Chapter 5 - Analyzing the Marketing Environment

Objectives:

• Outline how customers, the company, competitors, and corporate partners affect marketing strategy,
• Explain why marketers must must consider the macroenvironment when they make decisions,
• Describe the differences among the various generationals cohorts,
• Identify various social trends that affect marketing.

"Because the consumer is the center of all marketing efforts, value-based marketing aims to provide greater value to consumers than competitors offer."

A Marketing Environment Analysis Framework:

 By paying close attention to customer needs and continuously monitoring the business environment in which the business operates, a good marketer can identify potential opportunities. 

The Immediate Environment:

• Company Capabilities: Successful marketing firms focus on satisfying customer needs that match their core competencies.
• Competitors: It is critical that marketers understand their firm's competitors, including their strengths, weaknesses, and likely reactions to the marketing activities that their own firm undertakes.
• Corporate Partners: Parties that work with the focal firm are its corporate partners.

MacroEnvironmental Factors:

Macro Environmental factors: Aspects of the external environment that affect a company's business, such as Culture, Demographics, Social Issues, Technological Advances, Economic Situation, and Political/Regulatory Environment. (CDSTEP)

Culture:

• Country Culture: Entails easy to spot visable nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and more subtle aspects, which are trickier to identify.
• Regional Culture: The influence of the area within a country in which people live.

Demographics: Information about the characteristics of human populations and segments, especially those used to identify consumer markets such as by age, gender, income, and education.

• Generational Cohorts: a group of people from the same generation -  typically have similar purchasing behaviors because they have shared experiences and are in the same stage of life. 
• Generation Z/Digital Natives: People of this world were born into a world that was already full of electronic gadgets and digital technologies, such as the internet and social networks. 
• Generation Y/Millennials: Generational cohort of people born between 1977 and 1995, biggest cohort since the original postwar baby boom. "Generation Y  puts a strong emphasis on balancing work and life - these young adults want a good job, but also want to live in a location that supports their lifestyle."
• Generation X: Generational cohort of people born between 1965 and 1976.
• Baby Boomers: Generational cohort of people born after World War II, between 1946 and 1964. IncomeEducationGenderEthnicity
• Income
• Education
• Gender
• Ethnicity
• Thrift

"Retailers recognize the immense buying power of the aging baby boomers, so they cater directly to them with larger fonts in signage, staff available to read the small print on packaging, and seating options in stores."

"Those who did not graduate from high school have an average annual salary of about $23,000; High school grads earn around $32,500; those with a bachelors degree earn nearly $54,000."

"The United Nations estimates that approximately 1 million people per year will immigrate from less developed nations to the United States over the next 40 years."

"Marketers cannot assume they can use a single strategy to appeal to all minority groups."

Social Trends:

• Health and Wellness Concerns
• Greener consumers
• A Time-Poor Society

Technological Advances:

Economic Situation:

• Inflation: Refers to the persistent increase in the prices of goods and services.
• Foreign Currency Fluctuations: Changes in the value of a country's currency relative to the currency of another country; can influence consumer spending. 
• Interest rates: These represent the cost of borrowing money.

Political/Regulator Environment: Comprises political parties, government organizations, and legislations and laws.