Marketing Environment

Marketing Environment

1. UNDERSTANDING THE EXTERNAL ENVIRONMENT:

   • Understanding current customers (how, when, what and where they buy)
   • Understanding what drives consumer decisions (know what customers buy)
   • Identify the most valuable customers and understand their needs (what drives loyalty and how to keep it)
   • Understand the competition

2. ENVIRONMENTAL MANAGEMENT

   • When a company implements strategies that attempt to shape the external environment within which it operates

3. 7 FACTORS THAT AFFECT THE EXTERNAL ENVIRONMENT

   • SOCIAL FACTORS
     • AMERICAN VALUES: Self-Sufficiency, Upward Mobility, Work Ethic, Conformity
     • PERSONALITY TRAITS VARY BY REGION: Geography and personality appear to be linked
     • THE GROWTH OF COMPONENT LIFESTYLES: choosing products and services that meet diverse needs and interests
     • THE CHANGING ROLE OF FAMILIES AND WORKING WOMEN: dual-income families result in increased purchasing power, As women’s earnings grow, so do their levels of expertise, experience, and author- ity as well as expectations.
     • THERE IS NEVER ENOUGH TIME: less time to spare modifies schedules and affect purchasing patterns
   • DEMOGRAPHIC FACTORS
     • POPULATION: people are directly or indirectly the basis of all markets
       • TWEENS: Heavy buying influence on parents, biggest growth area is cell phone usage. Spend $21 Billion
       • TEENS: Two-thirds go to a mall once/week. 90 percent engage in on-demand media/ entertainment. Spend $195 Billion
       • GEN Y: Family-oriented, time managers Most ethnically diverse generation. Spend $200 Billion
       • GEN X: 65 percent report no retail brand loyalty. Want reliability and authenticity.
       • BABY BOOMERS: Fewer than 20 percent expect to stop working. Heavily rely on word-of-mouth promotion Account for 60 percent spent on consumer goods
   • ETHNIC FACTORS
     • HISPANIC AMERICANS: loyal to the brands found in their homeland
     • AFRICAN AMERICANS: first to realize unique product opportunities
     • ASIAN AMERICANS: are younger, better educated, and have higher incomes than average, they are sometimes called a “marketer’s dream.”, more comfortable with technology than the general population.
     • ETHNIC AND CULTURAL DIVERSITY: growth of multicultural representation
   • ECONOMIC FACTORS
     • CONSUMERS' INCOMES: As disposable (or after-tax) incomes rise, more families and individuals can afford the “good life.”
     • PURCHASING POWER: comparing income to a set of standard g+s, "cost of living"
     • INFLATION: decrease in the value of money can change purchases
     • RECESSION: A period of economic activity characterized by negative growth, which reduces demand for goods and services.
   • TECHNOLOGICAL FACTORS
     • RESEARCH: creating and maintaining a long-term competitive advantage, operate more efficiently or create a better product, avoid obsolete products
     • GLOBAL INNOVATION: innovation is becoming a global process conducted at worldwide research and development operations
     • INNOVATION CARRIES TO THE BOTTOM LINE: innovation is seen to be related to the profit margin growths and higher stock market returns in firms
   • POLITICAL/LEGAL FACTORS
     • FEDERAL LEGISLATION: regulate competitive environment, pricing practices, false advertising and protect consumers
     • STATE LAWS: legislation that affects marketing varies state by state
     • REGULATORY AGENCIES: protect health and safety of consumers, prevent unfair methods of competition in commerce
     • BATTLE OVER CONSUMER PRIVACY: with the growth of the internet, regulation of spam and consumer data
   • COMPETITIVE FACTORS
     • COMPETITION FOR MARKET SHARE AND PROFITS: firms find that they must work harder to maintain their profits and market share regardless of the form of the competitive market
     • GLOBAL COMPETITION: with the phenomenon of globalization, firms must compete against home and foreign companies