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THE MARKETING ENVIRONMENT

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THE MARKETING ENVIRONMENT

• Culture

• Demographics

• Social

• Technology

• Economic

• Political and Legal Factors

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DEMOGRAPHICS

• Distribution of people across statistical categories– Occupation– Income– Ethnicity Language usage– Age Birth rates– Residence (e.g., urban/rural)

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Japan: Actual and Projected Population Figures

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China: Actual and Projected Population Figures

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SOCIAL FACTORS

• Values—tensions– Value of privacy and

security vs. convenience

– “Green” products vs.• Cost• Convenience• Performance

• “Component lifestyles”

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Case: Hostess (Twinkies)

• In 2011, Hostess, the manufacturer of Twinkies, was unable to negotiate a cost effective deal with its main union

• This happened on top of a “triple whammy” that had hit packaged goods manufacturers:

– Costs of ingredients had gone up due to increased costs of petroleum (needed for fertilizer, transportation, and processing)

– A consolidation in the supermarket industry and the entry of Walmart’s supercenters had put downward pressure on wholesale prices

– The recession had caused a number of customers who in the past bought national brand items to switch to store brands and lower tier brands.

• In 2013, Hostess entered bankruptcy. The firm was sold off.

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Ford Motor Co.• Historically, U.S. high schools have provided driver

education. In many other countries, this has not been offered, so getting a driver’s license is more expensive and difficult.

• With services such as Uber as a flexible and cost effective alternative, many younger people have less interest in driving their own cars

– Fewer young people get driver’s licenses– As driver education learning has started to fade, passing the on-the-

road-test later may be more difficult

• Many young people today spend a significant amount of money on cell phones and service plains, significantly “draining” on the resources available to buy cars

• To appeal to younger customers (and others), Ford has tried to add an increasing amount of technology to their cars, but so have competitors

• Increased fuel prices and uncertainty on future prices reduce the attractiveness of owning a car