The Marketing Environment LO1 The external marketing environment Target market defined group that managers feel is most likely to buy a firm s product Environmental scanning collect and evaluate environmental information to identify future market opportunities and threats Environmental management when a company implements strategies to attempt to shape the external environment within which it operates Social change is the most difficult external variable for marketing manager to forecast influence or integrate into marketing plans o Attitudes values lifestyles Value strongly held and enduring belief Four basic values strongly influenced in attitudes and LO2 Social factors lifestyles in America o Self sufficiency o Upward mobility o Work ethic o Conformity o Getting off the grid o Meaningful green o EcoTechMed Trends becoming American values Component lifestyles the practice of choosing goods and services that meet ones diverse needs and interests rather than conforming to a single traditional lifestyle Working women has had a greater effect on marketing than any other social change Most people feel that they do not have enough time LO3 Demographic Factors Demography the study of peoples vital statistics such as age race and ethnicity and location Population the most basic statistic in marketing Generation groups o Tweens 8 12 o Teens make the product modern and convenient engage teens through promotion that gets them involved o Generation Y born between 1979 and 1994 aka Millenials Inquisitive opinionated diverse time managers quick shoppers want fulfillment multitaskers environmentally aware o Generation X born between 1965 and 1978 first generation of latchkey children o Baby boomers 1946 1964 postponing retirement LO4 Growing Ethnic Markets Hispanic Americans brand loyal African Americans younger Asian Americans highest average family income technology LO5 Economic Factors Three areas of greatest concern to most marketers o Incomes o Inflation a measure of the decrease in the value of money generally expressed as the percentage reduction in value since the previous year o Recession a period of economic activity characterized by negative growth GDP falls for two consecutive quarters Purchasing power measured by comparing income to the relative cost of a set standard of goods and services in different geographic areas aka cost of living income cost of living LO6 Technological Factors Research o Basic research aka pure research attempts to expand the frontiers of knowledge but is not aimed at a specific pragmatic problem o Applied research attempts to develop new or improved products o Stimulating innovation build scenarios enlist the web talk to early adopters use marketing research create an innovative environment cater to entrepreneurs LO7 Political and Legal factors Business needs government regulation to protect innovators of new technology the interests of society in general one business from another and consumers Federal legislation competitive environment pricing advertising promotion consumer privacy State laws Regulatory agencies o Consumer Product Safety Commission CPSC federal agency established to protect the health and safety of consumers in and around their homes o Food and Drug Administration FDA federal agency charged with enforcing regulations against selling and distributing adulterated misbranded or hazardous food and drug products o Federal Trade Commission FTC federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce LO8 Competitive Factors Competitive environment encompasses the number of competitors a firm must face the relative size of the competitors and the degree of interdependence within the industry Competition for market share and profits Global competition
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