2/9/11Chapter 4 – Marketing Environment- Target Market: defined group most likely to buy a product.o Changes as consumers ageo External elements change consumers’ desires- Marketing mix can be controlled however the external environment cannot be controlled. Unless the external environment is understood then a firm cannot adequately plan for the future. [Product, Place, Price, Promotion]- Elements of External Environment (uncontrollable) – demographics, social change, economic conditions, political & legal factors, technology, and competition- Environmental scanning – the process of evaluating the external environment identifies future actions- Social Factors [self sufficiency, upward mobility, work ethic, conformityCore American Values]o Attitudeso Valueso Lifestyles- Component Lifestyles- practice of choosing goods and services that meet one’s divers needs and interest rather than conforming to a single, traditional lifestyleo Today’s consumers want multifunctional productso No longer defined by occupation or traditional roles- Demographic factorso Characteristics relate to buyer behavioro Tailoring products to customers value is key to saleso Cohorts have their own needs, values, and consumptions patterns- Social Factors influenceo Products purchased o Prices paid for productso Effectiveness of promotionso How, where and when people purchase- Social Factors Core American Valueso Self-Sufficiencyo Upward Mobilityo Work Ethico Conformity- The influence of Values on Buying Habitso Ranked characteristics of Product Quality Reliability Durability Easy maintenance Ease of use Trusted brand name Low price2/9/11- 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.o Today’s consumers want multifunctional products. No longer defined only by occupation- Role of Families and Working Womeno Growth in dual-income families results in increased purchasing powero Approximately 63% of work-age females are in the workforceo Women expect different things in life Purchase bulk of technology products  Second largest group of home buyers after coupleso Single households outnumber married householdso Working women have had a bigger impact than any other social factor on the market- Demographic Factors (age, race/ethinicity, location)o People are the basis for any marketo Demographic characteristics relate to buyer behavior Uncontrollable Defined characteristics define marketing direction- Tweens – growing market of societal demographyo Pre- and early adolescents, age 9-14o Population of 20 milliono Purchasing power of $21 billion in 2008 (HUGE purchasing power)o View TV ads as “just advertising” (72 hrs per week tuned into advertising)o Emerging as “the richest generation” and the “most influential generation in history”- Generation Yo Born between 1979 and 1994o Population of 73 milliono Purchasing power of $200 billion annuallyo Researchers have found Gen Yers to be: Impatient Family-oriented Inquisitive Opinionated Diverse Time managers “street smart” Connected- Generation Xo Born between 1965 and 1978o Population of 40 milliono Savvy and cynical consumerso More protective and involved with their kidso Value the importance of educationo Avid buyers of the latest clothes, technology, and recreational products2/9/11- Baby Boomers – largest demographic segment in US – working the longest out of all generationso Born between 1946 and 1964o Population of 77 million – the largest demographic segmento $2 trillion in spending power a yearo Income will continue to grow as they keep workingo Four segments of baby boomers: “Looking for balance” – ¼ of all Boomers. Looking for time-saving products “Confident and living well” – ¼ of all Boomers. Enjoy high incomes and spend money on travel and luxury goods “At ease” – 30% of Boomers have modest taste and are family-oriented. “Overwhelmed” – less than 20% = low incomes and concerned about well-being- Growing Ethnic Marketso Spending power of ethnic markets in 2008 Hispanics - $1 trillion African Americans - $921 billion Asian Americans - $526 billiono Diversity can result in bottom-line benefits to companieso By 2042 whites will account for less than half US population – huge shift in workforce/market- Marketing to Hispanic Americanso The population’s diversity creates challenges for targeting this groupo Hispanics tend to be brand loyal, but are not aware of many U.S. brands. (immigrants tend to prefer products from home countries)o 68% of U.S. Hispanics have home Internet access The NBA expands its appeal with pages appealing directly to the Spanish-language market- Marketing to African Americanso Many firms are creating products for the African American marketo Promotional dollars and media choices directed toward African Americans continue to increaseo In general…not a huge difference btwn. marketing to African American and otherethnicities- Marketing to Asian Americans o Younger, better educated, and have highest average income of all groups. Sometimes called a “marketer’s dream”o Many products have been developed for Asian American marketo Cultural diversity within the Asian American market complicates promotional efforts- Ethnic and Cultural Diversity (San Francisco = most diverse county in US)o Multiculturalism: occurs when all major ethnic groups in an area (city, county, or census tract) are roughly equally representedo U.S. trend is toward greater multiculturalism2/9/11o America’s racial and ethnic patterns have taken on distinctly regional dimensions- Why Multicultural Marketing?o About 1 in 3 US residents is a minority, representing over 100.7 million pplo 7 states more than tripled their Hispanic population between 1990 and 2000: Alabama, Arkansas, Georgia, North Carolina, South Carolina, Tennessee, and Nevadao 20% percent of babies born in the US are Latino- Economic Factorso Consumer’s incomeo Purchasing Powero Inflationo Recession- Consumers’ Incomeso Median US household income in 2008 was approximately $49,000o Incomes have risen at a slow paceo Education is the primary determinant of earning potential- Rising incomes do not necessarily mean a higher standard of living.- Customers with high purchasing power can spend more on products- The Financial Power of