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What is "marketing environment"?
Marketing environment is the list of forces outside of marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.
- - Although managers can control the marketing mix, they cannot control elements in the external environment that continually mold and reshape the target market.
- - the factors within the external environment that are important to marketing managers can be classified as social, demographic, economic, technological, political, and legal.
What is "environment scanning"?
Many organizations assemble a team of specialists to continually collect and evaluate environmental information.
- The goal in gathering the environmental data is to identify future market opportunities and threats.
- A value is a strongly held and enduring belief. The following four basic values strongly influence attitudes and lifestyles:
- - Self-sufficiency: Every person should stand on his or her own two feet.
- - Upward mobility: Success would come to anyone who got an education, worked hard, and played by the rules.
- - Work ethic: Hard work, dedication to family, and frugality were moral and right.
- - Conformity: No one should expect to be treated differently from everyone else.
A person's value are typically formed through interaction with family, friends, and other influencers such as teachers, religious leaders, and politicians.
Values also influence our buying habits. Today's consumers are demanding, inquisitive, and discriminating.
Changing Role of Women
- - Marriage is a declining institution in America.
- - Growth of dual-income families has resulted in increased purchasing power.
- - As women spend more time in the workplace, they are replying on the Internet to save time gathering information and shopping.
- Baby Boomers (1946-64): well-off, big consumers, and trying to stay young. Largest demographic segment of today's U.S. population.
- Generation X (1965-78): cynical consumers; and pressed for time.
- Generation Y (1979-1994): impatient opinionated; diverse; good time managers; street smart; and connected.
- Tweens: finicky consumers with fleeting tastes.
Growing Ethnic Markets
- Hispanics: Prefer products from their native country. The number of TV, radio, and cable channels aimed at Hispanic Americans continue to expand.
- African Americans: Firms are creating new and different products for the African American market. They are also designing products and services for the African American market, they are also targeting promotional activities to reach this group of consumers.
- Asian Americans: Highest average family income of all groups. They are more comfortable with technology than the general population. Marketers must recognize the cultural and linguistic differences between difference nationality.
Ethnic and Cultural Diversity: Muticulturalism occurs when all major ethnic groups in an area - such as a city, county, or census tract - are roughly equally represented.
What are the 5 external marketing environments?
- Social Factors
- Demographic Factors (Ethnic Markets)
- Economic Factors
- Political and Legal Factors
- Technological Factors
Income and Rising Debts
- - As disposable incomes rise, more families and individuals can afford the "good life".
- - Debt eventually forces consumers to use their income to make interest payments instead of buying more goods and services.
Purchasing Power and Discretionary Income
- - Purchasing Power is a comparison of income versus the relative cost of a set standard of goods and services in different geographic area.
- - When income is high relative to the cost of living, people have more discretionary income. That means they have more money to spend on nonessential items ( in other words, on wants rather than needs).
- Inflation is a measure of the decrease in the value of money, generally expressed as the percentage reduction in value since the previous year, which is the rate of inflation.
- Inflation pressures consumers to make more economical purchases and still maintain their standard of living.
Recession is a period of economic activity characterized by negative growth, which reduces demand for goods and services.
- - A recession is defined as when the gross domestic product falls for two consecutive quarters.
- - The declining of stock market, growing unemployment, and collapsing home prices have taken a toll on consumer confidence.
- The Explosion of Internet and Related Technologies.
- - RSS and Blogging
Political and Legal Factors
- Federal Legislation: regulates markets and protects consumers
- State Laws: vary from state to state
- Regulatory Agencies: FDA and FTC