Ch. 3 Marketing 341

Economic Environment (3)

Key Economic Trends -Recession --Economic data trending down --Stock market being battered --Retirement savings decreasing -High gas prices, high commodity prices --Business and personal expenses raising -Consumer spending patterns are changing --Consumer confidence is down and consumers shutting their wallets -Consumers paying down debt

Hofstede's 5 Cultural Dimensions

power distance, individualism, masculinity vs femininity, uncertainty avoidance, ST/LT orientation

Competition: The Microenvironment

Competition means the alternatives from which the target may choose -Level 1: competition for discretionary income (for income left after a consumer pays for necessities) -Level 2: product competition in which different products attempt to satisfy the same needs or wants (recreation) -Level 3: brand competition in which competitors offering similar products compete for consumer choice

Natural Environment

Concern for the natural environment has grown steadily, increasing the importance of these trends: -Shortage of raw materials -Increased pollution -Increased governmental intervention -Sustainability

Economic Environment (2)

Disney's Two-Tiered Market -Distinctly different items are targeted to each market.

Demographic

Demographic Trends -World population growth -Changing age structure -The U.S. population consists of multiple  generational groups. -Baby boomers, Generation X, and  Millenials are key clusters or groups. -Distinct segments exist within  generational groups. -Demographics: The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

Economic Environment

Economic factors that affect consumer purchasing power and spending patterns -Industrial economies -Rich markets for many different kinds of goods -Subsistence economies -Consume most of their own agricultural and industrial output -Offer few market opportunities -Developing economies -Offer outstanding marketing opportunities for the right kinds of products

About YOU

Level 1 - What after groceries? Level 2 - What to do on weekends? Level 3 - Which movie to see?

A Quick Look

Macroenvironment on outside Microenvironment on inside Marketing Management on most inside

Responding to Marketing Environment

Reactive responses (passive): -Many firms simply react to changes in the marketing environment. Proactive responses (environmental management): -Some firms attempt to manage the marketing environment via aggressive actions designed to affect the publics and forces in the marketing environment.

More about Millenials

September 11th generation Wireless generation - constant communication Take multiculturalism for granted Helicopter parents - parents highly involved Team players and active in community Women on the rise, men are falling behind Short attention span Diverse use of media Black and white answers Growing separation between rich and poor

The Macroenvironment

The company and all of the other actors operate in a larger MACROENVIRONMENT of forces that shape opportunities and pose threats to the company. -Think of the marketing macroenvironment as all the 'things' that can directly affect the marketing process, yet the firm is not able to directly (although it might be able to indirectly) affect itself.

Figure 3.2

This figure shows the six major forces in the company's macroenvironment

Generation X

-49 million people born between 1965 and 1976 -Most educated generation to date -Represents $125 billion in annual purchasing power -Maintain a cautious economic outlook; careful spenders -Less materialistic than other generations -Skeptical of marketing

Baby Boomers

-78 million people born between 1946 and 1964 -Many mini-segments exist within the boomer group -Entering peak earning years as they mature -Lucrative market for travel, entertainment, housing, and more -Represent strong targets for financial services More about this generation: -As baby boomers age, their desire for vitality and continued good health become increasingly important -Many marketers are already attempting to satisfy these needs by developing new goods and services

Millenials

-80 million people born between 1982 and 2000 -Represents $733 billion in annual purchasing power -Ethnically diverse -Fluent with digital technology -Personalization and product customization are key to marketing success -Challenging target for marketers

Cause-related Marketing

-Cause-related marketing is a form of corporate giving that demonstrates a firm's social responsibility -Home Depot linked up with KBoom! to "create a great place to play within walking distance of every child in America."

Technological Environment

-Changes rapidly, creating new markets and opportunities and/or danger of products becoming obsolete. -Challenge is to make practical, affordable new products. -Safety regulations result in higher research costs and longer time between product conceptualization and introduction. -Technology is an investment a firm must make to succeed -Patents protect inventions

Political Environment

-Includes laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. -Areas of concern: --Increasing legislation --Changing government agency enforcement --Increased emphasis on ethics and socially responsible behavior -Business legislation is enacted: --To protect companies from each other --To protect consumers from unfair business practices --To protect the interests of society against unrestrained business behavior

Actors in the Microenvironment

-This figure shows the major actors in the marketer's microenvironment. -In designing marketing plans, marketing management takes other company groups into account. -Suppliers provide the resources needed by the company to produce its goods and services. Supplier problems can seriously affect marketing. -Marketing intermediaries help the company promote, sell, and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. -Marketers must gain strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers. -A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. These include financial, media, government, citizen-action, local publics, general, and internal publics. -Customers are the most important actors in the company's microenvironment. Customers include consumer markets, business markets, reseller markets, and international markets.

Generation Z

Kids, tweens, teens Buying power - direct and influence-intensive "Digital in their DNA" Online shopping Love sensory overload

The Culture Iceberg Concept

Surface Culture: -Food, flags, festivals, fashion, holidays, music, performances, dances, games, arts, lit, languague Deep Culture: -Communication Styles and Rules (expressions), Notions of (manners), Concepts of (self, time) , Attitudes toward (expectations), Approaches to (religion, marriage)