Demographics, Environments and Strategy

Introduction to Marketing Strategy

  • Discussion of how microenvironment and macroenvironment influence marketing strategy.

  • Importance of firms continuously monitoring internal and external environments to identify opportunities and consumer needs.

Key Elements in Marketing Strategy

  • Ability to manage micro and macro environments impacts firms' marketing strategies.

  • Successful marketers adapt products/services to meet new challenges and capitalize on opportunities.

  • Environment analysis helps assess strengths and value of products/services.

Microenvironment

  • Components include the company, its capabilities, competition, and corporate partners.

Company's Capabilities

  • Focus on satisfying customer needs that align with core competencies.

    • Example: Apple

    • Strength in design, manufacturing, distribution; successful brand extensions leverage core competencies.

    • Encourage students to identify companies with successful or failed extensions.

Brand Extension Examples

  • Successful Extensions:

    • Apple - Apple TV and production in originals.

    • GoPro - Attempted drone product flopped.

  • Unsuccessful Extensions:

    • GoPro - Investment in drones that led to poor outcomes.

    • Disney - Attempted arcades in the US that failed.

    • Crystal Pepsi - a gimmick that did not resonate.

Competition in Microenvironment

  • Importance of understanding direct and indirect competitors, their strengths, weaknesses, and market reactions.

    • Proactive assessment shapes competitive strategy.

  • Essential Questions for Marketers:

    • Should we compete? What markets? How?

    • Activity prompt: Generate potential sources of competitive intelligence including reviews, annual reports, company websites, trade magazines.

Competitive Intelligence

  • Review sources help identify competitors’ strengths and weaknesses.

  • Discussed the example of Gillette vs. Dollar Shave Club/Harry's

    • Gillette held a 70% market share, dropping to below 50%.

    • Startup subscriptions disrupt established brands.

Ethical Considerations

  • Marketing strategies should not involve negative competition alone; consider the benefits of acknowledging competitors positively.

    • Example: PlayStation's acknowledgment of Nintendo, enhancing brand warmth and trust.

Macroenvironment

  • Includes culture, demographics, social/natural trends, technological advances, economic situations, and political/legal environments.

    • Acronym: CD STEP for remembering macroenvironment factors.

Culture

  • Defined as shared meanings, beliefs, morals, values, customs transmitted through generations.

  • Products/services must be culturally relevant.

    • Example: McDonald's menu variations in different countries.

Subcultures and Regional Differences

  • Example: Differences in hot prepared meal purchases between Quebec and Ontario.

  • Barbecue sauce preferences as an example of regional variations.

Demographics

  • Characteristics used to identify consumer markets, for example: age, race, gender, income, education.

  • Generational Cohorts:

    • Groups with similar purchase behaviors from shared experiences.

    • Categories include Gen Z, Gen Y, Gen X, Baby Boomers.

Socioeconomic Status (SES)

  • Composed of education, income, and occupational status.

  • SES impacts consumer behavior, healthcare, and other societal engagements.

  • Marketers categorize consumers based on SES for segmentation.

  • Relative Deprivation:

    • Feeling worse off than peers impacts purchasing behaviors.

Technological Environment

  • Role of technology in enhancing product value and improving marketing strategies, notably the rise of AI.

  • Key Statistics:

    • 94% of companies use marketing technologies, predicting growth in spending on Martech.

    • AI's impact on productivity and cost efficiency in marketing decisions.

Political/Legal Environment

  • Consists of relevant legislation and government regulations affecting trade.

  • Consideration of how limited competition affects market service levels and prices.

    • Example: Discussions on monopolistic practices and their impact on consumers.

Conclusion

  • Firms that effectively analyze their environments can better align their strategies with market needs and consumer behaviors.

  • Emphasis on continuous learning and adaptation in marketing strategies is critical to success.

  • Next session will further discuss product development and brand strategies in relation to core competencies and market positioning.