Professional Documents
Culture Documents
Analysing Needs & Trends in the macroenvironment Deciphering & responding to major macroeconomic forces, like demography, economy, natural environment, political system, technology & cultural environment
What is a Need?
Needs: Needs are the basic human requirements- food, air, water, clothing, shelter People also have strong needs for recreation, education & entertainment A Human need is a state of felt deprivation of some basic satisfaction
What is a Trend?
A trend is a direction or sequence of events which have some momentum & durability
Eg, Hush Puppies shoes as mentioned in the book Tipping Point by Malcolm Gladwellhttp://www.gladwell.com/tippingpoint/index .html
Tipping Point
Tipping points are "the levels at which the momentum for change becomes unstoppable." Gladwell defines a tipping point as a sociological term: "the moment of critical mass, the threshold, the boiling point. The book seeks to explain the sociological changes that mark everyday life.
Tipping Point
As Gladwell states, "Ideas and products and messages and behaviors spread like viruses do." The examples of such changes in his book include the rise in popularity and sales of Hush Puppies shoes in the mid-1990s
Hush Puppies
Hush Puppies is an international brand of contemporary, casual footwear for men, women and children, "the classic American brushed-suede shoes with the lightweight ".
Hush Puppies
A division of Wolverine Worldwide, Hush Puppies is headquartered in Rockford, Michigan. Wolverine markets or licenses the Hush Puppies name for footwear in over 120 countries throughout the world.
Hush Puppies
In 1994, when sales of Hush Puppies were down to 30,000 pairs a year, and Wolverine was considering phasing out the brand, Hush Puppies suddenly became "hip" in the clubs and bars of downtown Manhattan, where young people were "buying them up" at small shoe stores. In 1995, fashion designers John Bartlett, Anna Sui, and Joel Fitzgerald began featuring them in their collections. Depending on word of mouth, Wolverine sold 430,000 pairs of the shoes, and four times that the following year.
Macro-environment
The macro-environment A firm's marketing macro-environment consists of a variety of external factors that manifest on a large (or macro) scale. These are typically economic, social, political or technological phenomena. A common method of assessing a firm's macroenvironment is via a PEST (Political, Economic, Social and Technological) analysis.
PEST analysis
Within a PEST analysis, a firm would analyse national political issues, culture and climate, key macroeconomic conditions, health and indicators (such as economic growth, inflation, unemployment, etc.), social trends/attitudes, and the nature of technology's impact on its society and the business processes within the society
Trend Trackers
The marketing department identifies the critical changes in the environment Must be the trend trackers & opportunity seekers The marketing department uses its marketing intelligence & market research to track the environment
Electric Cars
Car
Electric Cars
Woman Pilots
Identify a trend
Identifying a trend, analysing the likely consequences, determining company opportunities are critical skills These trends & mega-tends merit close attention of marketers Eg., a customised newspaper could be launched- but would it have sufficient readers & advertisers?
Japan
Mobile internet
On the move- internet
Torn Jeans
A Trend - Modern
Punk Trends
Understand the niche market
Punk Trends
Punk Style
Twitter is killing the Hollywood box office, according to film bosses who fear that instant fan reviews on the micro-blogging site can seriously damage a movie's prospects. A slew of summer films have faltered after their opening weekends, including Bruno. Conversely, Transformers: Revenge of the Fallen, while slated by critics, became the season's break-out blockbuster. http://www.telegraph.co.uk/technology/twitter/606926
Faith Popcorn
Heralded as "the Nostradamus of marketing" by Fortune magazine, Faith Popcorn is the premier trend guru; her national bestseller The Popcorn Report identified the business and personal trends that took off in the early 90's, from "cocooning" to "cashing out." Nobody has been more accurate in demonstrating how to profit from tracking the trends, and in Clicking, Popcorn describes how to CLICK into more recently identified trends to future-fit themselves professionally and personally. Clicking is an invaluable road map to the newest lifestyle trends. It's about possibilities, taking chances, and taking charge of the future -- now.
Faith Popcorn
Ms. Popcorn has coined various terms and phrases in her publications. For example "Brailling the culture" is her term for analyzing a range of cultural developments. Ms. Popcorn has identified a number of trends that she argued determine consumer behavior. She also developed a marketing model she calls "InCulture Marketing" which she says turns the culture itself into a medium for brand communications.
Micro-Environment of Company
The Company- Marketing Plans, Department, Internal Environment, Mission Suppliers- Provide resources to the company to produce its goods & services Marketing Intermediaries- help the company promote, sell, distribute. Include resellers, physical distribution firms, marketing services agencies
Micro-Environment of Company
Customers- Types of markets: Consumer, Business, Govt., International Competitors- A company must provide greater customer value & satisfaction than its competitors do Publics- A public is any group that has an actual or potential interest or impact on an organization's ability to achieve its objectives-
Publics
Financial publics- Influence the company's ability to obtain funds- banks, inv houses, Media publics- Carry news, features, editorials Government publics-mgt must take govt. developments into account Citizen-action groups- Companys activities are questioned by consumer organizations, environmental groups, minority groups etc
Publics
Local publics- include neighborhood residents, & community organizations, General public- The companys image affects its buying Internal publics- include workers, managers, volunteers, board of directorswhen employees feel good about the company , this positive attitude spills over to the external publics
Demographics
People make up markets Marketers are interested in size & growth rate of the population- in different cities, regions, & nations; age distribution, ethnic mix, educational levels, household patterns, regional characteristics & movements.
World Population
Because births outnumber deaths, the world's population is expected to reach about 9 billion by the year 2040.
World Population
Asia accounts for over 60% of the world population with almost 3.8 billion people. The Peoples Republic of China and India alone comprise 20% and 17% respectively. Africa follows with 840 million people, 12% of the world's population.
World Population
Europe's 710 million people make up 11% of the world's population. North America is home to 514 million (8%), South America to 371 million (5.3%), and Australia to 21 million (0.3%).
Demographics
Classified on various parameters
Regional Characteristics
People cross borders easily today
Movement of Population
Travel
National movement
People travel & settle across states & countries
Traveling population
Migration labour
Demographics
Age Distribution- Old & Young
Demographics- Age
Pre-school School- age children Teens Young adults- 25-40 years Middle-age adults- 40-60 years Older adults- Over 65 years
Education - Demographics
Education levels affect demographics
Demographics
Educational Levels
Demographics- Occupation
Engineer Chef
Demographics- Occupation
Executives & Office Staff
Actors
Lawyer
Lawyer
Demographics-Labour
Construction workers
Demographics
Ethnic Mix
Household Patterns
A traditional family consists of a husband, wife & children, sometimes grandparents But today, there are many diverse & nontraditional households- live-alones, singleparent families, childless married couples, empty nesters SSWD group consists of Single, Separated, Widowed, Divorced.
Demographics- Family
Household Patterns
American Society
The Baby Boom Generation is the generation that was born just after World War II, a time that was marked by an increase in birthrates worldwide. Baby Boomers in their teenage and college years were characteristically part of the counterculture of the 1960s, but later became more ideologically divided, although the generation remained widely committed to keystone values such as gender equality, racial equality, and environmental stewardship.
American Society
Baby Boomers and Gen X
American Society
Generation X is the generation generally defined as those born after the baby boom ended, extending from the early-to-mid 1960s to late 1970s. They associated with the pop culture of their youth in the 1980s to the early 1990s. Other names used interchangeably with Generation X are Reagan Generation,13th Generation,and Baby Busters.
American Society
Generation Y is also known as Generation Next or the Millennials. Generation Y spans from circa 1980 to the late 1990s The following Generation, referred to as Generation Z, and various other names, was born between the early-1990s and end of the 2000s
Demographics
Household Patterns
Macro to Micro-markets
The effects of these changes is fragmentation of the mass market into many micro-markets differentiated by age, sex, ethnic background, education, geography, lifestyle, etc Each group has strong preferences & is reached through targeted communication media & distribution channels
Economic
Markets require purchasing power as well as people The purchasing power depends on current income, prices, savings, debt, & credit availability Marketers need to keep close watch on income levels & consumer spending patterns
Economic
Credit availability
Economic
Nations vary greatly in the level & distribution of income A major determinant is the nations industrial structure
Economic
Four types of industrial structures can be distinguished: Subsistence Economies Raw material exporting economies Industrializing economies Industrial economies
1-Subsistence Economies
Subsistence Economies In a Subsistence Economy vast majority of people engage in simple agriculture They consume their output & barter the rest for goods & services This includes Bangladesh, Cambodia & Pakistan
Agriculture
Farming & Agriculture based economy
Agriculture
Agriculture
Raw materials
Raw materials
Raw material
Raw mtrl
Wealthy rulers
Wealthy ruler
Lifestyle products
Lifestyle products
Lifestyle products
Comfortable furniture
Lifestyle products
Beauty Products
Western products
Western products
Foreign Residents
3-Industrializing Economies
Industrializing Economies: In an industrializing economy, manufacturing begins to account for 10 to 20% of the countrys gross domestic product (GDP) Include India & Philippines As manufacturing increases the country relies on imports of raw material , steel, & heavy machinery, & less imports of finished textiles, paper products & processed foods
Manufacturing
Manufacturing
Manufacturing Industry
Manufacturing
Manufacturing
Industrializing Economies
The industrialization creates a new rich class & a growing middle-class, both demanding new products, some of which can only be imported
4-Industrial economies
Industrial economies: In Asian industrial economies such as Japan, South Korea & Taiwan are major exporters of manufacturing goods & investment products They buy manufactured goods from each other & also export them to other type of economies in exchange for raw materials & semi-finished goods. The large & varied manufacturing activities of these industrial nations & their sizable middleclass make them rich markets for many goods.
Industrial economies
Income distribution is related to a countrys industry structure & is also affected by the political system There are five income distribution patterns:
Natural Environment
The air & water pollution in world cities have reached gigantic proportions There is great concern about industrial chemicals creating a hole in the ozone layer Marketers need to be aware of the opportunities & threats associated with the natural environment
Natural Environment
Natural Environment
Solar Power
Pollution
Industrial Pollution
Water Pollution
In seas
International Governments
France & USA
Cultural Forces
The cultural environment a person grows up in shapes his beliefs & values; which tend to persist Thus, Indians believe in hard work, getting married, & are pious Core beliefs are passed on from parents to children, reinforced by major social institutions like schools, colleges, religious groups, business & government
Cultural Forces
Secondary beliefs & values are open to change Believing in institution of marriage is a core belief; believing that people ought to marry early is a secondary belief. Marketers have some chance of changing secondary values, but little chance of changing core values
Cultural Forces
Marketers can spot cultural shifts that open up new marketing opportunities & threats Eg. Percentage of people who value physical fitness has been steadily rising, particularly in the under-30 group, & upscale segment
Cultural Forces
Marketers of health foods , exercise equipment, & gymnasiums cater to this trend with appropriate products & communication People are also becoming calorie conscious; hence, low calorie snacks can be targeted to this segment
Opening of gyms
Gymnasiums
Culture
Understand the culture
Political
The political environment is composed of laws, government agencies, & pressure groups that influence and limit various organisations & individuals in society Government legislation regulates business
Political
Eg. Alcohol & cigarette advertising is banned since it promotes these stimulants Home appliances undergo safety checks Food companies need special approval for vegetarian & non-vegetarian items Business legislation protects companies from each other
Political
Companies establish legal review procedures & promulgate ethical standards to guide their marketing managers Promulgate:1.to make known by open declaration; publish; proclaim formally or put into operation (a law, decree of a court, etc.).2.to set forth or teach publicly (a creed, doctrine, etc.).
Technological
Advancement in Medical technology
Technological
The most dramatic force shaping peoples lives is technology Technology has release many wonders like penicillin , & many new health treatments Also, technology has released the bomb, & many guns
Technology
Modern warfare equipment
Warfare Technology
Modern equipment
Technological
Other products like the automobile, video games & ready to eat food has also been due to futuristic technology Each technology has long term consequences that cannot be foreseen CDs hurt Records & cassettes, Internetpostal service, Digital photography-Film business.
Technological
Technological Advancement
Technology
Aircrafts
Technological
Fast Trains
Subways
Fast Cars
Automobiles
Video Games
Video games Video parlours
Being Proactive
Proactive planning is the concept of planning AHEAD of the actual event, to be prepared for it (whatever it is). By being proactive you avoid being over-run by the event, and have plans and procedures in place to cope with it (whatever it is). Emergency organizations, like police have plans for future events like riots, floods or earthquakes, you should, too.
Be Prepared- Always!