1 Chapter 4: The Marketing Environment Designed & Prepared by Laura Rush B-books, Ltd. Introduction to Copyright Cengage Learning 2013 All Rights Reserved

1

Chapter 4: The Marketing Environment

Designed & Prepared by Laura RushB-books, Ltd.

Introduction to

Copyright Cengage Learning 2013

All Rights Reserved

2

Learning Outcomes

LO1 Discuss the external environment of marketing,and explain how it affects a firm

Describe the social factors that affect marketing

Explain the importance to marketing managers of current demographic trends

Explain the importance to marketing managers of multiculturalism and growing ethnic markets

LO2

LO3

LO4


All Rights Reserved

3

Learning Outcomes

Identify consumer and marketer reactions to the state of the economy

Identify the impact of technology on a firm

Discuss the political and legal environment of marketing

Explain the basics of foreign and domestic competition

LO4

LO4

LO4

LO4


All Rights Reserved

4

Factors in the External Environment

• Understanding current customers.• Understanding what drives consumer

decisions.• Identifying the most valuable

customers and understanding their needs.

• Understanding the competition.

LO1 Copyright Cengage Learning 2013

All Rights Reserved

5

The Influence of Values on Buying Habits

Ranked Characteristics of Product Quality

Reliability

Durability

Easy maintenance

Ease of use

Trusted brand name

Low price


All Rights Reserved

6

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.


All Rights Reserved

7

Role of Families and Working Women

• Growth of dual-income families results in increased purchasing power

• Approximately 59% of work-age females are in the workforce

• Working wives bring in 45 percent of the total family earnings.


All Rights Reserved

8

Tweens

• Pre- and early adolescents, age 8 to 12

• Population of 20 million• Direct purchasing power of $50

billion in 2010• View TV ads as “just advertising”• Want to have control over

experiences


All Rights Reserved

9

Teens

• Population of 25 million in U.S.• Approximately 72 hours per week

tuned in electronically• 73 percent of teens are active in

social networking• 91 percent prefer to have real

friends over online friends• 62 percent love to shop


All Rights Reserved

10

Generation Y

• Born between 1979 and 1994

• Largest cohort: more than 75 million members

• Purchasing power of $200 billion annually

• Currently in several different life stages, from mid teens to early thirties


All Rights Reserved

11

Generation X


• Population of 40 million

• Savvy and cynical consumers

• Protective and involved with their kids

• Value the importance of education

• Avid buyers of the latest clothes, technology, and recreational products


All Rights Reserved

12

Baby Boomers


• Population of 75 million

• Boomers are postponing retirement – The 2007-2009 downturn has resulted in loss of $2 trillion.

• Income will continue to grow as they keep working

• Confident, socially conscious group that believes old age starts at 80.


All Rights Reserved

13

Growing Ethnic Markets

• Spending power of ethnic markets in 2013:

– Hispanics--$1.4 trillion– African Americans—$1.2 trillion– Asian Americans--$752 billion

• Diversity can result in bottom-line benefits to companies.


All Rights Reserved

14

Economic Factors

Consumer’s Income

Inflation

Recession


All Rights Reserved

15

Purchasing Power

Purchasing Power- A comparisonof the relative cost of a set

standard of goods and services indifferent geographic areas.


All Rights Reserved

16

Research

Basic research – pure research that aims to confirm an

existing theoryor to learn more about a concept

or phenomenon

Applied research – an attempt to developnew or improved products


All Rights Reserved

17

Technological Factors

• Innovation is becoming a global process.

• The most innovative firms have an average profit margin growth of 3 percent higher than the typical firm.


All Rights Reserved

18

Political and Legal Factors

New technology Society Businesses Consumers

Laws and Regulations Protect:Laws and Regulations Protect:


All Rights Reserved

19

Consumer Privacy

Gramm-Leach-Bliley Act

Health Insurance Portability and Accountability Act (HIPPA)

California’s Notice of Security Breach Law

Government ActionsGovernment Actions

FederalLevel

State Level


All Rights Reserved

20

Competitive Factors

Competition for Market Share and

Profits

• Firms must work harder to maintain profits and market share.

Global Competition

• More foreign firms are entering U.S. market.

• Foreign firms in U.S. now compete on product quality.


All Rights Reserved

Documents

1 Chapter 4: The Marketing Environment Designed & Prepared by Laura Rush B-books, Ltd. Introduction to Copyright Cengage Learning 2013 All Rights Reserved