Download 06-Sp16--Environment

THE MARKETING
ENVIRONMENT
BUAD 307
THE MARKETING ENVIRONMENT
Lars Perner
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THE MARKETING ENVIRONMENT
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Culture
Demographics
Social
Technology
Economic
Political and Legal
Factors
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Definitions
Culture: “That complex whole which
includes knowledge, belief, art,
morals, custom, and any other
capabilities and habits acquired by
man as a member of society.”
Alternative definition: “Meanings
that are shared by most people in a
group [at least to some extent]”.
(Adapted from Peter and Olson, 1994)
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THE MARKETING ENVIRONMENT
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Culture impacts
• Behavior—customs of how and
when products are used
• Expectations
• Interpretation of reality
• Relationships between people
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Cultural Lessons
• Diet Coke is named Light
Coke in Japan—dieting
was not well regarded
• Red circle trademark was
unpopular in Asia due to
its resemblance of
Japanese flag
• Packaging of products is
more important in some
countries than in U.S.
• Advertisement featuring
man and dog failed in
Africa—dogs were not
seem as man’s best friend
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THE MARKETING ENVIRONMENT
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More Cultural Lessons...
• Cologne ad featuring a
man “attacked” by
women failed in Africa
• Food demonstration did
well in Chinese stores
but not in Korean ones-older women were
insulted by being
“taught” by younger
representatives
• Pauses in negotiations
• Level of formality
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THE MARKETING ENVIRONMENT
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DEMOGRAPHICS
• Distribution of people across
statistical categories
– Occupation
– Income
– Ethnicity  Language usage
– Age  Birth rates
– Residence (e.g., urban/rural)
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Japan: Actual and Projected
Population Figures
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China: Actual and Projected
Population Figures
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SOCIAL FACTORS
• Values—tensions
– Value of privacy and
security vs.
convenience
– “Green” products vs.
• Cost
• Convenience
• Performance
• “Component lifestyles”
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THE MARKETING ENVIRONMENT
Lars Perner
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Case: Hostess (Twinkies)
• In 2011, Hostess, the manufacturer of
Twinkies, was unable to negotiate a cost
effective deal with its main union
• This happened on top of a “triple
whammy” that had hit packaged goods
manufacturers:
– Costs of ingredients had gone up due to
increased costs of petroleum (needed for
fertilizer, transportation, and processing)
– A consolidation in the supermarket industry and
the entry of Walmart’s supercenters had put
downward pressure on wholesale prices
– The recession had caused a number of
customers who in the past bought national
brand items to switch to store brands and lower
tier brands.
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In 2013, Hostess entered bankruptcy. The
firm was sold off.
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Ford Motor Co.
• Historically, U.S. high schools have provided driver education.
In many other countries, this has not been offered, so getting
a driver’s license is more expensive and difficult.
• With services such as Uber as a flexible and cost effective
alternative, many younger people have less interest in driving
their own cars
– Fewer young people get driver’s licenses
– As driver education learning has started to fade, passing the on-theroad-test later may be more difficult
• Many young people today spend a significant amount of
money on cell phones and service plains, significantly
“draining” on the resources available to buy cars
• To appeal to younger customers (and others), Ford has tried
to add an increasing amount of technology to their cars, but
so have competitors
• Increased fuel prices and uncertainty on future prices reduce
the attractiveness of owning a car
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THE MARKETING ENVIRONMENT
Lars Perner
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