BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 1 THE MARKETING ENVIRONMENT

BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 2 THE MARKETING ENVIRONMENT Culture Demographics Social Technology Economic Political and Legal Factors

BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 3 DEMOGRAPHICS Distribution of people across statistical categories –Occupation –Income –Ethnicity  Language usage –Age  Birth rates –Residence (e.g., urban/rural)

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BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 5 Japan: Actual and Projected Population Figures

BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 6 China: Actual and Projected Population Figures

BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 7 SOCIAL FACTORS Values—tensions –Value of privacy and security vs. convenience –“Green” products vs. Cost Convenience Performance “Component lifestyles”

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BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 9 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. In 2013, Hostess entered bankruptcy. The firm was sold off.

BUAD 307 THE MARKETING ENVIRONMENT Lars Perner 10 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-the- road-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