Saturday, 6 August 2011

IDENTIFYING THE MAJOR FORCES

Marketer continuously monitor six major forces: demographic, economic, socialcultural, natural, technological, and political-legal.

1. Demographic Environment
Marketers must be aware of worldwide population growth; changing mixes of age, ethnic composition, and educational levels; the rise of non-traditional families; large geographic shifts in population; and the move to micromarketing and away from mass marketing.

(a) Worldwide Population Growth
The population explosion has been a source of major concern. Unchecked population growth and consumption could eventually result in insufficient food supply, depletion of key minerals, overcrowding, pollution, and an overall deterioration in the quality of life.

(b) Population Age Mix
National populations vary in their age mix. A population can be subdivided into six age groups: preschool, school-age children, teens, young adults age 25 to 40, middle-aged adults age 40 to 65, and older adults age 65 and up. For marketers, the most populous age groups shape the marketing environment. Boomers grew up with TV advertising, so they are an easier market to reach than the 45 million born between 1965 and 1976, dubbed Generation X (and also the shadow generation, twenty-somethings, and baby busters). Generation-Xers are typically cynical about hard-sell marketing pitches that promise more than they can deliver, but some marketers have been able to break through.

(c) Ethnic and Other Markets
Countries also vary in ethnic and racial makeup. Ethnic groups have certain specific wants and buying habits. Several food, clothing, and furniture companies have directed their products and promotions to one or more of these groups.

(d) Educational Groups
The population in any society falls into five educational groups: illiterates, high school dropouts, high school diplomas, college degrees, and professional degrees.

(e) Household Patterns
The "traditional household" consists of a husband, wife, and children (and sometimes grandparents). Yet, in the United States today, one out of eight households is "diverse" or "non-traditional," and includes single live-alones, adult live-together of one or both sexes, single-parent families, childless married couples, and empty-nesters. More people are divorcing or separating, choosing not to marry, marrying later, or marrying without the intention to have children. Each group has a distinctive set of needs and buying habits.

(f) Geographical Shifts in Population
This is a period of great migratory movements between and within countries. Forward-looking companies and entrepreneurs are taking advantage of the growth in immigrant populations and marketing their wares specifically to these new members of the population. Within countries, population movement also occurs as people migrate from rural to urban areas, and then to suburban areas.

2. Economic Environment
Marketers need to focus on income distribution and levels of savings, debt, and credit availability. In a global economy, marketers need to pay attention to the shifting income distribution in countries around the world, particularly countries where affluence levels are rising. U.S. consumers have a high debt-to-income ratio, which slows down further expenditures on housing and large-ticket items. Credit is very available in the United States but at fairly high interest rates, especially to lower-income borrowers.

3. Social-Cultural Environment
Society shapes the beliefs, values, and norms that largely define these tastes and preferences. Marketers must understand people's views of themselves, others, organisations, society, nature, and the universe. They must market products that correspond to society's core and secondary values, and address the needs of different subcultures within a society.

4. Natural Environment
Marketers need to be aware of the threats and opportunities associated with four trends in the natural environment: the shortage of raw materials, especially water; the increased cost of energy; increased pollution levels; and the changing role of governments.

5. Technological Environment
In the technological arena, marketers should take account of the accelerating pace of technological change, opportunities for innovation, varying R&D budgets, and the increased governmental regulation brought about by technological change.

6. Political-Legal Environment
Marketing decisions are strongly affected by developments in the political and legal environment. This environment is composed of laws, government agencies, and pressure groups that influence and limit various organisations and individuals. Marketers must work within the many laws regulating business practices and with various special-interest groups.

In sum, many opportunities are found by identifying trends (directions or sequences of events that have some momentum and durability) and megatrends (major social, economic, political, and technological changes that have longlasting influence).

Within the rapidly changing global picture, marketers must monitor six major environmental forces: demographic, economic, social-cultural, natural, technological, and political-legal.
  • In the demographic environment, marketers must be aware of worldwidepopulation growth; changing mixes of age, ethnic composition, and educational levels; the rise of non-traditional families; large geographic shiftsin population; and the move to micromarketing and away from massmarketing.
  • In the economic arena, marketers need to focus on income distribution andlevels of savings, debt, and credit availability.
  • In the social-cultural arena, marketers must understand people's views ofthemselves, others, organisations, society, nature, and the universe. Theymust market products that correspond to society's core and secondary values,and address the needs of different subcultures within a society.
  • In the natural environment, marketers need to be aware of raw materialsshortages, increased energy costs and pollution levels, and the changing role of governments in environmental protection.
  • In the technological arena, marketers should take account of the acceleratingpace of technological change, opportunities for innovation, varying R&D budgets, and the increased governmental regulation brought about bytechnological change.
  • In the political-legal environment, marketers must work within the many laws regulating business practices and with various special-interest groups.

Ref
Kotler, P., & Keller, K. (2006). Marketing Management . 12th ed. Upper Saddle River, NJ: Merrill Prentice Hall.

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