Chapter 3: Analyzing the Marketing Environment Flashcards
What is meant by gross margin?
Gross margin is the difference between revenue and costs of goods sold, divided by revenue
Why should marketers study the marketing environment?
By studying the marketing environment, it allows marketers to take advantage of opportunities and to combat threats. Most importantly, to avoid “Marketing Myopia”
Explain the difference between microenvironment and macroenvironment.
Microenvironment composes of actors close to the company that affects its ability to serve its customers, but macroenvironment composes of the larger societal forces that affects the microenvironment
What composes microenvironment? and elaborate on them.
Microenvironment composes of the company (every department in the company must work together and “think consumer”), the suppliers (plays a role in delivering quality resources needed to produce goods and services; companies should treat suppliers like partners), marketing intermediaries (help promote, sell, and distribute its goods e.g. resellers, physical distribution firms, marketing services agencies, and financial intermediaries), competitors (those who are viewed by consumers as being reasonable substitutes; must gain strategic advantage), publics (people who can affect a company’s objectives), and the customers themselves.
Describe the five key generations in the demographic sub-environment.
The five key generations are
1) Baby boomers; are wealthiest generation in history as they control 3/4 of the financial assets and spends the most of roughly around 50%; they tend to think young; represent strong targets for financial services
2) Generation X; grew up in a time of economic crises, affecting them in that they are more wary of what products they purchase, spend more time researching before buying; is the most educated generation to date; is skeptical of marketing; prefers quality to quantity
3) Millennials; fluent with computer and digital technology; opts for personalization and customization; prefers hip and popular brands
4) Generation Z; digital in DNA; do product research before buying; 39% find shopping inspiration from social media; companies should let them help to define their brand experience
5) Generation Alpha; small market but holds a great promise; will soon be the most educated, wealthiest, the most technology-supplied generation ever; strong influence on parent’s buying decision (Generation Alpha -> Generation Y -> Baby Boomers); prefers digital media
Should companies creat separate products for each gen groups?
No, but they could use the demographic sub-environment as a guide on what products to make, in that different groups have different characteristics, and by tuning your product to fit each characteristics can be confusing and may alienate the customers. In addition, each generation groups is divided further into more sub-groups that possesses different characteristics. Companies should seek other segmentation methods as well.
As Thailand’s demography leans toward having more and more elderly people, and less and less babies, what would be the effects on marketing?
Several products targeting the infant segments would soon see a drop in sales, for example, diapers, baby food and toys. On the contrary, other products targeting the elderly segment would see a rise in sales, for example, elderly homes, adult diapers, and nursing services.
What is the current trend in American households?
American households (and with probable cause other country’s household’s) are becoming less traditional i.e. more people are married without children, single parents, non-family households. In response to this, they care increasingly being considered by marketers.
What is the trend in education? and what would the implied impacts be?
People are receiving more and more education, and it is expected that around 93-95% of people globally have completed high school. This would imply the effects of the demand for quality products.
Describe the diversity part in the demographic environment and its current trends.
Society is seeing more diversity. Marketers are now targeting them specially with designed ads, products, and promotions.
Elaborate on how the economic environment impacts consumer behavior.
The economic environment plays a role in that people need money to buy products; if the current economic situation is bad, people would be more wary of how they spend their money, and in addition to that, people would look for greater value in their products.
What is the current trend in income distribution? and what is its effect?
The upper class is getting wealthier, the middle class is shrinking, and the underclass remains poor. Income distribution has created a tiered market.
Describe the natural environment and some of the key trends.
The natural environment involves the natural resources that are needed as inputs for a company’s product. Events ranging from weather to natural disasters can affect companies; for that, companies should prepare contingency plans. Key trends include shortage of raw materials, increasing pollution, and increasing government intervention.
Discuss technological environment.
The technological environment is changing rapidly, and because of that new markets and opportunities are being created; however, old, obsolete technology are being replaced as well.
Elaborate on the political environment.
The political environment includes laws, government agencies, and pressure groups. They play a role in influencing or limiting various organizations. They may, for example, face increasing legislation, different government policies, increased emphasis on ethics and socially responsible behavior.
