The microenvironment consists of the actors close to the company that affect its ability to serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and the public. We first look at the biggest demographic trend—the changing age structure of the population.
The Changing American Family
For example, marketers often divide small producers into three smaller groups—advanced boomers, base boomers, and late boomers—each with its own beliefs and behaviors. More importantly, defining people by date of birth may be less effective than segmenting them by lifestyle, life stage, or the common values they look for in the products they buy.
Geographic Shifts in Population
An increasing number of people are working from home using electronic conveniences such as computers, smartphones and broadband internet access. One recent study estimates that more than half of American businesses now support some kind of telecommuting program, and 5.9 million Americans work from home alone.26. For example, WebEx, the web conferencing division of Cisco, helps overcome the isolation that often comes with telecommuting.
With WebEx, people can meet and collaborate online via computer or smartphone, regardless of their workplace. All you need to conduct effective online meetings is a browser and a phone," says the company. With WebEx, people working anywhere can collaborate with other individuals or small groups to make presentations, exchange documents, and share desktops, complete with audio and video on the go.27.
A Better-Educated, More White-Collar, More Professional Population
Increasing Diversity
More than two-thirds have graduated from college, and 21 percent have a master's degree.32 As a result of television shows such as Modern Family, Ugly Betty and The Ellen DeGeneres Show, and Oscar-winning films such as Brokeback Mountain and Milk, the LGBT community is increasingly degree became public. More than 100 mainstream marketers have advertised on LOGO, including Ameriprise Financial, Anheuser-Busch, Continental Airlines, Dell, Levi Strauss, eBay, J&J, Orbitz, Sears, Sony and Subaru. The airline's focus on gay consumers has generated double-digit revenue growth from the LGBT community every year for more than a decade.33.
For example, one survey found that more than two-thirds of adults with disabilities had traveled for business or pleasure at least once in the past two years. Thirty-one percent had booked at least one flight, more than half had stayed in hotels and 20 percent had rented a car. Marketers such as McDonald's, Verizon Wireless, Nike, Samsung and Honda have included people with disabilities in their regular advertising.
Changes in Consumer Spending
As the population in the United States becomes increasingly diverse, successful marketers will continue to diversify their marketing programs to take advantage of opportunities in fast-growing segments. But recent dramatic changes in the Indian economy have resulted in a growing middle class and rapidly rising incomes. But they will have to find a way to compete with India's Tata Motors, which markets the world's cheapest car, the Tata Nano.
The ultra-low-cost car is designed to be India's Model T - the car that puts the developing nation on wheels. As a result, as discussed in Chapter 1, consumers have now adopted a back-to-basics frugality in their lifestyles and spending patterns that is likely to continue for years to come. They buy less and look for greater value in the things they buy.
Income Distribution
In the United States, the Environmental Protection Agency (EPA) was created in 1970 to create and enforce pollution standards and conduct pollution research. Together, for example, all GE Energy wind turbines in the world could produce enough power for 2.4 million US. For example, a solar panel now generates power for three-quarters of the heat used in Frito-Lay's Modesto, Calif., SunChips factory, and the SunChips themselves come in the world's first 100 percent combustible package.
For example, solar energy now provides three-quarters of the heat used at Frito-Lay's SunChips plant in Modesto, California, and SunChips themselves come in the world's first 100 percent compostable packaging. Many companies are already using RFID technology to track products through various points in the distribution channel. In the United States, the Food and Drug Administration (FDA) has established complex regulations for testing new drugs.
Legislation Regulating Business
The Consumer Product Safety Commission (CPSC) sets safety standards for consumer products and penalizes companies that fail to meet them. National Traffic and Safety Act (1958) Provides for the establishment of mandatory safety standards for automobiles and tires. The Consumer Product Safety Act (1972) established the Consumer Product Safety Commission and authorizes it to establish safety standards for consumer products, as well as specific penalties for failure to enforce those standards.
Authorizes the FTC to collect fees from sellers and telemarketers for the implementation and enforcement of a National Do Not Call Registry. Financial Reform Law (2010) Creates the Consumer Financial Protection Bureau, which writes and enforces rules for the marketing of financial products to consumers. Regulation arises to ensure that firms take responsibility for the social costs of their production or products.
Increased Emphasis on Ethics and Socially Responsible Actions
Besides the fact that Mycoskie is eager to help people, “the timing was also perfect for the American consumer,” he says. Maybe it will teach kids to rock. PepsiCo spends millions of dollars on a complete multimedia campaign to promote its cause-related marketing program.45. Critics worry that cause-related marketing is more of a sales strategy than a giving strategy; that “cause-related” marketing is actually “cause-exploitative” marketing.
Thus, companies that use cause-related marketing can find themselves walking a fine line between increased sales and an improved image and face accusations of exploitation. However, if handled well, cause marketing can greatly benefit both the company and the cause. TOMS Shoes is a great example of cause marketing - of "doing good by doing good". Mycoskie hopes that the com-.
The Persistence of Cultural Values
Shifts in Secondary Cultural Values
For example, the weaker economy in recent years and increased nesting have boosted home appliances such as high-end coffee makers and large TVs. A friendly salesperson sums it up this way: “Another love story at Best Buy with a 60-inch TV in the middle.” A Samsung marketer says: “People still have to live their lives. For example, in the summer after the start of the Iraq war, there was a wave of excited Americans visiting the US.
In the green building market alone, consumers spent $100 billion in 2008 on things like certified homes, solar systems and Energy Star appliances.50. Finally, people vary in their beliefs about the origin of the universe and their place in it. We are becoming a nation of spiritually grounded people who are not traditionally religious,” says one expert.54 This changing spiritualism affects consumers in everything from the television programs they watch and the books they read to the products and services they purchase.
Responding to the Marketing Environment (pp 89–91)
Demography (p 70)
List some demographic trends of interest to marketers in the United States and discuss whether these trends represent opportunities or threats for marketers. Discuss current trends in the economic environment that marketers need to be aware of and provide examples of companies' responses to each trend. Discuss trends in the natural environment that marketers need to be aware of and give examples of companies' responses to them.
In a small group, explore demographic and economic trends related to the power of Chindia and its impact on marketers in the United States. Specifically, for every pair of shoes TOMS sells, it donates a pair of shoes to a child in need somewhere in the world. In fact, when Walmart's same-store sales began to lag in the mid-2000s, the world's largest retailer shamelessly tried to become more like Target.
SAME SLOGAN, DIFFERENT EMPHASIS
He wanted to run a business that would make a profit and at the same time help the needy in the world. Did TOMS Shoes first scan the marketing environment in creating its strategy, or did it create its strategy and adapt the strategy to the environment. Pay less.” With its myriad designer product lines, Target has been so successful in its brand positioning that it has slowly chipped away at Walmart's massive market share over the years.
Live better." None of these efforts seemed to accelerate Walmart's revenue growth or slow Target's. As unemployment rose and consumers began to pinch their ears, Walmart's familiar price "rollbacks" resonated with consumers, while Target's image of slightly better things to slightly higher prices didn't.Target's well-cultivated "upscale discount" image turned off shoppers who thought its fashionable products and trendy advertising meant higher prices.
MOUNTING PRESSURE
He charged that Target's board of directors lacked the necessary experience and tried to take control of five of the board seats. One ad showed a couple drinking coffee in what appeared to be an upscale coffee shop, with the caption: "The new coffee spot." The caption confirmed: “Espresso maker, $24.99.” In another segment of the ad headlined "The New Salon Visit," a glamorous woman with wavy red hair appeared to be in a luxury salon.
Walmart was seeing most of its profits in higher-margin merchandise like bedding, traditionally Target's stronghold. That is, the packs ditch the bull's eye, replacing it with large, colorful, upward-pointing arrows on a white background, with the brand's new name, "up & up." While initial results showed an increase in store brand sales for products with the new design, it is unclear how many of those sales came at the expense of name brand products.
SIGNS OF LIFE
