Chapter 3 The Marketing Environment Microenvironment The actors close to the company that affect its ability to serve its customers The company The suppliers Marketing Intermediaries firms that help the company promote sell and distribute its goods to final buyers Customer markets Competitors Publics any group that has an actual or a potential interest or impact on an organization s ability to achieve its objectives Macroenvironment LARGE societal forces that affect the microenvironment demographic economic natural technological political and cultural forces Target Market A defined group most likely to buy a firm s product and who the marketer selects to pursue Your company and your target market s will be impacted by external broad societal forces the macroenvironment Consumer demographics Social factors Economic conditions Political Legal Factors Technology Natural Environment 1 The Demographic and Social Environment Demography The study of people s vital statistics such as their gender age race ethnicity and location Understanding Generations Greatest generation Fought in WW2 Grandpa Born 1901 24 Generation X Born 1961 81 Silent Born 1925 42 Baby Boomers Hippies Individualism Born 1943 60 Generation Y Millennial The New Power Players in the Economy Entitled Born 1982 04 Generation Z Connected from birth Born mid 1990s to 2010 Current age 0 18 True digital natives Defining the Modern Family Extended family vs nuclear family Just what is a household US Census Family household contains at least two people related by blood or marriage Trends in U S Household Structure Delayed Marriage Average Age at first marriage Men 28 9 women 26 9 Cohabitation Dual Career Families Divorce Smaller Families Increase in Nontraditional Family Structures Any occupied housing unit is a household Same sex households are increasingly common marketers target them as unit Rise of single person households Voluntarily childless women and childless couples are attractive market segments Two income couples without children are better educated and have more professional managerial occupations DINKS double income no kids Who s Living at Home Traditional extended family is alive and well Sandwich generation Many adults Gen X are caring for parents and children Boomerang kids Millennials Living with parents longer or moving back in Spend less on housing staples and more on entertainment Family Life Cycle Models and demand for product categories Age Marital status Presence absence of children in home and child age Useful models take into account the following variables in describing longitudinal changes in priorities Such factors allow us to identify categories of family situation types e g Full Nest In general spending increases as households shift from young singles to young married and then remains high until falling sharply at the older married or older singles stages Life Cycle Effects on Buying FLC Family Life Cycle model categories show marked differences in consumption patterns Young bachelors and newlyweds Those in early 20s Families with young children Single parents older children Newlyweds Older couples bachelors Most likely to exercise go to bars concerts movies Apparel electronics gas Health foods Junk foods Appliances e g toaster ovens Home maintenance services 2 The Economic Environment The Economic Environment money consumer s spending patterns General economic conditions affect the way consumers allocate their Consumer confidence the extent to which people are optimistic or pessimistic about the future health of the economy Influences how much discretionary money they will pump into the economy 3 Technological Factors Technological Environment Forces that create new technologies creating new product and market opportunities New technologies can create new opportunities New technology internally can create a long term competitive advantage External technology Creates more efficient operation or better products May render existing products services obsolete Ex iphone 5 new charger 4 The Government and Political Environment Political environment laws government agencies and pressure groups that influence and limit various organizations and individuals in a given society Legal and political decisions can have a major effect on a variety of products and on the method used to market these products The government passes laws and then determines the degree of enforcement of these laws Laws are primarily designed for any one of 3 purposes 1 Protection of business organizations from each other Coke spends money to build brand 2 Protections of customers from unfair business practices False advertising 3 Protection of society from business interest that may be harmful to that society EPA environmental protection agency Example FTC and Deceptive Advertising FTC Federal Trade Commission Division of Advertising Practices The Division of Advertising Practices protects consumers from unfair or deceptive advertising and marketing practices that raise health and safety concerns as well as those that cause economic injury It brings law enforcement actions in federal district court to stop fraudulent advertising practices 5 The Natural Environment Natural Environment that are affected by marketing activities the physical and the natural resources that are needed as inputs marketers or Environmental Sustainability Developing strategies and practices that create a world economy that the planet can support indefinitely sustainable business practices Growing segment of green consumers and of companies that want to develop environmentally Beware Greenwashing misleading information to conceal abuse of the environment superficial or insincere display of concern for the environment Book Adds The Cultural Environment Institutions or other forces that affect society s basic values perceptions preference and behaviors Views of Themselves Others Organizations Society Nature
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