1. The Marketing Environment

2. Target Market A defined group of people most likely to buy a firms Production, Sales, M product arket, Societal OrientationNotable: Target markets change over time and are susceptible to environmental changes 3. External Marketing Environment External Environment is not controllableSocial FactorsDemographicsEver-Changing Marketplace Economic ConditionsProduct Place Promotion Price CompetitionTarget Market Political & Legal FactorsEnvironmental ScanningTechnology 4. Social Factors Include our attitudes, values, lifestyle Examples: The poverty of time Changing roleof women Change in Religious Beliefs80 70 60 Belong to a Religion & attend Service No Religious Affiliation50 40 3020 10 Source: British Social Attitudes 2006/70 1964 1970 1983 1992 2005 5. Social Factors: Poverty of Time A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep...Question: How might marketers exploit the poverty of time? 6. Social Factors: Changing Role of Family Women now make up half of the total number of peopleemployed in the UK, although they outnumber men in a growing number of regions, according to a new study. Research for the GMB union found there were almost 12 million women in public and private sector jobs, 49.4% of the 24.2 million of all employees in Britain. Purchasing power from dual-career families is rising Traditional purchasing roles and patterns are changing 7. Demographic FactorsDemographyAgeLocationRace and Ethnicity 8. Demographic Factors Age: Different sizes, different characteristics, different tastes Location: We move more frequently Migration is a global phenomenon Race and Ethnicity The rise of multiculturalism Not dominated by a single ethnic or racial group 9. Economic FactorsEconomic Areas of Concern to MarketersDistribution of Consumer IncomeRecessionInflation 10. Income Distribution: Statistics The rise of the middle class: average take-home incomes continued to grow in 200910; mean income grew by 1.6%, from 511 to 519 per week. (Institute for Fiscal Studies 2011) The main driver of growth in average incomes in 200910 (and over the recession) was strong growth in income from benefits and tax credits, which grew by 6.7% in real terms and more than offset a 1% real-terms fall in earnings across households. (Institute for Fiscal Studies 2011) 11. Income Distribution: Statistics The volume of spending on goods and services byhouseholds in the UK in 2008 was two and a half times that in 1971; Life expectancy stood at 78.1 for males and 82.1 forfemales in 2006, compared with 69 for males and 75 for females in 1971 the number of years a person canexpect to spend in very good or good general health is 63.5 years in 2008-10 for men; 65 years for women 12. Inflation Prices rise with no wage increase PurchasingPower decreases Increase profit margins by increasingefficiency Consumers reaction: Search for lowest prices Rely on coupons and sales 13. RecessionIncome, production and employment fallReduced demand for goods and services 14. Recession Strategies Improve existing products Introduce new products Maintain customer services Emphasize top-of -the line products andpromote product value 15. Political and Legal Factors EU Trade Commission 27 member countries that monitor and set trade policy Define (reappraise) the trade interests of the European community in both defensive and offensive terms Sets pricing policies (ex. energy) Sets quotas (ex. Carbon emissions) Sets fiscal policy (ex. Interest rates) 16. Technological Environment 17. Competitive Factors How many competitors? How big are competitors? 18. External Marketing Environment External Environment is not controllableSocial ChangeDemographicsEver-Changing Marketplace Economic ConditionsProduct Distribution Promotion Price CompetitionTarget Market Political & Legal FactorsEnvironmental ScanningTechnology 19. Target Marketing and the External Environment Example: Generation Y 20. Generation Y Generation Y: Born between the years 1982 and 1998* Youngest: 14Oldest: 30 Consists of a number of subgroups: First Wave: 23-30 Second Wave: 18-22 Third Wave: 15-18 Fourth Wave: 12-14 21. Generation Y Marketing to Generation Y has becomea way of life for businesses In the 1980s only approx. 1/3rd of retailchains made an effort to target children Today, virtually every retailer targetschildren (or parents): http://www.youtube.com/watch?v=ivpRiUa-2jM 22. Generation Y Why do marketers target kids? Cradle to Grave Marketing: A firm may not know what products it will sell 10 to 20 years from now But it does know its name will be on them 23. Challenge for Marketers: Unlike consumers of previous generations, they do notrespond to brands and traditional. mkt. messages They do not like being told to buy something: 24. Marketings Quest for Cool One message that the do respond to: Cool Marketers look for the trend setters that define cool 25. Task Identify What is Cool Now?1. Products/ Services/ Brands Fashion/ Fashion Labels/ Trends2.Who is the target market?3.What External Environmental factors are influencing this target market AND this cool trend?4.Does marketing really kill cool? 26. Next Week Chapter Six: Consumer Behaviour Please Read Chapter Eight: Segmenting andTargeting