External Marketing Environment

External Marketing Environment

1. TARGET MARKET

   • Group of people or organizations for which an org designs, implements, and maintains a marketing mix intended to meet the need of that group, resulting in mutually satisfying exchanges.

2. ENVIRONMENTAL MANAGEMENT

   • When a company implements strategies that attepmt to shape the external invornment within which it operates
     • No single business is large/powerful enough to create a major change in the external environment.
       • Marketing managers are adapters, rather than agents of change

3. OBJECTIVES

   • Intelligently plan for the future, identify future market opportunities and threats.

4. FACTORS OF ENVIRONMENTAL MANAGEMENT

   • Social Factors
     • Most difficult external variable. Involves attitudes, values, lifestyles, influence the products people buy and prices paid, how, where and when to expect the product.
     • American Values
       • Growth of component lifestyles
         • How social media change communication
           • Connectivity is created by how everything is arranged.
             • Firms use social media by online voting, asking for likes, online ads, etc.
         • Component lifestyle is the practice of choosing goods and services that meet needs and interests rather than conforming to traditional lifestyles.
           • They increase complexity of consumer's buying habits.
       • A value is a strongly held and enduring belief, it can influence our buying habits.
         • Self Sufficiency-- Every person should take care of themselves. Upward Mobility-- Success will come to educated, hard workers who obey rules. Work Ethic-- Hardwork and dedication are moral and right. Conformity-- no one should expect to be treated differently.
         • Some American Values were:
   • Demographic Factors
     • Demography is the study of people's vital statistics, such as age, race, ethnicity and location.
       • It is related to consumer buyer behavior.
         • Age groups represent opportunities to focus on a section of population and offer oportunities.
           • Some examples are: tweens (8-12), teens, generation Y (born between 1979-1994), generation X (born between 1965-1978), and baby boomers (born between 1946-1964)
   • Economic Factors
     • The economic areas of greatest concern are:
     • Consumer's Incomes
       • Purchasing Power
         • Inflation
           • Recession
             • Is a period of economic activity characterized by negative growth.
               • Gross domestic product falls for 2 consecutive quarters.
           • Is the measure of the decrease in the value of money, generally expressed as the percentage reduction in value since the previous year.
         • Is a comparison of income vs. the relative cost of standard goods/services in different geographic areas.
           • Income minus cost of living.
             • + income = + spending
       • A marketer who knows where the money is knows where the markets are. Education is the1st primary determinant of earning potential.
   • Technological Factors
     • Research
       • Stimulating Innovation
         • Companies are using the following to keep innovation strong:
           • Build scenarios, enlist the web, talk to early adopters, use marketing research, create an innovative environment, cater to enterpreneurs.
       • Basic/Pure: aims to confirm an existing theory or learn more about a concept or phenomenon.
       • Applied: Attemps to develop new or improved products.
   • Political & Legal Factors
     • Government regulation is needed to protect interests of society, protect businesses and consumers.
       • Federal Legislation
         • Regulatory Agencies
           • Consumer Product Safety Commission (CPSC): protect the health and safety of consumers in and around their homes.
           • Food & Drug Admin. (FDA): enforces regulations against selling and distributing adulterated, misbranded, or hazardous food and drug products.
           • Federal Trade Comission (FTC): prevent persons or corporations from using unfair methods of competition in commerce such as fraud.
         • Several categories of regulatory activity such as: competitive anvironment, pricing, advertising, promotion, and consumer privacy.
   • Competitive Factors
     • Competition for market share & profits
       • Global competition
         • Competition can not only be against other national firms, but also against the firms in other countries.
       • Firms find that they must work harder to maintain their profits and market share
     • Encompass number of competitors, the size of competitors, and degree of interdependence within the industry.
   • Growing Ethnic Markets
     • Market to Hipanic Americans: They are mostly Mexicans and they will choose brands that reflect native values and culture.
       • Market to African Americans: which are 6 years younger on average than the rest of consumers and spent more time on the radio.
         • Market to Asian Americans: highest average family income.

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