MKTG 361 Ch. 3

PC Magazine

"the best free software" article and tells readers about software giveway

US household income

$8,700 in 1970 $51,939 in 2013 due to inflation 1970 made more money' -54% of US households have an annual income of $25,000 to $99,999

Ethnic Diversity

-1 in 3 people are in a asian or native american background -more than 5 million reported more than 1 race

National Association for PET Container Resources

-31% of all plastic bottles are recycled

American Household

-In 1960, 75% of households consisted of married couples. -Today this is only 48% of the population. -20% married w/ children -10% working fathers with stay at home moms -17 million households (21 million young adults) -7.8 million couples -605,000 couples

Deceptive Mail Prevention and Enforcement Act (1999)

-Provides specifications for direct-mail sweepstakes. -Requires that the "No purchase is necessary to enter" statement be displayed in the mailing, rules, and entry form.

gray divorce

-divorce among baby boomers increasing exceeds 40% chance

population living shifts

-early 1900's rural to city -1930's cities to suburbs to exburbs -30% americans live in central cities -50% live in suburbs -20% live in rural locations

Small Businesses

-majority of competitive landscape -28.2 million small business in US -48% of all private sector employees -generate 63% of new jobs and 46% of GDP

generation Y

-people born b/w 1977-1994 -echo-boom or baby boomlet -influences sports, video games, internet, networking and communication -work life balance -sustainability and environment -NOT millennial

baby boomers

-people born between 1946 and 1964 -10,000 retiring every 24 hrs -50% of all consumer spending

generation X

-people born between 1965 and 1976 -baby bust -consumers are self-reliant, supportive of diversity, and better educated -pursue caution, pragmatism, and traditionalism, no extravagance -have less than . baby boomers -on the internet

Sherman Antitrust Act

1890 lobbying by farmers in Midwest against fixed railroad shipping prices led to the passage of this act, forbids (1) contracts, combinations, or conspiracies in restraint of trade and (2) actual monopolies or attempts to monopolize any part of trade or commerce PRICING

Clayton Act

1914 forbids certain actions that are likely to lessen competition, although no actual harm has yet occurred

Robinson-Pa

1935 makes it unlawful to discriminate in prices charged to different purchasers of the same product, where the effect may substantially lessen competition or help create a monopoly

US recessions

1973-75, 1981-82, 1990-91, 2001, 2007-2009

Consumer spending

2/3 of US economic activity is affected by expectations of the future

Population of US Census

321 million people, 2030 to 359 million

generational cohort

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

Internet Tax Freedom Act (2007)

Do Not Track system to ensure online privacy has caused many debates

Campbell Soup Co.

FTC gave a cease and decist order to not have the soup misrepresent the amount of solid ingredients in the soup ( now has a ladle)

cease and desist order

FTC orders a company to stop practices the commission considers unfair

Fastest growing population states

North dakota, texas, utah, wyoming

Consumer Income

The microeconomic trends in terms of consumer income are also important issues for marketers. Having a product that meets the needs of consumers may be of little value if they are unable to purchase it.

population explosion

The rapid growth of the world's human population during the past century, attended by ever-shorter doubling times and accelerating rates of increase

Better Business Bureau (BBB)

This agency is a voluntary alliance of companies whose goal is to help maintain fair practices. non profit -offers Accredited Business Seal Program -Code of Business Practices

blended family

a family formed by merging two previously separated units into a single household

consumerism

a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions

tying agreement

a seller requires the purchaser of one product to also buy another item in the line

exclusive territorial distributorships

a third distribution issue often under regulatory scrutiny

competetive

alternative forms of competition, small businesses

exclusive dealing

arrangement a manufacturer makes with a reseller to handle only its products and not those of competitors

Micropolitan Statistical Area

at least one urban cluster of at least 10,000 but less than 50,000 people and adjacent territory that has a high degree of social and economic integration

metropolitan statistical area

at least one urbanized area of 50,000 or more people and adjacent territory that has a high degree of social and economic integration

barriers to entry

business practices or conditions that make it difficult for new firms to enter the market -can be in form of capital requirements, advertising expenditures, product identity

technological

changing technology, technology's impact on customer value, electronic business technologies

multicultural marketing

combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races

Patent Law

company can protect its competitive position in new product under

FTC Act of 1914

concern with deceptive or misleading advertising and unfair business practices and has the power issue cease and desist orders

Tech of tomorrow

connectivity, computers develop all 5 senses green tech like smart grid and online energy mgmt, 3d tech will mpve to many screens

Regulation

consists of restrictions state and federal laws place on business with regard to the conduct of its activities -protect companies and consumers

Technology Customer Value

cost of tech is lowering, and products focus on other dimensions like quality, service, and relationships

social forces

demographic characteristics of the population and its culture

social

demographic shifts, cultural changes

Demographics

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

Childrens Online Privacy Protection Act (1998), European Union Data Protection Act (1998), Controlling the Assault of Non Solicited Pornography and Marketing (CANSPAM) Act (2004)

designed to restrict information collection and unsolicited e-mail promotions and specify simple opt-out procedure on the internet

political independence

does not matter in todays consumers

Factors that drive competition

entry, the bargaining power of buyers and suppliers, existing rivalries, and substitution possibilities

Fair Packaging and Labeling Act (1966), Child Protection Act (1966) & Consumer Product Safety Act (1972)

established consumer product safety comission to monitor product safety and establish product safety standards

Distribution Related legislation

exclusive dealing, requirement contracts, exclusive territorial distributorships, tying arrangement

power of buyer

exist when they are few in number, low switching costs, or product represents a significant share of the buyers total costs

Oligopoly

few companies control the majority of industry sales ex. verizon, AT&T, Disney, Time Warner, Boeing, Lockheed Martin

echo-boom or baby boomlet

gen Y

baby bust

gen x the number of children born each year was declining

trademarks

intended to protect both the firm selling a trademarked product and the consumer buying it

Infant Formula Act (1980) & Nutritional Labeling and Educational Act (1990)

labeling requirements for dietary supplements and trans fats on foods, drugs, and cosmetics

regulatory

laws protecting competition, laws affecting marketing mix actions, self-regulation

minority

likely to become obsolete as the total size of all ethnic groups will grow from 37% to 50% of the population in 2044

economic

macroeconomic conditions, consumer income

Hispanic

make up 16% of US population $1.3 trillion spent a year

monopolistic competition

many sellers compete with substitutable products within a price range ex. coffee price rises, consumers switch to tea -coupons made alot for this

Advertising and Promotion related Legislation

monitored by the Federal Trade Commission (FTC)

Department of Labor

monitors Consumer Expenditure Survey --13% income for food, 33% for housing, 3% clothes -- savings rate has dropped 2% overall

2 problems with self regulation

noncompliance by members and inforcement, if attempts of self-regulation are too strong they may violate the Robinson-Patman Act

revived growth in urban areas

one of the causes of the recession

Texas

one year texas has increased by more than 450,000 more states near border are becoming larger

Consumer oriented federal laws regarding products

over 30 amendments and seperate laws relating to food, drugs, and cosmetics

macroeconomic level

performance of the economy on indicators such as GDP, unemployment, and price changes (inflation or deflation)

recession

periods of declining economic activity, businesses decrease production, unemployment rises, and many consumers have less money to spend

economy

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

Pricing-Related Legislation

price fixing (illegal) and price discounting

Lanham Act (1946)

provides for registration of company's trademarks

Telephone Consumer Protection Act of 1991

provides requirements for telemarketing promotions, including fax promotions, National Do Not Call Registry

Basic forms of competition

pure competition monopolistic competition oligopoly pure monopoly

450 rePLANET

recycling centers and get paid

Technology

refers to inventions or innovations from applied science or engineering research -each new wave of technological innovation can replace existing products and companies

competition

refers to the alternative firms that could provide a product to satisfy a specific market's needs

Consumers ability to buy

relates to income, which is of gross, disposable, and discrestionary components

requirement contracts

require a buyer to purchase all or part of its needs for a product from one seller for a time period (not always illegal)

College Board

since 2000, tuition and fees have increase 160%, family incomes decreased by 7%

culture

social force, incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group

environmental forces

social, economic, technological, competitive, regulatory

exurs

suburbs to more remote suburbs

Consumer Confidence Index

survey of consumer expectations, by the Conference Board

Index of Consumer Sentiment (ICS)

survey of consumer expectations, by the Survey Research Center at U of Michigan

corrective advertising

the FTC can require a company to spend money on advertising to correct previous misleading ads

Value conciousness

the concern for obtaining the best quality, features, and performance of a product or service for a given price- driving consumption behavior for many products at all price levels

inflationary economy

the cost to produce and buy products and services escalates as prices increase

disposable income

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

discretionary income

the money that remains after paying for taxes and necessities necessity vs. luxury

environmental scanning

the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends

generic

the product has primary come to be merely a common descriptive word for the product ex. Coca-cola, Xerox , Aspirin

Gross Income

the total amount of money made in one year by a person, household, or family unit

gross income

the total amount of money made in one year by a person, household, or family unit

pure competition

there are many sellers and they each have a similar product ex. rice, wheat companies bc theyre in a poisition in which distribution is more important

federal copyright law

way for a company to protect its competitive position in a product author of literacy, dramatic, musical, or artistic work have the all the rights to that work

pure monopoly

when only one firm sells the product -essential to a community ex. water, electricity, cable

power of supplier

when product is critical to the buyer and when it has built up the switching costs

Self regulation

where an industry attempts to police itself

households with unmarried partners and adult children living with parents

which of the following living arrangements are increasing in the US?