trends

Various social trends appear to be shaping consumer values in the United States and around the world, including a greater emphasis on health and wellness concerns, greener consumers, and privacy concerns.