global marketing strategy

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MKT301_N2_Chapter4_PPTSlides.pdf

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The Marketing

Environment

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External Marketing Environment

LO 1

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Target Market

• Group of people or organizations for which an organization designs, implements, and maintains a marketing mix • To meet the need of that group, resulting in

mutually satisfying exchanges

LO 1

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Understanding the External Environment

• Involves: • Understanding current customers

• Understanding how customers make decisions

• Identifying the most valuable customers and understanding their needs

• Understanding the competition

• Important for marketing managers in order to plan for the future

LO 1

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Social Factors

LO 2

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Social Factors

• Social change is the most difficult external variable for marketing managers to forecast, influence, or integrate into marketing plans

• Influence: • Products people buy

• Price paid

• Effectiveness of specific promotions

• How, where, and when people expect to purchase products

LO 2

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Core American Values

Self- sufficiency

Upward mobility

Work ethic

Equality Individualism Achievement orientation

LO 2

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Social Media

• Changed the way information is obtained

• Made consumers: • Interact

• Share beliefs, values, ideas, and interests

• Purchase at a dizzying rate

• Used by firms to: • Engage customers in their products and services

• Humanize brands

LO 2

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Crowdtap Research Results

• Of the people who were either looking to purchase a vehicle in the next year or had purchased a vehicle in the previous year, 80% were more likely to turn to their social networks than to car salespeople for car- buying advice.

• Sixty-eight percent even said that they had purchased a car they found on social media.

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Demographic Factors

LO 3

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Demographic Factors

• People are the basis for any market • Demographic characteristics are related to

consumer buying behavior

• Population is the basic statistic in marketing

- Useful when broken into smaller and more specific increments

LO 3

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https://www.youtube.com/wa tch?v=Dg99LxpLKkU

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Tweens

• Pre- and early adolescents from ages eight to twelve

• The fastest growing tween markets are mobile games and other advertising- and microtransaction-based smartphone apps.

• Marketing Agency Specializing in Tweens

LO 3

https://www.youtube.com/watch?v=fKs3PIs_aTI

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Teens

• There are approximately 25 million teenagers in the United States, and they spend approximately 72 hours per week tuned in electronically to television, the Internet, music, video games, and cell phones

• Many teens pass technology down to their parents

• Command an immense amount of buying power: $980 Billion/year

• 40% of their money goes to…

LO 3

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Millennials (Generation Y)

• People born between 1979 and 1994

• Surpassed population of baby boomers

• Are currently in two stages • People born in 1994 are just entering young

adulthood (24)

• People born in 1979 have established careers and have started families (39)

• Spend more than $200 billion annually

LO 3

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Generation X

• People born between 1965 and 1978 (age 40 to 53)

• Independent, resilient, and adaptable

• Have an estimated 31 percent of total income dollars

• Saving money is a major priority for Gen Xers

• Providing for their children’s college expenses is a major goal

LO 3

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Generation X (continued)

• Most plan to keep working during their retirement years

• Many support their aging parents

• Place a high value on education and knowledge

• Tend to go online to shop, bank, research products, find the best deals, and read the news

• Personalized ads boost brand favorability and purchase intent

LO 3

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Baby Boomers

• Persons born between 1946 and 1964 (age 72 to 54)

• Outspend younger adults on consumer goods and services

• Tempting target market because of their sheer numbers

• Make purchase decisions based on price and quality

• Influenced by traditional advertising, sales reps, and word-of-mouth recommendations

LO 3

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Generational Differences in

the Workplace

https://www.youtube.com/watch?v=sfootedt1IE

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Applying Generational Differences

Baby boomers in America are aging. Describe how this might affect the marketing mix for the following:

• Bally’s Health Clubs

• McDonald’s

• Whirlpool Corporation

• The state of Florida

• Target Stores

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Growing Ethnic Markets

• Hispanic Americans

• African Americans

• Asian Americans • Chinese

• Filipino

• Japanese

• Korean

LO 4

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Hispanic Americans

• Largest group to use mobile devices for any type of transaction

• Hispanic millennials • Embrace their original culture

• More open-minded about relationships than their parents

• Prone to taking a bilingual, bicultural approach to their media consumption

• Hispanic Marketing Video

LO 4

https://video.search.yahoo.com/yhs/search;_ylt=A0LEVjSFuWxa3yQAtzIPxQt.?p=hispanic+marketing&fr=yhs-pty-pty_converter&fr2=piv-web&hspart=pty&hsimp=yhs-pty_converter&type=co_appfocus1_cr#id=1&vid=4c5a15e30580472f2d8ba7b4a00070e6&action=view

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African Americans

• Young population with a strong influence on the latest trends

• Expect brands to support social causes

• Tend to be loyal to both brands and stores

• Ford got it right

• https://youtu.be/kWWhpEUnrXQ

LO 4

https://youtu.be/kWWhpEUnrXQ

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Asian Americans

• Called a marketer’s dream as they are younger, better educated, and have higher incomes than average

• Early adopters of the latest digital gadgets and thrive in America’s technology sector

• Hold on to their cultural values

• Prefer to shop at stores owned and managed by other Asian Americans

LO 4

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Economic Factors

Consumers’ incomes

Purchasing power

Inflation Recession

LO 5

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Consumers’ Incomes

• Median U.S. household income in 2016 was approximately $57,000

• Education is the primary determinant of earning potential

• For example, just 1 percent of workers with only a high school education earn over $100,000 annually. By comparison, 13 percent of college- educated workers earn six figures or more.

• Over a lifetime, an individual with a bachelor’s degree will earn more than twice as much total income as a nondegree holder.

• Stores that cater to lower-income consumers have done well in the recent years

LO 5

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Purchasing Power

• Measured by comparing income to the relative cost of a standard set of goods and services in different geographic areas

• Also known as the cost of living

• Difference between the income and the cost of living (expenses)

• Consumers with high purchasing power have the ability to purchase higher-priced necessities

LO 5

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Inflation

• Measure of the decrease in the value of money • Expressed as the percentage reduction in value

since the previous year

• Businesses can increase their profit margins only by increasing their efficiency during low inflation

LO 5

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Recession

• Period of economic activity characterized by negative growth • Reduces demand for goods and services

• Also defined as occurring when the gross domestic product falls for two consecutive quarters • Gross domestic product - Total market value of

all final goods and services produced during a period of time

LO 5

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Technology and Innovation

LO 6

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Technology and Innovation

• Technological success is based upon innovation

• Corporate structure and management actions are required to bring new technology

• Workers should be encouraged to innovate

LO 6

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Stimulating Innovation

• Companies limit innovation to areas they are already familiar with

• Different approaches to innovation include: • Building scenarios

• Enlisting the Web – Idea Share

• Talking to early adopters

• Using marketing research

• Creating an innovative environment

• Catering to entrepreneurs by carving blocks of time

LO 6

https://www.youtube.com/watch?v=qD60cBQOABY

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Stimulating Innovation (continued)

• Developing new technology internally is a key to create and maintain a long-term competitive advantage

• External technology is important to managers for the following reasons: • Firms can operate more efficiently or create a

better product by acquiring the technology

• New technology may render existing products obsolete

LO 6

Marriott Google

Airbnb

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Innovation video - 5 minutes

https://www.youtube.com/watch?v=OwGuuPToRPc

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Political and Legal Factors

LO 7

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Political and Legal Factors

• Business needs government regulation to protect innovators of new technology, the interests of society, and consumers

• Government needs business in order to generate taxes

LO 7

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Regulatory Agencies

• Protects the health and safety of consumers in and around their homes

Consumer Product Safety Commission

(CPSC)

• Enforces regulations against selling and distributing adulterated, misbranded, or hazardous food and drug products

Food and Drug Administration

(FDA)

• Prevents persons or corporations from using unfair methods of competition in commerce

Federal Trade Commission (FTC)

LO 7

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Consumer Privacy

• CAN-SPAM Act • Regulates unsolicited e-mail advertising

• Prohibits commercial e-mailers from using false addresses and presenting false or misleading information

• Children’s Online Privacy Protection Act • Requires websites operators to post a privacy

policy on their home page and a link to the policy on every page where personal information is collected

LO 7