Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 Prepared by Amit Shah Frostburg...

Copyright ©2009 by Cengage Learning Inc. All rights reserved 1

Prepared byAmit Shah

Frostburg State University

CHAPTER

4

Designed by Eric Brengle B-books, Ltd.

MarketingLamb, Hair, McDaniel

10

The Marketing Environment

Copyright ©2009 by Cengage Learning Inc. All rights reserved

Target Market

2

LO1

Target MarketTarget Market A defined group most likely to

buy a firm’s product.


Social Factors

3LO2

ValuesValues

AttitudesAttitudes

LifestyleLifestyle


Social Factors

4

LO2

Social Factors Influence:Social Factors Influence:

Products purchasedProducts purchased

Prices paid for productsPrices paid for products

Effectiveness of promotionsEffectiveness of promotions

How, where, and when people purchaseHow, where, and when people purchase


Social Factors

5

LO2

Self-SufficiencySelf-Sufficiency

Upward MobilityUpward Mobility

Work EthicWork Ethic

ConformityConformity

Core American Values


The Influence of Values on Buying Habits

6LO2

Ranked Characteristics of Product Quality

Reliability

Durability

Easy maintenance

Ease of use

Trusted brand name

Low price


Component Lifestyles

7

LO2

ComponentLifestyles

ComponentLifestyles

The practice of choosing goods

and services that meet one’s

diverse needs and interests

rather than conforming to a

single, traditional lifestyle.


Demographic Factors

8

LO3

DemographyDemography The study of people’s vital

statistics, such as their age,

race and ethnicity, and

location.

Copyright©2009 by Cengage Learning Inc. All rights reserved

Tweens

9

LO3

Pre- and early adolescents, age 9 to 14

Population of 20 million

Purchasing power of $21 billion in 2008

View TV ads as “just advertising”

Emerging as “the richest generation” and the “most influential generation in history”


Teens

10

LO3

Population of 25 million in U.S.

Purchasing power of $195 billion annually

Approximately 72 hours per week tuned in electronically

68 percent of teens have created profiles on MySpace, Zanga, or Facebook

Shopping has become social sport: 62 percent love to shop


Generation Y

Born between 1979 and 1994


Purchasing power of $200 billion annually

Researchers have found Gen Yers to be:– Impatient– Family-oriented– Inquisitive– Opinionated– Diverse– Time managers– “Street Smart”– Connected

11

LO3


Generation X



Savvy and cynical consumers

More protective and involved with their kids

Value the importance of education

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

12

LO3


Baby Boomers


Population of 77 million—the largest demographic segment

$2 trillion in spending power a year

Income will continue to grow as they keep working

Four segments of baby boomers:“Looking for balance” “Confident and living well” “At ease” “Overwhelmed”

13

LO3


Growing Ethnic Markets

14

LO4

Spending power of ethnic markets in 2008:

– Hispanics--$1 trillion– African Americans--$921 billion– Asian Americans--$526 billion

Diversity can result in bottom-line benefits to companies.


Marketing to Hispanic Americans

15

LO4

The population’s diversity creates challenges for targeting this group.

Hispanics tend to be brand loyal, but are not aware of many U.S. brands.

68% of U.S. Hispanics have home Internet access.


Marketing to African Americans

16

LO4

Many firms are creating products for the African American market.

Promotional dollars and media choices directed toward African Americans continue to increase.


Marketing to Asian Americans

17

LO4

Younger, better educated, and have highest average income of all groups

Sometimes called a “marketer’s dream

Many products have been developed for Asian American market.

Cultural diversity within the Asian American market complicates promotional efforts.


Ethnic and Cultural Diversity

18

LO4

Multiculturalism: occurs when all major ethnic groups in an area (city, county, or census tract) are roughly equally represented

U.S. trend is toward greater multiculturalism

America’s racial and ethnic patterns have taken on distinctly regional dimensions


Economic Factors

19

LO5

Consumer’s Income

Inflation

Recession


Purchasing Power

20

LO5

PurchasingPower

PurchasingPower

A comparison of the relative

cost of a set standard of goods

and services in different

geographic areas.


Inflation

21

LO5

InflationInflation A measure of the decrease in

the value of the money,

expressed as the percentage

reduction in value since the

previous year.


Recession

22

LO7

RecessionRecession A period of economic activity

characterized by negative

growth, which reduces demand

for goods and services.


Recession Marketing Strategies

• Improve existing products and introduce new ones

• Maintain and expand customer services

• Emphasize top-of-the-line productsand promote product value

23LO5


External Marketing Environment

24

LO1

DemographicsDemographics

SocialChangeSocial

Change

EconomicConditionsEconomicConditions

Political & Legal FactorsPolitical &

Legal FactorsTechnologyTechnology

CompetitionCompetition

EnvironmentalScanning

Target Market

External Environment (uncontrollable)

Ever-ChangingMarketplace

ProductDistributionPromotion

Price

ProductDistributionPromotion

Price

Internal (within the

organization)Marketing mix


Technological Factors

25

• Innovation is becoming a global process.

• 25 most innovative firms achieved average profit margin growth of 3.4% per year

LO6


Technological Factors

• U.S. excels at basic and applied research.

• Many firms use the market concept to guide research.

• New technology internally createsa long-term competitive advantage.

• External technology – Creates more efficient operation

or better products– May render existing products obsolete

26LO6


Political and Legal Factors

27LO7

New technology Society Businesses Consumers

Laws and Regulations Protect:Laws and Regulations Protect:


Federal Legislation

28LO7

Sherman ActClayton ActFederal Trade Commission Act Celler-Kefauver Antimerger ActHart-Scott-Rodino Act

Sherman ActClayton ActFederal Trade Commission Act Celler-Kefauver Antimerger ActHart-Scott-Rodino Act

Regulate competitive

environment

Robinson-Patman Act Robinson-Patman ActRegulate pricing

practices

Wheeler-Lea Act Wheeler-Lea ActControl

falseadvertising


Regulatory Agencies

29LO7

Consumer Product Safety Commission

Consumer Product Safety Commission

Federal Trade Commission

Federal Trade Commission

Food & Drug AdministrationFood & Drug

Administration

Protects consumer safety in and around their homes

Prevents unfair methods ofcompetition in commerce

Enforces safety regulations for food and drug products


Competitive Factors

30

LO8

How many competitors?

How big are competitors?

How interdependent isthe industry?

Control

Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 Prepared by Amit Shah Frostburg...

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