Marketing ch. 3

How is diversity increasing

markets are becoming more diverse - international - national Includes: - ethnicity - gay and lesbian - disabled - Pink/grey dollar

Baby Boomers?

- Baby boomers include people born between 1946 and 1964 - More affluent middle class - Aging populations

What are more people doing right now?

- Divorcing or separating - Choosing not to marry - Choosing to marry later - Marrying without intending to have children - Increased number of working women - Stay at home dads

Technological environment?

-Most dramatic force in changing marketplace - Creates new products and opportunities - Safety of new product always a concern

What are the changing age structures of the population?

1. Baby boomers 2. Generation X 3. Millennials

What are the components of the company's macroenvironment?

1. Demographic 2. Economic 3. Natrual 4. Technological 5. Political 6. Cultural

What are the responses to the marketing environment?

1. Proactive - Aggressive actions to affect forces in the environment 2. Reactive - Watching and reacting to forces in the environment

What are the types of marketing intermediaries?

1. Resellers 2. Physical distribution firms 3. Marketing services agencies 4. Financial intermediaries

Who are the actors in the microenvironment?

1. The company 2. Suppliers 3. Marketing intermediaries 4. Competitors 5. Publics 6. Customers

Describe the 5 types of customer markets

1. consumer markets: individuals and households that buy goods and services for personal consumption 2. Business markets: buy goods and services for further processing or use in their production processes 3. Reseller markets: buy goods and services to resell at a profit 4. Government markets: consist of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them 5. International markets: consist of these buyers in other countries, including consumers, producers, resellers and governments. Each market type has special characteristics that call for careful study by the seller.

Define Generation X

49 million people born between 1965-76.

What is the role of the customers in the microenvironment?

Aim of entire value delivery system = - To serve target customers and create strong relationships 5 types of customer markets: 1. Consumer (B2C) 2. Business (B2B) 3. Reseller 4. Government 5. International

Define publics

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. 7 types: 1.Financial publics - company's ability to obtain funds : banks, investment analysts, stockholders 2. media publics - news, features, editorial opinion, newspapers, magazines, tv stations, blogs, internet media 3. Government publics - government developments, company lawyers on issues of product safety, truth in advertising and other matters 4. Citizen-action publics: consumer organizations, environmental groups, minority groups. 5. Local publics: neighborhood residents, community organizations 6. General public: general public's attitude toward its products and activities. 7. Internal publics: workers, managers, volunteers, board of directors

Discuss how companies can react to the marketing environment. (pp 113-115)

Companies can passively accept the marketing environment as an uncontrollable element to which they must adapt, avoiding threats and taking advantage of opportunities as they arise. Or they can take a proactive stance, working to change the environment rather than simply reacting to it. Whenever possible, companies should try to be proactive rather than reactive.

Define political environment

Consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

How do beliefs affect the cultural environment?

Core beliefs and values are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and government Secondary beliefs and values are more open to change and include people's views of themselves, others, organizations, society, nature, and the universe

Compare and contrast core beliefs/values and secondary beliefs/values. Provide an example of each and discuss the potential impact marketers have on each.

Core beliefs/values have high degree of persistence. Eg. most Americans believe in individual freedom, hard work, getting married and achievement and success. These beliefs shape more specific attitudes and behaviors found in everyday life. Passed on from parents to children and are reinforced by schools, churches, business and government Secondary beliefs/values are more open to change. Believing in marriage is a core belief; believing that people should get married early in life is a secondary belief. Marketers have some chance of changing secondary values but little chance of changing core values. For example, family planning marketers could argue more effectively that people should get married later than not get married at all.

Cultural environment?

Cultural environment consists of institutions and other forces that affect a society's basic values, perceptions and behaviors

What is the demographic environment?

Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics Demographic environment is important because it involves people, and people make up markets Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity

Explain how changes in the demographic and economic environments affect marketing decisions. (pp 96-104)

Demography is the study of the characteristics of human populations. Today's demographic environment shows a changing age structure, shifting family profiles, geographic population shifts, a better-educated and more white-collar population, and increasing diversity. The economic environment consists of factors that affect buying power and patterns. The economic environment is characterized by more frugal consumers who are seeking greater value—the right combination of good quality and service at a fair price. The distribution of income also is shifting. The rich have grown richer, the middle class has shrunk, and the poor have remained poor, leading to a two-tiered market

What does the economic environment consist of?

Economic environment consists of factors that affect consumer purchasing power and spending patterns.

What is the role of the competitors in the microenvironment?

Firms must gain strategic advantage by positioning their offerings against competitors' offerings

Generation X?

Generation X includes people born between 1965 and 1976 - high parental divorce rates - Cautious economic outlook - Less materialistic - Family comes first - Lag behind on retirement savings.

Define natural environment

Involves the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. The unexpected happenings in the physical environment - anything from weather to natural disasters - can affect companies and their marketing strategies. Although companies can't prevent such natural occurrences, they should prepare contingency plans for dealing with thelm.

Political environment?

Legislation regulating business - Increased legislation - Changing government agency enforcement Increased emphasis on ethics - socially responsible behavior - cause related marketing

Millennials?

Millennials (gen Y or echo boomers) include those born between 1977 and 2000 - Comfortable with technology Includes: - Tweens (ages 8-12) - Teens (13-19) - Young adults (20s)

Shifts in secondary cultural values?

People's view of themselves - Serving yourself vs. serving others - self-expression People's view of others - more "cocooning" -social networks People's view of organizations People's view of society - Patriots defend it - Reformers what to change it - Malcontents want to leave it People's view of nature - some feel ruled by it - some feel in harmony with it - some seek to master it People's view of the universe - Renewed interest in spirituality

What is the role of suppliers in the microenvironment?

Provide the resources to produce goods and services - supply availability -costs Treated as partners to provide customer value

Define marketing environment

The actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers

Define Microenvironment

The actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors and publics

Describe the environmental forces that affect the company's ability to serve its customers. (pp 93-96)

The company's microenvironment consists of actors close to the company that combine to form its value delivery network or that affect its ability to serve its customers. It includes the company's internal environment—its several departments and management levels—as it influences marketing decision making. Marketing channel firms—suppliers, marketing intermediaries, physical distribution firms, marketing services agencies, and financial intermediaries—cooperate to create customer value. Competitors vie with the company in an effort to serve customers better. Various publics have an actual or potential interest in or impact on the company's ability to meet its objectives. Finally, five types of customer markets exist: consumer, business, reseller, government, and international markets. The macroenvironment consists of larger societal forces that affect the entire microenvironment. The six forces making up the company's macroenvironment are demographic, economic, natural, technological, political/social, and cultural forces. These forces shape opportunities and pose threats to the company.

Define Macroenvironment

The larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, and cultural forces.

What does the marketing environment include?

The marketing environment includes the actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with customers

Identify the major trends in the firm's natural and technological environments. (pp 104-106)

The natural environment shows three major trends: shortages of certain raw materials, higher pollution levels, and more government intervention in natural resource management. Environmental concerns create marketing opportunities for alert companies. The technological environment creates both opportunities and challenges. Companies that fail to keep up with technological change will miss out on new product and marketing opportunities.

Explain the key changes in the political and cultural environments. (pp 107-113)

The political environment consists of laws, agencies, and groups that influence or limit marketing actions. The political environment has undergone changes that affect marketing worldwide: increasing legislation regulating business, strong government agency enforcement, and greater emphasis on ethics and socially responsible actions. The cultural environment consists of institutions and forces that affect a society's values, perceptions, preferences, and behaviors. The environment shows trends toward "mass mingling," a lessening trust of institutions, increasing patriotism, greater appreciation for nature, a changing spiritualism, and the search for more meaningful and enduring values.

Define Demography

The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics

Define marketing intermediaries

This helps the company promote, sell, and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies and financial intermediaries.

Define environmental sustainability

an effort to create a world economy that the planet can support indefinitely. Environmental sustainability means meeting present needs without compromising the ability of future generations to meet their needs.

Who are the publics?

any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives - financial publics - media publics - government publics - citizen-action publics - local publics - general publics - internal publics

Define Millennials (Generation Y)

born between 1977-2000 number 83 million.

Define economic environment

consists of factors that affect consumer purchasing power and spending patterns. 1. industrial economies: rich markets for many different kinds of goods 2. subsistence economies: consume most of their own agricultural and industrial output and offer few market opportunities. 3. developing economies: can offer outstanding marketing opportunities for the right kinds of products

Define cultural environment

consists of institutions and other forces that affect a society's basic values, perceptions, preferences and behaviours.

Define Baby boomers

post war, born between 1946-1964, produced 78 million.

Define Technological environment

the most dramatic force now shaping our destiny. Has released wonders and horrors and mixed blessings. Our attitude toward technology depends on whether we are more impressed with its wonders or its blunders.