MARK3001 1st Edition Lecture 2 Outline of Last LectureI. Target MarketA. Definition of Target MarketI. The 4 P’sII. Exchange of ValueA. Definition of ValueB. What makes up utility?III. Assortment Long-Term RelationshipIV. B2B (Business-to-Business) MarketingA. For B2B Marketing, the 4 P’s mean different things than between product andconsumerB. Marketing as a company philosophyC. Purpose of the organization is to satisfy consumer needs and wants, while meeting the organizational objectivesD. Key questionE. Other Orientations:a. Productionb. Salesc. Example – Ford’s market share declineOutline of Current Lecture V. Advancing beyond the marketing conceptA. Societal marketing orientationa. Key question VI. Marketing EnvironmentA. Definition of marketing environmentB. Environmental ScanningVII. External Environmental FactorsA. DemographicsB. SocialC. EconomicsD. TechnologicalE. Political and LegalF. CompetitiveVIII. Demographic Factors in the USA. Current US DemographicsIX. Age Cohorts in the USA. TweensB. TeensC. Generation “Y”D. Generation “X”E. Baby BoomersX. Growing Ethnic Markets in the USXI. Social Factors in the USA. ValuesB. ConformityC. IndividualityD. Work to liveE. TimeXII. Economic FactorsA. Overall economyB. Consumer’s ability to purchaseC. Consumer’s willingness to purchase. This is affected by:a. Incomeb. Business cycles and perceptions (how we feel and perceive the economy)i. Recession ii. Recovery iii. Prosperity iv. Depression v. Where can we find this information? vi. Consumer PerceptionsCurrent LectureI. Advancing beyond the marketing conceptB. Societal marketing orientationa. Key question II. Marketing EnvironmentC. Definition of marketing environmentD. Environmental ScanningIII. External Environmental FactorsG. Demographics: population statisticsH. Social: values and beliefs (cigarettes, bottled water, etc.)I. Economics: income and business (national and personal)J. Technological: innovationK. Political and Legal: lawsL. Competitive: what others are doingIV. Demographic Factors in the USB. Current US Demographics:a. 316 million peopleb. 115 million householdsc. 49.2% men and 50.8% womend. Median age is 37 (½ above and ½ below)e. Census Bureau is available to find all of these figuresV. Age Cohorts in the USF. Tweensa. 8-12 years oldb. 20+ millionc. Forming attitudesd. Access to infoe. Spend 200+ billion/yrf. Cynical towards ads – rarely click throughG. Teensa. 13-17 years oldb. 25 millionc. Spend 72 hours/week on electronicsd. 93% use internet and 74% use cellphonese. 75% have accounts on Facebookf. See shopping as a social sportg. Very engaged with advertisementsH. Generation “Y”a. 18-32 years oldb. 75+ millionc. Millenniumsd. Wide range of life cycles (18 year old vs. 32 year old)e. Inquisitive, diverse, time managers, multi-taskers, identify with brandsI. Generation “X”a. 33-47 years oldb. 40 millionc. Focus on children, could tend to be “helicopter parents” or parents who are very overprotectived. Biggest spenders at mass merchandiserse. Value educationJ. Baby Boomersa. 48-66 years oldb. 75 millionc. control 80% of personal wealth in the USd. More active than previous – “they never age”, meaning they still think and act like they are younge. Most are postponing retirementf. Highly involved in lives of adult children and grandchildren VI. Growing Ethnic Markets in the USA. Currently minorities represent 37% of the US populationB. 50.4% of all children belong to a minority groupC. These groups assimilate to US culture but also have strong interest in preserving native heritageD. What does this mean?a. There is a huge market to satisfy those ethnic needsVII. Social Factors in the USF. Values: self-sufficiency, work ethic, upward mobility (the American Dream)G. Conformity: no one should expect special treatment, equalityH. IndividualityI. Work to live (not live to work)J. Time is an issue, always busy and on the goVIII. Economic FactorsD. Overall economyE. Consumer’s ability to purchaseF. Consumer’s willingness to purchase. This is affected by:a. Incomei. Median household income in 2012 was $50,502.00ii. In 2007 it was $54,300.00iii. Consumer’s willingness to spend is also affected by the savingsrateb. Business cycles and perceptions (how we feel and perceive the economy)i. Recession – falling income, employment, and production (focus of advertising is on value)ii. Recovery – rising income, employment, and production (focus of advertising is on “buy now for better times later”)iii. Prosperity – high income, employment, and production (focus of advertising is on convenience or consumer rewards)iv. Depression – low income, employment, and production (focus of advertising is on basic needs. Very basic, essential products are about only things you can sell during a depression)v. Where can we find this information? Bureau of Labor Statisticsand GDPvi. Consumer Perceptions: the consumer confidence index from the Conference Board, and the misery index (unemployment rate + inflation