Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 4 1 4 1 The External Marketing Environment Target Market As markets mature some new consumers become part of the target market a defined group most likely to buy a firm s product and others drop out so the marketing mix must be changed Managers can control the marketing mix but they cant control the elements in the external environment that cause the target market to change o Understanding the External Environment The goal in gathering environmental data through environmental scanning is to identify future market opportunities and threats o Environment Management Marketing managers cant change the external environment so they must continuously adapt to it Environmental Management attempt to shape the external environment within which it operates when a company implements strategies that Factors within the external environment include 4 2 Social Factors Most difficult external variable for marketing managers to forecast influence or integrate into marketing plans Social Demographic Economic Technological Political and Legal Competitive Social factors include Attitudes Values Lifestyles They influence The products people buy The prices paid for products The effectiveness of specific promotions How where and when people expect to purchase products o American Values Value U S s 4 Basic Values Self sufficiency strongly held and enduring belief Every person should stand on his or her own two feet Upward Mobility Success would come to anyone who worked hard got an education and played by the rules Hard work dedication to family and frugality were moral and Work Ethic right Conformity No one should expect to be treated different from anyone else Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 4 2 Values influence our buying habits Ranking of characteristics of product quality 1 Reliability 2 Durability 3 Easy Maintenance 4 Ease of Use 5 A Trusted Brand Name 6 A Low Price o The Growth of Component Lifestyles Component Lifestyles meet one s diverse needs and interests rather than conforming to a single traditional lifestyle the practice of choosing goods and services that Component lifestyles increase the complexity of consumers buying habits marketing mix The unique lifestyle of every consumer can require a different o The Changing Role of Families and Working Women Component lifestyles have evolved because consumers can choose from a growing number of goods and services and most have the money to exercise more options The growth of dual income families has increased purchasing power 59 of females between 16 65 are working Working wives bring in 45 of total family earnings Working women has probably had a greater impact on marketing than any When a woman s earnings grow so do their levels or expertise experience other social change and authority o There is Never Enough Time Research shows that the percent of people who say they never have enough time to do all that they need to do keeps increasing Over 80 of the working population is worried about having too little time Americans spend 60 of their time awake at work 4 3 Demographic Factors ethnicity and location Demography the study of people s vital statistics such as age race and Important because the basis for any market is people Demographic characteristics are strongly related to consumer buyer behavior in the marketplace o Population People are directly or indirectly the basis of all markets making population the most basic marketing statistic The majority of the population increase in the US is occurring in about 12 People who are able to move are relocating from the suburbs back to cities states where there are more jobs Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 4 3 Tweens Teens Generation Y Generation X Baby Boomers Ages 8 12 Population of 20 million Spend over 200 Billion annually About 50 Billion per year directly and the rest is spent on them by their parents family members and friends Population of 25 million Spend approx 72 hours on electronics each week Average teen earns 45 per week and a substantial amount of their earnings is spent on fashion Millennial generation Ages 17 31 Born between 1984 1979 Spend over 200 Billion annually Originally smaller in size than the baby boomers but in 2010 they passed them in total population due to immigration Born between 1965 1978 Ages 30 s and 40 s Consist of 40 Million Consumers First generation latchkey children Marketing to them is difficult Born between 1946 1964 Ages mid 60s to late 40s In 2010 they were about 75 million Many boomers are postponing retirement after being hurt by the economic downturn o Teens Two keys to effectively market to teens Make the product modern and convenient Engage teens through promotions that get them involved o Generation X First generation of the latchkey children Products of dual career households Divorced separated parents Spent more time without adult support than any other age group Marketing to them is difficult o Baby Boomers People in their 50s may work longer than any other generation and reach their spending peak at around age 54 Only 23 of people over 55 have more than 250 000 in savings and investment Many baby boomers are postponing retirement Younger boomers reached their spending peak prior to age 54 and older boomers have to cut back as well to build their nest eggs 4 4 Growing Ethnic Markets The minority population in the US reached 110 Million in 2011 1 in 3 Residents is a minority Non white minorities account for 49 of the children born in the US Companies have recognized that diversity can result in bottom line benefits o Marketing to Hispanic Americans Hispanics are estimated to have 1 4 trillion in purchasing power in 2013 By 2050 1 in 3 US residents will be Hispanic 60 of Hispanic Americans are of Mexican descent 10 come from Puerto Rico Rachel Lissak BMGT350 D Whitney Fall 2011 Ch 4 4 The diversity of the Hispanic population and the language differences create many challenges for those trying to target this market Prefer products from their native country Brand loyal but unaware of mainstream US brands o Marketing to African Americans African Americans are estimated to have 1 2 trillion in purchasing power in 2013 47 are between 18 49 which is considered the top spending age demographic bracket More African American households than Hispanic because Hispanics have bigger families Young people are realizing that hard work and good education can create opportunities which once
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