Marketing Trends and Consumer Behavior: Generations, Major Variables, and Influences - Pro, Study notes of Marketing Management

Download Marketing Trends and Consumer Behavior: Generations, Major Variables, and Influences - Pro and more Study notes Marketing Management in PDF only on Docsity! Exam 1 Business 2 Consumer Markets Who? - Demographics: A description of a population according to characteristics such as age, gender, ethnicity, income, and occupation. o Cohorts: § Baby Boomers: Baby boomers are the generation born between 1946 and 1964. The baby boomers comprise 28 percent (about 82 million) of America and control approximately 77 % of the nation’s wealth. Baby boomers are normally receptive to anything that makes them feel younger. § Generation X: The members of the US population born between 1965 and 1976. Generation X accounts for approximately 16 percent of the population. They are well educated, tolerant of diversity and are considered cynical and skeptical. They started planning for retirement before baby boomers using investments and 401 (k) plans. § Generation Y: Americans that were born from 1977 to 1994 (1976 was the year that many of the baby boomers began having children). They comprise about 21 percent of the population and are considered to be very tech savvy. Great influence on music, sports, computers and videogames. Big on volunteerism. Nice, idealistic generation. o Major Variables: (these are not trends but rather influence trends) § Age Distribution § Family Structure § Socio Cultural factors § Technological factors o Major Trends: § Aging Population: also called “The Graying of America.” Associated with a lower birth rate and longer life expectancy. Leads to changing needs and wants such as wellness, financial security, personal safety and recreational needs. · The fastest growing demographic are those people age 100 and older. Has grown from 2,500 people to 72,000 people § Growth of Alternative Households: 21 percent of households are “traditional” households. (Down from 34 percent). 12% of households are single parent and 32% of households are either “live-alones” or same sex couples. · There is a 50 billion dollar market for marriages. 9/10 people say “I do” and half of marriages end in divorce. [Avg. Male is 26, Avg. Female is 25, Avg. Cost is $22,000] § Working Women: in 1950, under 30 percent of women were in the workplace. Today, over 60 percent of women are working. More women going into the marketplace means there is an increased need for 1) day care, 2) career clothes, 3) Merry Maids, 4) life insurance, 5) convenience foods § Income Influences: Includes factors that affect consumer purchasing power and spending patterns. · Changes in income: 1980’s: Consumption Frenzy, 1990’s: “squeezed consumer,” 2000’s: Value Marketing · Income Distribution: Upper Class, Middle Class (has been shrinking), Working Class, Underclass § Increasing Ethnic Diversity: 12.5% are Hispanic American, 12.1% are African American, 3.1% are Asian American, 0.70% are Native American, 1.8% are Two or More Races, and 0.4% are “Other” § Geographic Redistribution: The United States has seen a history of migration to the west. Eisenhower’s interstate system saw 1) migration from urban to rural, 2) increased consumer access, 3) movement south, and west · Nevada is the number one place to migrate to. What? - End Consumer: Also known as the ultimate consumer. The end consumer is the person who actually consumes the product that is made How? - Decision Making o Decision: The process of making choices about which products or services to buy. o Stages § Problem Recognition: actual state does not equal the desired state [Serta Commercial] § Information Search: there are different types, it can be an intense search or an easy search § Alternative Evaluation: different strategies [example: set up evaluation criteria for making a choice and then use that to evaluate decisions; Coupey showed us her decision matrix for choosing where to go work] § Purchase: More decisions are made [from whom to buy and when to buy] § Post Purchase: potential dissatisfaction (occurs when people are unhappy because their expectations associated with a particular decision were not met). People will normally tell 9 people when dissatisfied and only 1-2 people when satisfied. · Cognitive Dissonance: a state of psychological discomfort arising when a consumer tries to reconcile two conflicting states of mind, for example, the positive feeling of having chosen to buy a product and the negative feeling of being disappointed with it afterwards. - External Influences: - NAICS: North American Industry Classification System. Provides common industry definitions for Canada, Mexico, and the United States What? - Not the End Consumer o Differences (B2C vs. B2B) § B2C · Pleases one person · Many end consumers · Sales lower in quantity and price · Geographic dispersion § B2B · Pleases many people · Fewer organizational customers · Sales high in quantity and price · Geographic concentration o The biggest difference is the nature of demand § Derived Demand: indirect, based on consumer demand (is also called second order demand) · Inelastic Demand: changes in price have little effect on amount purchased · Fluctuating Demand: small changes in consumer demand mean large changes in B2B demand · Joint Demand: demand for one product/component is affected by the availability of other products. How? - B2B Decision Process o Stages § Is just like the consumer decision steps above (Most likely for New Buy situation) § 1) Problem Recognition, 2) Information Search, 3) Evaluation of Alternatives, 4) Product and Supplier Selection, 5) Post-purchase Evaluation § Who buys? · Professional buyers: purchasing agents, procurement managers, directors of materials management · Buying Center o Buy-Classes: Three types of organizational buying situations: § Straight Rebuy: Buyer or purchasing manager reorders an existing product or service from a list of acceptable suppliers. Examples of straight rebuys normally include office supplies and maintenance services. [involves one person (purchasing agent), fast decision time, lowest price] § Modified Rebuy: Influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier. The item purchased is largely the same, changes normally include enlarging the buying center to include those outside the purchasing department (Nike changing the shoe is an example of modified rebuy). [generally current supplier, some other change to mix, purchasing agent with help of others] § New Buy: The organization is a first time buyer of the product or service. Involves greater potential risks in the purchase, so buying center is enlarged to include all those who have a stake in the new buy. Ex: P&G purchased Corning, Inc. [involves many people, long decision time, uncertain problem definition] o Buying Center: Group of people in an organization who participate in the buying process. This group of people normally share common goals, risks, and knowledge important to decisions. These people are charged with the responsibility of whether to buy the product (is a cross functional team of decision makers with different, specified roles) § Reverse Marketing: is the concept of making potential customers seek you out instead of the other way around. o Internet Effects: Has an effect as 1) a content source for information gathering, 2) a communications resource for negotiation, and 3) channel resource for aspects of trade settlement. Three methods: § Consortia-Led: companies share ownership and form a strategic alliance. § Proprietary Network: privately owned and integrates the buying and selling activities of the supply chain members (Wal-Mart) § Third Party: market-makers who are not owners (Ebay) Global Markets Who? - Differences Between Countries o Ethical Issues: Two types: § Cultural Relativism: “when in Rome” § Ethical Imperialism: “my way or the highway” - International Marketing Decisions o Look at global marketing env. à decide whether to go international à decide which markets to enter à decide how to enter à decide on global marketing program à decide on global marketing organization What? - B2C - B2B - Trade System Characteristics (Country-level) How? - Decision Process: o Country Scan: The International Trade System: look at restrictions, tariffs, exchange control, embargos, etc. A regional free trade zone is when a group of nations organizes to work towards a common goal in regulation of international trade. § EU: Establishes a regional free trade zone § NAFTA: Establishes a regional free trade zone § FTAA: Establishes a regional free trade zone § WTO: Helps to reduce tariffs and other international trade barriers § GATT: Helps to reduce tariffs and other international trade barriers o Make the decision to enter or not enter § Economics · Industrial Structure · Income Distribution § Political-Legal Environment · Attitudes toward foreign firms · Government bureaucracy · Political stability · Monetary regulations § Socio-Cultural Environment · Effect of marketing strategy on culture · Effect of culture on marketing strategy o Make the decision about what country to enter § Choose possible countries and rank them based on market size, market growth, cost of doing business, competitive advantage, and risk level o Which approach do we want to use when entering? § Direct Export: either indirect or direct. Has the least amount of risk. You sent your products out and keep the company domestic. § Joint Venture: partner up and form a strategic alliance. · Licensing: Budweiser and Japan · Contract Manufacturing: Sears has manufacturing plants in Mexico · Management Contracting: Hilton Hotels – sells out its management skills · Joint Ownership: Buy interest in a business: KFC and Japan § Direct investment: Includes assembly and manufacturing facilities. This option has a very high risk because you are setting up everything in another country. All of the ownership is on you. § As we move from direct export to direct investment, the risk associated with the approach used in entering increases. o Deciding on the Global Marketing Program § Straight Extension: don’t change the product or the promotion (Gillete razors) § Communication Adaptation: don’t change the product but change the promotion § Product Adaptation: change the product but don’t change the promotion § Dual Adaptation: change the product and the promotion § Product Invention: create a new product and use a new or old promotion technique o Organize Channels