p. 96
PPT 3-15
PPT 3-16
p. 96
PPT 3-17
p. 97
PPT 3-18
Explain how changes in the demographic and economic
environments affect marketing decisions.
THE MACROENVIRONMENT
Demographic Environment
Demography is the study of human populations in terms of
size, density, location, age, gender, race, occupation, and
other statistics.
The demographic environment involves people, and people
make up markets.
Demographic trends include changing age and family
structures, geographic population shifts, educational
characteristics, and population diversity.
Changes in the world demographic environment have major
implications for business.
Thus, marketers keep close track of demographic trends and
developments in their markets, both at home and abroad.
The Changing Age Structure of the Population
The U.S. population is currently about 323 million and may
reach almost 364 million by the year 2030.
The single most important demographic trend in the United
States is the changing age structure of the population.
Baby Boomers. The post–World War II baby boom
produced 78 million baby boomers, born between 1946 and
1964.
Baby boomers account for nearly 26 percent of the
population and control 70 percent of the nation’s disposable
income, as well as half of all consumer spending.
As they reach their peak spending years, boomers will
continue to constitute a lucrative market for many products
and services.
It would be a mistake to think of older boomers as phasing
Learning Objective
2
p. 96
Figure 3.2: Major
Forces in the
Company’s
Macroenvironment
p. 97
Key Term:
Demography
p. 97
Key Term:
Baby boomers
p. 97
Photo: Walgreens
out or slowing down. Today’s boomers think “young” no
matter how old they are.
Assignments, Resources
Use Small Group Assignment 1 here
p. 97
p. 98
p. 100
PPT 3-19
Generation X. The baby boom was followed by a “birth
dearth,” creating another generation of 49 million people
born between 1965 and 1976. Author Douglas Coupland
calls them Generation X.
The GenXers developed a more cautious economic outlook,
and are a more skeptical bunch, though they are more likely
to be receptive to irreverent ad pitches that make fun of
convention and tradition.
Millennials (also called Generation Y or the “echo”
boomers). Born between 1977 and 2000, these children of
the baby boomers number 83 million or more. Though they
are larger than the baby boomer segment, they are the most
financially strapped generation. Just because of their
numbers, though, they make up a huge and attractive
market, now and in the future.
Generation Z, born after 2000, totals approximately 82
million, and includes several age cohorts:
Kids (under age 10)
Tweens (age 8–12)
Teens (age 13–18)
They represent tomorrow’s markets and are now
forming brand relationships that will affect their buying
well into the future.
Generational marketing. Rather than risk turning off
one generation in favor of another, marketers need to
form precise age-specific segments within each group.
It may be more useful to segment people by lifestyle, life
stage, or common values they seek in the products they
buy.
p. 97
Key Term:
Generation X
p. 98
Photo: Lowe’s
p. 98
Key Term:
Millennials
(Generation Y)
p. 99
Ad: Fifth Third
Bank
p. 99
Key Term:
Generation Z
p. 100
Photo: The North
Face
Assignments, Resources
Use Discussion Questions 3-3 and 3-4 here
Use Individual Assignment 1 here
Use Think-Pair-Share 1 here
p. 100 The Changing American Family
PPT 3-20
The “traditional household” consists of a husband, wife, and
children (and sometimes grandparents).
In the United States:
Married couples with children under 18 represent
only 19 percent of U.S. households.
Married couples without children make up 23
percent.
Single parents comprise 14 percent.
Nonfamily households make up 34 percent.
Both husband and wife work in 60 percent of all
married-couple families. Women make up 47 percent of the
workforce today.
p. 100
Photo: Modern
Family
Assignments, Resources
Use Additional Project 4 here
Use Think-Pair-Share 2 here
p. 101
PPT 3-21
p. 102
PPT 3-22
Geographic Shifts in Population
About 12 percent of all U.S. residents move each year. The
U.S. population has shifted toward the Sunbelt states.
Americans have been moving from rural to metropolitan
areas.
Such population shifts interest marketers because people in
different regions buy differently.
A Better-Educated, More White-Collar, More
Professional Population
The U.S. population is becoming better educated. In 2012,
88 percent of the U.S. population over age 25 had
completed high school, and 32 percent had a bachelor’s
degree or better, up from 66 percent and 16 percent,
respectively, in 1980.
Increasing Diversity
The United States has become more of a “salad bowl” in
which various groups have mixed together but have
maintained their diversity by retaining important ethnic and
cultural differences.
The U.S. population is about 62.2 percent non-Hispanic
p. 101
Ad: GoToMeeting
white, with around 17.4 percent Hispanic and 13.2 percent
African-American. The Asian-American population now
totals more than 5.4 percent of the population.
By 2060, Hispanics will grow to about 28 percent,
African-Americans will be about 14 percent, and Asians
will increase to 9 percent.
Diversity goes beyond ethnic heritage. Many companies
explicitly target gay and lesbian consumers.
According to one estimate, the 6 to 7 percent of U.S. adults
who identify themselves as lesbian, gay, bisexual, and
transgender (LGBT) have buying power of more than $884
billion.
Another attractive segment is the 53 million adults with
disabilities, representing from $200 to $500 billion in
annual spending power.
p. 102
Ad: Southwest
Assignments, Resources
Use Marketing By the Numbers here
Use Think-Pair-Share 3 here
Use Outside Example 2 here
p. 103
PPT 3-23
PPT 3-24
PPT 3-25
Economic Environment
The economic environment consists of factors that affect
consumer purchasing power and spending patterns.
Before the Great Recession, American consumers fell into a
consumption frenzy, amassing record levels of debt.
However, consumers have now adopted a back-to-basics
sensibility in their lifestyles and spending patterns.
Value marketing means just the right combination of
product quality and service at a fair price.
Income Distribution
Income distribution in the United States is highly skewed.
The rich have grown richer, the middle class has shrunk,
and the poor have remained poor.
This uneven distribution of income has created a tiered
market.
p. 103
Key Term:
Economic
environment
p. 104
Photo: Target
p. 104
PPT 3-26
PPT 3-27
PPT 3-28
PPT 3-29
Review Learning Objective 2: Explain how changes in the
demographic and economic environments affect marketing
decisions.
Identify the major trends in the firm’s natural and
technological environments.
The Natural Environment
The natural environment involves the natural resources that
are needed as inputs by marketers, or that are affected by
marketing activities.
Trends in the natural environment:
1. Growing shortages of raw materials
2. Increased pollution
3. Increased government intervention
4. Companies developing strategies and practices that
support environmental sustainability. This means
meeting present needs without compromising the
ability of future generations to meet their needs.
Learning Objective
3
p. 104
Key Term: Natural
environment
p. 104
Ad: Walmart
p. 105
Key Term:
Environmental
sustainability
Assignments, Resources
Use Real Marketing 3.1 here
Use Individual Assignment 2 here
Use Think-Pair-Share 4 here
p. 106
PPT 3-30
p. 108
Technological Environment
The technological environment is perhaps the most dramatic
force now shaping our destiny.
Technology has released such wonders as antibiotics,
robotic surgery, miniaturized electronics, smartphones, and
the Internet. Our attitude toward technology depends on
whether we are more impressed with its wonders or its
blunders.
New technologies can offer exciting opportunities for
marketers.
In the United States, government agencies investigate and
regulate products. These regulations can impact new
technologies and new product development.
Review Learning Objective 3: Identify the major trends in
the firm’s natural and technological environments.
p. 106
Key Term:
Technological
environment
p. 106
Photo: Disney
Assignments, Resources
Use Online, Mobile, and Social Media Marketing
here
Use Small Group Assignment 2 here
p. 108
PPT 3-31
p. 108
PPT 3-32
p. 109
PPT 3-33
p. 109
p. 111
Explain the key changes in the political and cultural
environments.
The Political and Social Environment
Marketing decisions are strongly affected by developments
in the political environment. This consists of laws,
government agencies, and various pressure groups that
influence or limit various organizations and individuals in a
given society.
Legislation Regulating Business
Governments develop public policy to guide commerce.
Legislation affecting business around the world has
increased steadily over the years.
Business legislation has been enacted for a number of
reasons:
1. To protect companies from each other
2. To protect consumers from unfair business practices
3. To protect the interests of society against
unrestrained business behavior
Because government agencies have discretion in enforcing
laws, they can have an impact on a company’s marketing
performance.
Increased Emphasis on Ethics and Socially Responsible
Actions
Socially Responsible Behavior. Enlightened companies
encourage their managers to “do the right thing.”
The boom in Internet marketing has created a new set of
social and ethical issues. Critics worry most about online
privacy issues.
Cause-Related Marketing. To exercise their social
responsibility and build more positive images, many
Learning Objective
4
p. 108
Key Term: Political
environment
p. 110
Table 3.1: Major
U.S. Legislation
Affecting
Marketing
p. 111
Ad: AT&T
companies are now linking themselves to worthwhile
causes.
Assignments, Resources
Use Critical Thinking Exercise 3-6 here
Use Marketing Ethics here
Troubleshooting Tip
Examples of companies who successfully adapt to
changing forces and factors will help students
internalize the messages in this chapter.
p. 111
PPT 3-34
p. 112
PPT 3-35
p. 114
The Cultural Environment
The cultural environment consists of institutions and other
forces that affect a society’s basic values, perceptions,
preferences, and behaviors.
The Persistence of Cultural Values
Core beliefs and values are passed on from parents to
children and are reinforced by schools, churches,
businesses, and government.
Secondary beliefs and values are more open to change.
Shifts in Secondary Cultural Values
Marketers want to predict cultural shifts in order to spot
new opportunities or threats.
People’s Views of Themselves. People vary in their
emphasis on serving themselves versus serving others.
People’s Views of Others. In past decades, observers have
noted several shifts in people’s attitudes toward others.
Trend trackers see a new wave of “cocooning.”
People’s Views of Organizations. By and large, there has
been a decline of loyalty toward companies.
People’s Views of Society. People vary in their attitudes
toward society, which influences their consumption patterns
and marketplace attitudes.
People’s Views of Nature. Recently, people have
recognized that nature is finite and fragile, and that it can be
destroyed by human activities.
p. 111
Key Term: Cultural
environment
p. 113
Photo: Mass
mingling
p. 114
Ad: Annie’s
Homegrown
This renewed love of things natural has created a
41-million-person “lifestyles of health and sustainability”
market.
The U.S. organic-food market generated nearly $81 billion
in sales last year, more than doubling over the past five
years.
People’s Views of the Universe. In general, religious
conviction and practice have been dropping off gradually
through the years.
Review Learning Objective 4: Explain the key
changes in the political and cultural environments.
Assignments, Resources
Use Discussion Question 3-5 here
Use Critical Thinking Exercise 3-7 here
p. 114
PPT 3-36
PPT 3-37
Discuss how companies can react to the marketing
environment.
RESPONDING TO THE MARKETING
ENVIRONMENT
Many companies think the marketing environment is an
uncontrollable element to which they must react and adapt.
Other companies take a proactive stance toward the
marketing environment. Rather than assuming that strategic
options are bounded by the current environment, these firms
develop strategies to change the environment.
By taking action, companies can often overcome seemingly
uncontrollable environmental events.
Review Learning Objective 5: Discuss how companies
can react to the marketing environment.
Learning Objective
5
Assignments, Resources
Use Real Marketing 3.2 here
Use Critical Thinking Exercise 3-8 here
Use Company Case here