Transcript The Demographic Environment

PART
2
CAPTURING
MARKETING INSIGHTS
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
4th Edition
3-1
Chapter
3
GATHERING
Information & Scanning the
Environment
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
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In this chapter, we
address the following
questions:
1. What are the components of a modern marketing
information system?
2. What are useful internal records?
3. What is involved with a marketing intelligence
system?
4. What are the key methods for tracking & identifying
opportunities in the macroenvironment?
5. What are some important macroenvironment
developments?
Asian
3-3
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An
4th Edition
Perspective
Adidas’ campaign against counterfeits in the
Philippines
Counterfeits in Asia
5-7 % global merchandise trade
$512b in lost sales 2004
60% - from China
fakes close to real thing
spend more to stop them
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Components of a Modern Marketing
Information System
To carry out analysis, planning,
implementation & control,
Marketing managers need
Marketing Information System
MIS
 Assess information needs, develop &
distribute - timely manner
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Table 3.1
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Information Needs Probes
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Components of a Modern Marketing
Information System
MIS - 3 components
1.Internal records system
– Order-to-payment cycle & sales
2.Marketing intelligence system
– Daily developments - market
environment
3.Marketing research system
– Collection, analysis & reporting of data
relevant to marketing situation
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Internal Records & Marketing Intelligence
The Order-to-Payment Cycle
Heart of internal records system
Orders sent to firm; Invoices sent
Out-of-stock items back-ordered
Customers favor timely delivery
Internet - speed, accuracy, efficiency
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Internal Records & Marketing Intelligence
Sales Information Systems
7-Eleven chain Japan customizes merchandise
 Use sophisticated sales information system
 Marketing needs accurate current sales reports
Asian - get right signals
 Carefully interpret data
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Internal Records & Marketing Intelligence
Databases, Data Warehousing & Data Mining
 Databases (customer/product/sales)
 Score
customers - frequency & value
 Send offer to highest scores
 Better response rate & save mail expense
 Data warehousing - data easily accessible
 Data mining - insights into neglected
segments
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Internal Records & Marketing Intelligence
Databases, Data Warehousing & Data Mining
 Manage database: business
integration software
Eg: Ben & Jerry’s
Pint tracking number put in database
Sales see flavors with most sales
Marketing check online orders
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Internal Records & Marketing Intelligence
The Marketing Intelligence System
marketing intelligence system
procedures & sources
to get information on developments
in marketing environment
 Books, newspapers, trade publications
 Talk to customers, suppliers, distributors
 Meet other company managers
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Internal Records & Marketing Intelligence
The Marketing Intelligence System
Improve marketing intelligence quality HOW?
1. Train sales - spot developments
2. Motivate middlemen - share intelligence
3. Network externally
4. Customer advisory panel
5. Government data resources
6. Purchase data from suppliers
7. Online customer feedback systems
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Analyzing the Macroenvironment
Needs & Trends
 Fad
– Unpredictable, short-lived, little significance
 Trend
– Direction of events with some momentum &
durability
 Megatrends
– Major social, economic, political &
technological changes - long-lasting influence
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Analyzing the Macroenvironment
Needs & Trends
 Successful companies respond to unmet
needs & trends
– Eg FedEx was created to meet need for
next-day mail delivery
 Market research assess profit potential of
opportunity
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Analyzing the Macroenvironment
Identifying the Major Forces
Global forces affect companies & consumers
Firm must monitor 6 major forces:
Demographic
Economic
Social-cultural
Natural
Technological &
Political-legal
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The Demographic Environment
 This store is in old part of town in Ipoh Malaysia
 Singer sewing machines less popular in urban areas
 More working women & smaller families
 Suburban towns - good sales
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The Demographic Environment
Worldwide population growth
Changing mixes of age, ethnic
composition & educational levels
Rise of non-traditional families
Large geographic shifts in population
Micromarketing from mass marketing
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The Demographic Environment
Worldwide Population Growth




Main demographic force - population
Population explosion –major concern
Insufficient food, overcrowding, pollution
Large population - attractive potential
population ≠
markets
unless sufficient purchasing power
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The Demographic
Environment
Worldwide Population
Growth
A Mattel ad in
Chinese
Hot Wheels toy
Headline reads:
“Hot Wheels
Performance Tracks
Great Varieties,
Great Challenges!”
 Eg: China - Skyrocketing population
 Limit families to 1 child – get full attention
 Trend – companies like Mattel & Lego - exploit
opportunity aggressively Asian
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The Demographic Environment
Population Age Mix
 Populations vary in age mix
 Global trend
Aging population
Falling fertility rates
Future Asian retiree: affluent,
cosmopolitan
Good market for travel, entertainment
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The Demographic Environment
Population Age Mix
6 Age Groups:
1. Preschool
2. School-age children
3. Teens
4. Young adults age 25 to 40
5. Adults age 40 to 65
6. Older adults age 65 & up
Most populous groups shape marketing
environment
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The Demographic Environment
Ethnic & Other Markets
 Countries vary in ethnic & racial makeup
 Ethnic groups - specific wants & buying
habits
 Asia’s ethnic diversity:
> 20 major languages &
> 12 major religions in 12 Asian countries
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The Demographic Environment
Educational Groups
Asians desire for knowledge
demand for
 Books, education
 Offshore campuses
 Joint degree programs
 Online courses
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The Demographic Environment
Educational Groups
5 educational groups:
1. Illiterates
2. High school dropouts
3. High school degree holders
4. College degree holders
5. Professional degree holders
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The Demographic Environment
Household Patterns
Traditional
household
 Husband,
wife &
children
Non-traditional household
 Singles
 Single-parent families
 Divorcees
Growing rapidly
 Distinct needs, buying habits
– Eg smaller furniture, food sets
 Singles can spend > family
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The Demographic Environment
Geographical Shifts in Population
 Migration between/within countries
– Eg 1997 - Hong Kong reverted to China
– Hong Kongers migrate to other countries &
increase demand for housing & education
 Marketers target these new & successful
population members
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Other Major Macroenvironments
Economic Environment
Markets need purchasing power & people
Economy’s purchasing power depends on
1.Current income
2.Prices
3.Savings
4.Debt
5.Credit availability
Strong impact if products geared - high-income
& price-sensitive consumers
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Other Major Macroenvironments
Economic Environment
- INCOME DISTRIBUTION
4 types of industrial structures:
1.Subsistence economies
2.Raw-material-exporting economies
3.Industrializing economies
4.Industrial economies
Shifting income distribution in
countries - affluence levels rising
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Other Major Macroenvironments
Economic Environment - INCOME DISTRIBUTION
5 income-distribution patterns:
1.
2.
3.
4.
5.
6.
© Kotler, Keller, Ang, Leong & Tan
Very low incomes
Mostly low incomes
Very low & high incomes
Low
Medium, high incomes
Mostly medium incomes
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Other Major Macroenvironments
Economic Environment - INCOME DISTRIBUTION
Marketers to consider:
 Cross-national income differences
 Intracountry variations in income
 Income gap between more & less developed
Asian countries may narrow over time
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Other Major Macroenvironments
Economic Environment
SAVINGS, DEBT & CREDIT AVAILABILITY
Consumer expenditures affected by
savings, debt & credit availability
Eg Japan

Recession ate into savings

Prefer eating in - more ready-to-eat meals sold

7-Eleven increased food market

7-Eleven - bill payments services
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Other Major Macroenvironments
Economic Environment
OUTSOURCING & FREE TRADE
Outsourcing - migration of jobs

Eg: In 2003, IBM moved jobs to India & China

Competitive necessity but unemployment
Asian firms benefit - outsourcing trend
Outsourcing cut 20-70 % labor costs
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Other Major Macroenvironments
Social-Cultural Environment
 Society shapes beliefs, values & norms tastes & preferences
 Understand people’s views of themselves,
others, organizations etc
 Market products - match society’s values
& needs of different subcultures
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Other Major Macroenvironments
Social-Cultural Environment
Views of themselves
 Groups with different views of themselves
Views of others
 Concerned with social problems, seek “own
kind” & relationships
– Market for social-support services
– Market for “social surrogates” - television &
Internet chat rooms
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Other Major Macroenvironments
Social-Cultural Environment
More Japanese teenagers view
themselves as individualists
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Other Major Macroenvironments
Social-Cultural Environment
Views of organizations
 Attitudes toward organizations vary
 Decline in loyalty
 Downsizings bred distrust
 Companies: win back employee confidence
Views of society
 Consumption patterns - social attitude
 Makers - high achievers - eat & live well
 Escapers, seekers: market for movies, camping
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Other Major Macroenvironments
Social-Cultural Environment
Malaysian photo studio – women return to their roots photos taken dressed inAsian
traditional costume
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Other Major Macroenvironments
Social-Cultural Environment
Views of nature
 Master nature - technology
 Concerned – fragile nature, finite resources
 Demand for eco-tours to the wild
Views of the universe
 Asia - multi religious
 Conviction & practice varies
 Non-religious: self-fulfillment & gratification
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Other Major Macroenvironments
Social-Cultural Environment
The modern & traditional in Asia
Coca-Cola vending machine
next to Chinese temple
Asian
3-40
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Marketing Management - An
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Other Major Macroenvironments
Social-Cultural Environment
Other cultural characteristics:
1. High Persistence- Core Cultural Values


Hold core beliefs & values that persist
Easier to change secondary than core
2. Existence of Subcultures- shared values
3. Shifts of Secondary Cultural Values
Over Time

Core values - cultural swings do take place
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Other Major Macroenvironments
Natural Environment
Marketers to take note of:
1. Shortages of raw materials
2. Increased costs of energy
3. Increased pollution levels
4. Changing role of governments protect environment
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Other Major Macroenvironments
Natural Environment
 Nature deteriorates - global concern
 Air & water pollution - dangerous levels
 Companies - practices, protect nature
 Green products - protect environment
 Change consumer attitudes - role to
protect environment
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Other Major Macroenvironments
Technological Environment
1. Accelerating pace of change
–
Computers, internet - reduce auto pollution
2. Unlimited opportunities for innovation
–
Virtual reality - consumer reactions to products
3. Varying R&D budgets
–
Content to copy products - slight changes
4. Increased regulation- technological change
–
Public safety
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Other Major Macroenvironments
Political-Legal Environment
Laws, government & pressure groups
influence & limit firms & individuals
Marketers must work:
1.
2.
3.
4.
Within laws - business practices
Engage - special-interest groups
Exploit opportunities - market reform
Deal with corruption
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Other Major Macroenvironments
Political-Legal Environment
INCREASE IN BUSINESS LEGISLATION
But marketers can get around regulations
Eg: Dahongying
– China bans Tobacco advertising
– Yet, Dahongying - sells cigarettes - seen on
TV, billboards & in-store displays
– Why? Dahongying has education business &
libraries with same name
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Other Major Macroenvironments
Political-Legal Environment
INCREASE IN BUSINESS LEGISLATION
To protect:
1. Companies - unfair competition
2. Consumers - unfair business practices
3. Society - unbridled business behavior
“At what point do costs of regulation
exceed the benefits?
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Other Major Macroenvironments
Political-Legal Environment
Shanghai - KFC clone
- Colors
- Colonel Sanders icon
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Beijing – KFC clone
operates
next to KFC
Asian
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Other Major Macroenvironments
Political-Legal Environment
INCREASE IN BUSINESS LEGISLATION
Protect home industries

Eg KFC Bangalore closed - overuse of MSG

Rumors - closed to protect local retailers
Counter protectionistic policies,
foreign firms - new local brands
– Eg “Made-in-Thailand” Heineken beer
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Other Major Macroenvironments
Political-Legal Environment
GROWTH OF SPECIAL-INTEREST GROUPS
Consumerist movement - strengthen
rights & powers of buyers


Eg: true interest cost of loan
Basic ingredients in product
Personal data - customized products
- privacy issues - public policy issue
Consumer affairs - policies - consumer
complaints
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Other Major Macroenvironments
Political-Legal Environment
MARKET REFORM
Consistency - nation-building agenda
Take time- less developed Asian countries
– Vietnam’s doi moi, - criticized as too slow,
over-regulated & inefficient
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Other Major Macroenvironments
Political-Legal Environment
CORRUPTION
Corruption - Asian officials- rife
Bribes paid - smallest of clearances
Survey - Chinese - most willing pay bribes
Asian governments to clean up - longterm economic dividends
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Final discussion
Marketing Debate - Is Consumer Behavior More a Function
of a Person’s Age or Generation?
One of the widely debated issues in developing marketing
programs that target certain age groups is how much
consumers change over time. Some marketers maintain that
age differences are critical & that the needs & wants of a 25year-old in 2006 are not that different from those of a 25year-old in 1976. Others dispute that contention & argue that
cohort & generation effects are critical & that marketing
programs must therefore suit the times.
Take a position: Age differences are fundamentally more
important than cohort effects versus Cohort effects can
dominate age differences
Marketing Discussion - What brands & products do you feel
successfully “speak to you” & effectively target your age
group? Why? Which ones do not? What could they do better?
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Video Links
Secondary Videos to watch:
 Burke, Inc. (9:01 min)
 DDB Worldwide (6:55 min)
 Hasbro (9:41 min)
Click here to watch the video clips from
the US Website.
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