Intro to Marketing Ch. 4

recession

definition: is a period of economic activity characterized by negative growth. More precisely, a recession is defined as occurring when the gross domestic product falls for two consecutive quarters. GDP is the total market value of all goods and services produced during a period of time.

inflation

definition:is a measure of the decrease in the value of money, generally as the percentage reduction in value since the previous year, which is the rate of inflation. (ex: an inflation rate of 5% means that you can expect that on average, prices have risen by about 5 percent since the previous year).

when income is high relative to the cost of living, people have more

discretionary income. this means that they have more money to spend on nonessential items (on wants, rather than needs)

value

is a strongly held and enduring belief

marketing to African Americans

1. 54 percent are raised exclusively by their mothers 2. there are more African American households in the US, even though their population is smaller 3. 47 percent are between 18 and 49 years old, which is considered the top spending age demographic by marketers

The two key strategies of effectively marketing to teens

1. Make the product modern and convenient (ex: apple's iPod... easy to use, teens like music) 2. Engage teens through promotions that get them involved (ex: youtube... where millions of teens post videos touting lifestyles, wants, needs, emotions) It's important to engage the teens with interactive contests and voting challenges, and to empower the teen audience with the opportunity to help develop new ideas

consumers incomes

1. US incomes have fallen in recent years 2. annual median US household income was about $50,000 3. income fell the most in the South, West, and Florida 4. education is a primary determinant of a person's potential earning 5. the middle class is being squeezed: with incomes between $50,000 and $140,000, this comprises about 40% of all households 6. stores in recent years that cater to low income consumers like dollar general and family dollar have done well

tweens

1. ages 8-12 2. population: 20 million in USA 3. responsible for sales of over $180 billion annually 4. spend about $30 billion annually 5. fastest growing market: home décor

Generation Y

1. also called the millennial generation (born 1979-1994) 2. spend more than $200 billion annually 3. 77 million Gen Y'rs in US 4. in a lifetime, they will spend $10 trillion 5. Hit the hardest by the great recession (2008-09 economic crash)

the Great Recession of 2008-2009

1. began in December of 2007 2. began with the collapse of inflated housing prices 3. those high prices led people to take out mortgages they couldn't afford from banks that should have known the money would not be repaid. 4. by 2008, the recession had spread around the globe 5. A very slow economic recovery began in 2009 and continues today 6. this was the largest economic downturn since the Great Depression

baby boomers

1. born between 1947-1964 2. average life expectancy at an all time high: 77.4 years 3. control about 70% of America's net worth: $7 trillion 4. spend more money than any other age group 5. they are an ideal group to market to: affluent, experienced, flexible

the three economic areas of concern to most marketers are...

1. consumers incomes 2. inflation 3. recession

marketing to Asian Americans

1. have the highest average family income of all groups: $68,780, this income exceeds the average US household by $15,000 2. 52% of Asian Americans over age 25 have at least a bachelors degree 3. average age is 34 sometimes referred to as a marketers dream (because they are better educated, have higher incomes than average, they are younger) 4. heavy users of technology, they thrive in the US technology sector 5. they also like to shop at stores owned and managed by other Asian Americans

social factors include:

1. our attitudes 2. our values 3. our lifestyles

Generation X

1. people born between 1965-1978 2. consists of 50 million US consumers 3. spent more time without adult support or guidance than other generations 4. many face stagnant careers, growing debt, and a 59% decline in net worth from 2005 to 2010- the largest drop of all age groups 5. home ownership declined more than any other group during the Great Recession 6. constitute 45 percent of households with children 7. this group is the primary target for promoting family oriented products

Teens

1. population: 25 million 2. 95% use the internet 3. 77% own a cell phone

US consumers rank the characteristics of product quality as the following (1-6)

1. reliability 2. durability 3. easy maintenance 4. easy to use 5. a trusted brand name 6. a low price

the four basic American Values are...

1. self sufficiency: every person should stand on his or her own two feet 2. upward mobility: success would come to anyone who got an education, worked hard, and played by the rules 3. work ethic: hard work, dedication to family, and frugality were moral and right 4. conformity: no one should expect to be treated differently from anybody else

the factors within the external environment that are important to marketing managers can be classified as ... (6 things)

1. social factors 2. demographic factors 3. economic factors 4. technological factors 5. political and legal factors 6. competitive

social factors influence:

1. the products people buy 2. the prices paid for products 3. the effectiveness of specific promotions 4. how, where, and when people expect to purchase products

the different age groups that marketers focus on are called...

1. tweens 2. teens 3. Generation Y 4. Generation X 5. Baby Boomers

marketing to Hispanic Americans

1.they prefer products from their home country 2. if the product is not available, they will choose a product that reflect their native culture and values 3. Hispanics make purchases based on the package and design

by 2050, one out of three us citizens will be

Hispanic

The US Hispanic consumer market is now larger than...

all but 13 world economies

social media can be used...

can be used to amplify a professional campaign by inviting consumers to join the conversation about a brand... and hopefully the customers will share their experience with others

environmental scanning

goal: identify future market opportunities

in times of low inflation, businesses seeking to increase their profit margins can do so only by...

increasing their efficiency

purchasing power (aka cost of living)

is a comparison of income versus the relative cost of goods and services in different geographic areas. Put into an equation, it would look like: income minus the cost of living (expenses).

by 2041, whites will make up...

less than 50% of the total population

54 percent of Facebook users who "liked" a brand were

much more likely to purchase that brand

shoppers also have concerns about

nutrition and want to know what's in their food; many have environmental concerns as well

the pew research center's 2012 American values survey found that....

political party affiliation has become the single largest fissure in American society... differences in values are greater between Republicans and Democrats than they are between different genders, ages, races, or classes.

people are directly or indirectly the basis of all markets, making population

the most basic statistic in marketing

Social change is perhaps....

the most difficult external variable for marketing managers to forecast, influence, or integrate

component lifestyles

the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle

a demography is

the study of people's vital statistics, such as age, race and ethnicity, and location

environmental management

when a company implements strategies that attempt to shape the external environment within which it operates