.

C-4, SS19

THE MARKETING ENVIRONMENT

I. Macroenvironment – External and Uncontrollable

Social/Cultural Environment – Social values, perceptions, preferences and behaviors

Demographic Environment – Size, density, location, age, gender, race, occupation and other data about human populations

Economic Environment – Buying power and spending patterns

Technological Environment – Technologically created products and opportunities

Political/Legal Environment – Laws, governments and societal limitations

Natural Environment – Natural resource required inputs and affects

II. Demographic Environment

A. Demography – The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistical data

U.S. Population

1. 305,000,000 in 2009; may reach 350,000,000 by 2025

2. Less than 5% of World’s population

3. Consumes 45% of World’s annual production of raw materials

4. Ten most populous states have over one-half of the population

5. Increasing slowly; less than 1% per year

Population Change – Births, deaths and two forms of migration

1. Births – rate high until 1930

a. Matures – 1930 - 1945 (33,000,000)

b. Baby Boomers – 1946 - 1964 (77,000,000)

c. Generation X – 1965 – 1978 the birth dearth (40,000,000)

d. Generation Y – 1979 – 1994 echo boomers (60,000,000)

e. Tweens – 8 – 14 (29,000,000)

2. Deaths – rate very predictable, Demography began in 1870s

a. 8.1 in 2009

b. On the decline

3. Migration – Immigration “in”; Emigration “out”

a. Legal 2009 immigration of 743,715

b. Biggest influx from 1900-1910; 8,000,000

4. Life-Cycle Analysis – The study of age related demand changes

Review #2

Population Units

1. Family

a. Later an fewer marriages

1) 1776 – Male 15.0, Female 13.0

2) 2009 – Male 26.8, Female 25.1

b. Fewer one-worker, traditional families

1) Over 60% of married females work

Over 65% of females raising children work

63% of females 16-65 work

1,700,000 stay-at-home dads

c. High divorce rate

1) Over 50% of all first marriages end in divorce

2) 70% of California marriages end in divorce

2. Non-Family Household (32%)

a. Single-adult units (25%) rare prior to WWII

b. Mingles – two person cohabiters (3,000,000 units)

3. Ethnic Groups

a. Hispanics (14.4%)

African Americans (13.4%)

Asian Americans (4.9%)

4. Geographic Mobility

a. 16% of U.S. residents move from one county to another annually

b. Three significant directions

1) Rural to urban (97% rural in 1776, 4% rural in 2006)

2) Urban to suburban

3) North East and Midwest to Sunbelt

Review #3

Intermission

III. Economic Environment

Income

1. GDP

2. National Income

3. Personal Income

4. Disposable Income

5. Discretionary Income

6. Real Income

7. Inflation

Wealth

1. Liquid

2. Non-liquid

Credit

1. Installment, non-installment

2. Short-term, long-term

Engel’s Law – how spending power is proportionally used

1. Basic Law (1875) – food and basic necessities ↓

2. Additions

a. Housing and Household Operations ≈

b. All other ↑

Review #4

IV. Political/Legal Environment

Public Welfare above Business Welfare

1. Originally laissez faire

2. Big business stifled the market mechanism

3. Japan Inc.

Competition is Encouraged – therefore, legal structure must stop monopoly, collusion and unfair practices

Competition-Oriented Legislation (Review Exhibit 4-1, page 54)

1. The Sherman Antitrust Act (1890)

2. The Clayton Act (1914)

3. The FTC Act (1914)

4. The Robinson-Patman Act (1936)

5. Lanham Act (1946)

6. The Antimerger Act (1950)

7. The Magnuson-Moss Act (1975)

Consumer-Oriented Legislation (Review Exhibit 4-2, page 55)

1. The Wheeler-Lea Act (1938)

2. The Truth-In-Packaging Act (1965-1966)

3. Consumer Credit Protection Act (1968)

4. National Environmental Policy Act - The Clean Air Act (1969-1970)

5. The Consumer Product Safety Act (1972)

6. Nature of Federal Action

a. Cigarette Labeling Act (1967)

b. Public Health Smoking Act (1970)

7. California

a. Public Utilities Commission (PUC)

b. Coastal Commission

Review #5

Review #2

The four causes of population change are?

1. Births

2. Deaths

3. Immigration

4. Emigration

Review #3

What percentage of California marriages ends in divorce?

1. 40%

2. 50%

3. 60%

4. 70%

Intermission

Review #4

According to Engel’s Law, as consumers’ income increases the proportion spent will?

1. Decrease on food and basic necessities

2. Remain roughly constant on housing and household operations

3. Increase for all other categories

4. All of the above

Review #5

The Competition-Oriented Sherman Antitrust Act (1890) was directed at what one firm?

1. Standard Oil

2. Microsoft

3. IBM

4. Google

Ending