The Marketing Environment

Introduction

• The importance of understanding the Marketing Environment

• Micro-environments vs. Macro-environments• Scan environments for

– Fads– Trends– Megatrends

Actors in the Microenvironment

Forces in the Macroenvironment

Demographics

• The study of human populations in terms of

• Population Size• Population Density• Population Location• Income• Age• Gender• Race, Ethnicity & Religion• Occupation• Education• Other Classifications

Demographic Trends• Aging of U.S. Population• Prevalence of Baby Boomers• Changing Family Structures

– The collapse of traditional marriage– Single-parent households– Smaller “traditional” families– Extended families getting bigger– Friends and colleagues are the new family– Civil unions and co-habiting– LGBT community– Changing gender roles

The Baby Boomer Segment

– 78 million born between 1946 and 1964.

– 28% of population.– Earn more than 50% of all

personal income.– 25% belong to racial or ethnic

minority.– Spend a lot on anti-aging

products and services.– Are likely to postpone

retirement.– “Mature Hedonists”

Demographic Trends, cont.• Geographic Shifts

– Migration to Sunbelt States– Urban Exodus and Re-entry– Micropolitan area migrations

• Work-Life– The rise of tele-commuting– Delayed Retirements– Work-life balance trends– “Cocooning”

• Better educated population• Blue- to white-collar shift• Increasing Ethnic Diversity

– Asians– Hispanics– African Americans

Capitalizing on Demographic Shifts

Economic Forces

$ Purchasing Power$ Employment$ Income Distribution$ Savings Rate$ Debt$ Credit Availability

Natural Forces

• Shortages of raw materials• Catastrophes (i.e. Katrina)• Pollution concerns• Global warming and carbon footprint• “Greening of America”• Push for environmental sustainability• Eco-friendly products and attitudes

Technological Forces

• Obsolescence – A double-edged sword– Advantages

• New Market Opportunities• Increased Productivity• Cost Savings

– Disadvantages• Cannibalization of current offerings• Consumer frustration and alienation• Undue pressure to advance leads to feature creep and

sub-optimal product changes

Political-Legal Forces

• Federal, State and Local Laws• Lobbyist and Watchdog Groups• Changes in Leadership

Political-Legal Forces, cont.

• Labeling: Success or Failure?

Political-Legal Forces, cont.

• Unit Pricing: Success or Failure?

Cultural Forces

• Defining Culture: Sources and Perpetuation• The institutions and other forces that affect The institutions and other forces that affect

a society’s basic values, perceptions, a society’s basic values, perceptions, preferences, and behavior.preferences, and behavior.

• Culture is never stagnant• Core Beliefs vs. Secondary Beliefs• Strongest determinant of wants and needs

Question du Jour

Can Marketers ever ignore Culture when developing new products?