Lamb, Hair, McDaniel

1. Lamb, Hair, McDaniel CHAPTER 4 The Marketing Environment

2. Marketing Environment Economic Social Demographic Marketing Mix Product Price Promotion Place Marketer Target Market Political Cultural Feedback Technological Legal

3. Environment and Marketing Mix Environment Product Price Promotion Place Economic Competitive Technological Demographic Geographic Cultural Political/legal

4. Social Factors Affecting Marketing Values, Attitudes and Lifestyles (VALS) Core American Values: Self-sufficiency, Upward Mobility, Work Ethic, and Conformity. Changing role of women in society-working mothers Marriage as an institution Family as a unit of consumption Consumerism

5. Demographic Factors Affecting Marketing Population, age pyramid and birth rate Classification of American Society by Age Tweens Generation Y Generation X Baby Boomers Ethnicity in America and its influence in marketing

6. Economic Factors Affecting Marketing Disposable and discretionary income Consumer satisfaction index Purchasing power parity Rising consumer debt Inflation Recession Business cycle

7. Technological Factors Affecting Marketing How technology affects marketing Basic and applied research Marketers use Internet and Blogs to understand consumer preferences Technology helps a company stay ahead in competition (continuous innovation)

8. Political/Legal Factors Affecting Marketing Why companies care about Politicians Politicians make laws, lobbyists help business Governments as a customer Political officials can assist in securing business Protect company interests through campaign donations Federal Legislation, State Laws, Regulatory Agencies (Exhibit 4.1 and 4.2) Competitive Issues Consumer protection Business regulation

9. Tweens • Pre- and early adolescents, age 9 to 12 • Population of 20 million • Purchasing power of $21 billion in 2008 • View TV ads as “just advertising” • Buying power $50 billion 9 9

10. Teens • Age 13-19 • Population of 25 million • Purchasing power of $21 billion in 2008 • Social Network-Facebook 50 million • Emerging as the most connected generation in history via emails, Facebook, chat, texting • Buying power about $200 billion (?) 10 10

11. Generation Y • Born between 1979 and 1994 • Population of 73 million • Purchasing power of $200 billion annually • Researchers have found Gen Yers to be: • Impatient • Family-oriented • Inquisitive • Opinionated • Diverse • Time managers • “Street Smart” • Connected 11 11

12. Generation X • Born between 1965 and 1978 • Population of 40 million • Savvy and cynical consumers • More protective and involved with their kids • Value the importance of education • Avid buyers of the latest clothes, technology, and recreational products 12 12

13. Baby Boomers • Born between 1946 and 1964 • Population of 75 million—the largest demographic segment • $2 trillion in spending power a year • Income will continue to grow as they keep working • Retired or close to retirement • Influence of children of Babyboomers 13 13

14. Multiculturalism and Growing Ethnic Markets 14

15. Why Multicultural Marketing? “[With ethnic marketing] you're going to get more share of the heart, more share of the mind, and ultimately, more share of the wallet.” • About one in three U.S. residents is a minority, representing over 100.7 million people. • 7 states more than tripled their Hispanic population between 1990 and 2000: Alabama, Arkansas, Georgia, North Carolina, South Carolina, Tennessee, and Nevada. • Twenty percent of babies born in the United States are Latino. SOURCE: Mike Robinson, CEO LaVerdad Marketing & Media, http://www.laverdadmarketing.com/la_casa.htm; Lisa Biank Fasig, "An Expanding Business for an Expanding Market," Business Courier of Cincinnati, September 7, 2007

16. Consumers’ Incomes Median U.S. household income in 2008 was approximately $49,000. Incomes have risen at a slow pace. Education is the primary determinant of earning potential. 16

17. The FinancialPower of Women Women bring in half or more of the household income Women control 51.3 percent of the private wealth in the U.S. Women control 80 percent of household spending 17

18. RecessionMarketing Strategies Improve existing products and introduce new ones Maintain and expand customer services Emphasize top-of-the-line productsand promote product value 18

19. Political and Legal Factors Laws and Regulations Protect: • New technology • Society • Businesses • Consumers 19

20. Federal Legislation • Sherman Act • Clayton Act • Federal Trade Commission Act • Celler-Kefauver Antimerger Act • Hart-Scott-Rodino Act Regulate competitive environment Robinson-Patman Act Regulate pricing practices Wheeler-Lea Act Controlfalse advertising 20

21. Regulatory Agencies Consumer Product Safety Commission Protects consumer safety in and around their homes Federal Trade Commission Prevents unfair methods of competition in commerce Food & Drug Administration Enforces safety regulations for food and drug products 21

22. Powers of the FTC Cease-and-Desist Order Consent Decree Affirmative Disclosure Corrective Advertising Restitution Counteradvertising 22

23. Consumer Privacy Government Actions • Gramm-Leach-Bliley Act • Health Insurance Portability and Accountability Act (HIPPA) • California’s Notice of Security Breach Law 23

24. Political and Legal Environment of Marketing 24

25. Ch 4 Discussion Questions Explain the influence of macro environment in marketing. Explain how social and demographic factors influence marketing (or, you can be asked to explain the influence of any one of the environments). Discuss the role multiculturism and growing ethnic population in marketing.