CH3 350

Marketers' Role Regarding the Environment

Marketers must be environmental trend trackers and opportunity seekers.

• They use disciplined methods

  • marketing research

  • marketing intelligence

  • marketing analytics

    • for collecting information and developing insights.

Best Buy's Initial Challenge (2012)

Best Buy fell victim to showrooming, as consumers checked items in store, compared prices online (often with Amazon), and then bought the item online at a lower price.

• Competitors like Circuit City went out of business entirely.

Best Buy's Case + Strategy

Launched the Building the New Blue marketing strategy.

• Adopted a broad-based omniretailing strategy that integrates in-store and online channels to create the omnichannel shopping experience.

• Matches the prices of online sellers, including Amazon.

• Converts showroomers into in-store buyers with nonprice advantages such as immediacy, convenient locations, personal assistance by well-trained associates, and easy returns.

  • Showrooming —> showcasing

• Works closely with consumer technology giants (Apple, Samsung, Microsoft, Sony, even Amazon) to create store-within-store showcases. These areas are staffed by the brand's own salespeople or specially trained Best Buy associates

• Uses its numerous stores to full advantage; 70% of the U.S population living within 15 minutes of a Best Buy store. This allows for easy in-store or curbside pickup and faster delivery options.

• Anchoring the strategy is the recognition that customers need advice and solutions.

  • Geek Squad (now 20,000 agents strong) provides repairs, installations, and tech support.

  • Home Experts provide free virtual and in-home consultations under the tagline Inspiration called. We answered

The Company (Internal Environment)

• Marketers must take other company groups and functions (top management, R&D, operations, accounting) into account.

All departments share the responsibility for profitably creating and recapturing customer value.

IKEA's Partnership with Suppliers

IKEA involves its 1,600 suppliers deeply in the design process (which can take up to 3 years) to bring the customer value proposition to life—refining design, improving function, and reducing costs.

Marketing Intermediaries

help the company promote, sell, and distribute its products to final buyers

• Includes:

  • Resellers (wholesalers, retailers)

  • Physical distribution firms

  • Marketing services agencies

  • Financial intermediaries

Coca-Cola's Intermediary Partnering

When partnering with fast-food chains (e.g., McDonald’s), Coke provides much more than just soft drinks.

• It assigns cross-functional teams, conducts and shares customer research, analyzes demographics, and develops marketing programs

Categories of Publics

1. Financial publics

2. Media publics

3. Government publics

4. Citizen-action publics (consumer/advocacy groups)

5. General public

6. Local publics

   1. Home Depot - Gives back through “Team Depot” employee volunteer hours.

      1. Works to support communities impacted by natural disasters, improve homes for U.S. veterans, and train skilled tradespeople (Path to Pro program).

5 Types of Consumer Markets

1. Consumer markets (individuals/households for personal consumption).

2. Business markets (buy for further processing).

3. Reseller markets (buy to resell at a profit).

4. Government markets (agencies buying for public services).

5. International markets (buyers in other countries).

Baby Boomers (1946–1964)

Nearly 69 million

• They are the wealthiest generation in U.S. history, holding more than 1/2 of U.S. household wealth

• They are the fastest-growing shopper demographic online

  • outspending younger generations 2 to 1

• Caution: The key to marketing to older people? Don’t say ‘old —> focus on needs and lifestyles (e.g., Nike CruzrOne focusing on pace, not age)

Generation X (1965–1980)

65 million

• Less materialistic than boomers/millennials; tend to value experience, not acquisition

• They are skeptical of overt marketing pitches but are more loyal to brands they like.

• They control 26% of the nation’s wealth.

Millennials/Gen Y (1981–1996)

73 million

• The first generation to come of age in a digital world.

• They are generally frugal, practical, connected, mobile, and impatient.

  • Example: P&G’s Tide Pods catered to their quest for time savings and convenience in apartment/dorm living

Generation Z (1997–2012)

• 80 million strong (largest generation in U.S.); 26% of the population.

• Their defining characteristic is utter fluency and comfort with digital technologies.

• They look for value and authenticity.

  • The average attention span of Gen Z is only 8 seconds. They intensely dislike non-skippable, long-form ads.

  • Companies use “bumper ads”—quick bursts of video advertising that last only 6 seconds.

Generation Alpha (Born after 2012)

• Will be the "most formally educated generation ever, the most technology-supplied generation ever, and globally the wealthiest generation ever".

• They are an important gateway to their parents (influencing about 1/2 of household buying decisions).

Generational Marketing Caution

Marketers may need to target more precise age-specific segments within each group.

• Defining people by their birth date may be less effective than segmenting them by lifestyle, life stage, or the common values they seek

• Only about 18% of all households include married parents with children (compared to 44% in 1960)

  • 30% of all households are singles households without children (DINK!!!)

Geographic Shifts in Population

• Move from Snowbelt to Sunbelt states

• Massive shift from cities —> suburbs

  • recently, to “micropolitan areas” (smaller cities beyond congested metro areas).

  • telecommuting has increased.

Post-Recession/Pandemic Spending Pattern

Consumers have remained frugal.

• The marketing watchword has become “value”

  • Companies (from Target to Lexus) are focusing on value for money, practicality, and durability

Target's Economic Adaptation

Shifted focus more toward the “Pay Less” side of their “Expect More. Pay Less.” slogan.

• Introduced a new budget-friendly house brand called Dealworthy and slashed prices on 5,000 household staples

The North Face Environmental Strategy

Practices circular design (responsibly made, easier to recycle)

• Its Renewed Take-Back program encourages customers to return used items to be shipped to The North Face Renewed (where gear is inspected, washed, and resold or recycled)

Patagonia's Commitment

Adheres fiercely to a cause no unnecessary harm mantra.

• Donates 1% of its revenue annually to environmental causes.

Disney World’s MagicBand+

• Technology example

• An RF-embedded wristband called the MagicBand+.

  • Using MyMagic+ services, guests use the band to enter parks, buy food, skip lines at certain attractions, and unlock hotel rooms.

    • It interacts with shows/characters via lights and haptic vibrations.

Children's Online Privacy Protection Act (COPPA) (2000)

Purpose: Prohibits websites or online services operators from collecting personal information from children without obtaining consent from a parent and allowing parents to review information collected from their children.

3 Categories of Legislation

1. Protecting companies and maintaining competitive markets (e.g., Sherman Antitrust Act).

2. Protecting and informing consumers (e.g., Wheeler-Lea Act).

3. Protecting national and societal interests (e.g., Clean Air Act).

Socially Responsible Behavior

Managers should look beyond what the regulatory system allows and simply “do the right thing.”

• These firms seek ways to protect the long-run interests of their consumers and society.

Warby Parker (Cause-Related Marketing)

Sells “eyewear with a purpose”.

• Objective: “to offer designer eyewear at a revolutionary price while leading the way for socially conscious businesses.”

• Program: Buy a Pair, Give a Pair (donated over 15 million pairs).

Dove Campaign for Real Beauty (Social Responsibility Case)

Launched in 2004 after a study found only 2% of 3,300 women and girls surveyed considered themselves beautiful.

• Dedicated to "making more women feel beautiful every day by broadening the definition of beauty".

• Used candid and confident images of real women (unretouched).

Cultural Environment

consists of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors

Core vs. Secondary Cultural Values

• Core beliefs and values (e.g., believing in marriage) are passed on and reinforced, and are persistent

• Secondary beliefs and values (e.g., believing that people should marry earlier in life) are more open to change; marketers can sometimes reshape these!

People's Views of Others (Digital Age)

Digital technologies allow people to connect more, but they are often “alone together.”

• People may sit or walk in their own little bubbles, intensely connected to tiny screens and keyboards

Views of Nature (Modern Trend)

People have recognized that nature is finite and fragile.

• This renewed love of things natural has created a sizable market of consumers who seek out natural and organic products

  • (e.g., Unilever’s Love Beauty and Planet line).

Reactive vs. Proactive Stance

Reactive: Companies passively accept the environment and adapt to threats and opportunities. Proactive: Companies develop strategies to change the environment, influence legislation, press lawsuits, or shape public opinion through social media.

Scenario Analysis

the art and science of preparing for multiple imagined futures.

• Managers predict multiple futures (scenarios) and develop contingency plans for each potential scenario

Crock-Pot's Proactive Response (Case Study)

When the brand was wrongly portrayed as causing a fatal house fire on the TV show This Is Us, Crock-Pot reacted quickly with humor and facts, creating the Twitter account @CrockPotCares and posting: "America’s favorite dad and husband deserved a better exit and Crock-Pot shares in your devastation".

• The campaign helped the brand escape with little long-term damage.

Quote on Company Types (Reacting to Environment)

There are 3 kinds of companies

1. Those who make things happen

2. Those who watch things happen

3. Those who wonder what’s happened