Solutions Manual Principles of Marketing 15th Edition Philip Kotler, Gary Armstrong ( PDFDrive ) PDF

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Chapter 3 ANALYZING THE MARKETING ENVIRONMENT LECTURE STARTER: CHAPTER 3 YouTube: Adapting to the Fast-Changing Marketing Environment

Synopsis YouTube, the Internet video-sharing giant, burst onto the scene only a few short years ago. Last year, it captured more than 1 trillion video views worldwide, giving it a 43 percent share of the online video market. Rather than simply surviving in its chaotic environment, YouTube is thriving, leading the way in shaping how video is produced, distributed, and monetized. Instead of simply providing more access to traditional Hollywood-type content, YouTube created its Partner Program, which encourages aspiring Web video producers to create original new content for YouTube. More than 30,000 partners in 27 countries now participate in the Partner Program, producing new content and sharing the revenue that YouTube generates from ads that accompany their videos. Not only is YouTube generating mind-numbing traffic, it’s also making money. YouTube generates more than $1 billion in annual revenue for Google, its parent company. YouTube is also developing an advertising model that’s built around the way people use the site, a model that best suits the needs of users, content providers, advertisers, and its own bottom line. To remain on top, YouTube will have to be nimble in adapting to the ever-changing marketing environment—or better, in leading the change. Change will be the only constant.

Discussion Objective A brief discussion of the YouTube story will help to illustrate how leading companies don’t just react to changes in the environment – they lead those changes. Going far beyond mere survival, YouTube reinvents itself regularly with new, forward-thinking ideas on how to produce, distribute, and monetize online video. The company’s humble beginnings and nimble marketplace approach paint a clear picture of the impact of the marketing environment on marketing strategy. Here, the discussion goal is to link YouTube’s threats, opportunities, and performance to the rapid changes occurring in the firm’s microenvironment and macroenvironment. This discussion provides a useful transition from the marketing management model provided in Chapter 2 to the concepts of analyzing the marketing environment presented in Chapter 3.

Starting the Discussion To kick off the YouTube discussion, pull up the YouTube website at www.youtube.com and ask the students to select a few of their favorite videos. Watch two or three as a class. What makes these videos useful or entertaining? Would they be willing to also view advertising content in order to watch their favorite videos? Ask students what they believe YouTube does uniquely well, and view a few more examples based on student answers. Be sure to view at least one video from the Partner Program. Finally, how have the students noticed that YouTube has changed over the past year. What do they think of those changes? The key question is this: how and how well has YouTube anticipated and even shaped new demands in the changing marketing environment? Use the following questions to focus the discussion.

Discussion Questions 1.

What appear to be YouTube’s unique strengths in analyzing the marketing environment? Which key principles from this chapter did company planners put to especially good use in anticipating, capitalizing on and even helping shape the new marketing environment? (Here, you will want to focus the discussion on competitors and publics, along with the demographic, economic, technological, can cultural environments. As people’s views of themselves and society have changed, how has YouTube helped drive those changes?)

2.

How have changes in the marketing environment created opportunities and threats for YouTube? (Be sure to include the time period all the way back to YouTube’s early days as a place where regular folks could upload low-quality homemade video clips. Focus on changes in technology, customer’s needs, business processes, and competition. YouTube’s approach to technology created incredible opportunities and advantages for the company. At the same time, which forces might threaten its success?)

3.

How does YouTube’s Partner Program represent a fundamental shift in how companies profit from their products and services? (Encourage students to consider the revolutionary concept of taking on outside content producers and sharing advertising revenues with them. It is also useful to discuss how this represents key insights into the marketing environment. Accompany this question with a viewing of partner Ray Williams Johnson’s YouTube channel, “=3”).

4.

How does the chapter-opening YouTube story relate to what comes later in the chapter? (This question transitions the discussion to Chapter 3 topics such as the impact of the actors and forces in the micro- and macroenvironments and how companies must respond. The key point: the best companies do not merely respond to changes. They help to shape and drive those changes.)

CHAPTER OVERVIEW Use Power Point Slide 3-1 Here This chapter shows that marketing does not operate in a vacuum but rather in a complex and changing environment. Other actors in this environment—suppliers, intermediaries, customers, competitors, publics, and others—may work with or against the company. Major environmental forces—demographic, economic, natural, technological, political, and cultural—shape marketing opportunities, pose threats, and affect the company’s ability to build customer relationships. To develop effective marketing strategies, you must first understand the environment in which marketing operates.

CHAPTER OBJECTIVES Use Power Point Slide 3-2 Here 1. Describe the environmental forces that affect the company’s ability to serve its customers. 2. Explain how changes in the demographic and economic environments affect marketing decisions. 3. Identify the major trends in the firm’s natural and technological environments. 4. Explain the key changes in the political and cultural environments. 5. Discuss how companies can react to the marketing environment.

CHAPTER OUTLINE p. 68

INTRODUCTION YouTube, the Internet video-sharing giant, burst onto the scene only a few short years ago. Last year, it captured more than 1 trillion video views worldwide, giving it a 43 percent share of the online video market. Rather than simply surviving in its chaotic environment, YouTube is thriving, leading the way in shaping how video is produced, distributed, and monetized. YouTube is also developing an advertising model that best suits the needs of users, content providers, advertisers, and its own bottom line. To remain on top, YouTube will have to be nimble in adapting to the ever-changing marketing environment—or better, in leading the change.  Opening Vignette Questions 1. How has YouTube managed to survive and thrive in a hyper-competitive marketing environment? 2. Analyze the company’s attitude toward marketplace change. How has this attitude influenced its success? 3. Do you believe that YouTube can retain the stronghold it now commands in its market niche? Why or why not? 4. In such a rapidly changing marketing environment, what might YouTube be doing in five years? Ten years?

P. 69 Ad: Kraft YouTube

and

More than any other group in the company, marketers must be the trend trackers and opportunity seekers. PPT 3-3

A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.

PPT 3-4

The microenvironment consists of the actors close to the company that affect its ability to service its customers.

p. 70 Key Term: Marketing Environment p. 71 Key Terms: Microenvironment, Macroenvironment

The macroenvironment consists of larger societal forces that affect the microenvironment.  Assignments, Resources Use Additional Project 1 here Use Discussion Question 1 here Use Web Resource 1 here Use Video Case here  Troubleshooting Tip This is an intense chapter, and it presents a lot of information that might make some students’ heads swim. If it hasn’t happened before, this is where students really begin to get the picture that marketing managers need to be highly analytical people. It helps to present the in-depth discussion of current macro trends as something that needs to be understood, but not memorized.

p. 71

THE MICROENVIRONMENT

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Marketing management’s job is to build relationships with p. 71 customers by creating customer value and satisfaction. Figure 3.1: Actors in the Microenvironment The Company

PPT 3-6

All the interrelated groups form the internal environment. All groups must work in harmony to provide superior customer value and relationships.

PPT 3-7

Suppliers

Chapter Objective 1

Suppliers provide the resources needed by the company to produce its goods and services. Marketing managers must watch supply availability— supply shortages or delays, labor strikes, and other events can cost sales in the short run and damage customer satisfaction in the long run. Marketing managers also monitor the price trends of their key inputs. Marketing Intermediaries PPT 3-8

help the company to promote, sell, and distribute its products to final buyers.  Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers. Marketing intermediaries

PPT 3-9

p. 72 Key Term: Marketing Intermediaries

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Physical distribution firms help the company to stock and move goods from their points of origin to their destinations.

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Marketing services agencies are the marketing research firms, advertising agencies, media firms, p. 72 and marketing consulting firms that help the PhotoIKEA company target and promote its products to the right markets.

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Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods.

Today’s marketers recognize the importance of working with their intermediaries as partners rather than simply as channels through which they sell their products. Competitors PPT 3-10 Marketers must gain strategic advantage by positioning their offerings strongly against competitors’ offerings in the minds of consumers. No single competitive marketing strategy is best for all

companies. Publics PPT 3-11

PPT 3-12

p. 73 A public is any group that has an actual or potential interest Key Term: Public in or impact on an organization’s ability to achieve its objectives. p. 73  Financial publics influence the company’s Ad: Life is Good ability to obtain funds. Company  Media publics carry news, features, and editorial opinion.  Government publics. Management must take government developments into account.  Citizen-action publics. A company’s marketing decisions may be questioned by consumer organizations, environmental groups, and others.  Local publics include neighborhood residents and community organizations.  General public. The general public’s image of the company that affects its buying.  Internal publics include workers, managers, volunteers, and the board of directors. Customers There are five types of customer markets. The company may target any or all of these: 1. Consumer markets: individuals and households that buy goods and services for personal consumption. 2. Business markets: buy goods and services for further processing or for use in their production process. 3. Reseller markets: buy goods and services to resell at a profit. 4. Government markets: composed of government agencies that buy goods and services to produce public services. 5. International markets: buyers in other countries, including consumers, producers, resellers, and governments.  Assignments, Resources Use Additional Project 2 and 3 here Use Outside Example 1 here

p. 74

PPT 3-13

THE MACROENVIRONMENT

Chapter Objective 2

PPT 3-14

Demographic Environment

p. 74 Key Term: Demography

is the study of human populations in terms of size, density, location, age, gender, race, occupation, and p. 75 other statistics. Ad: Sony Changes in the world demographic environment have major implications for business. Demography

Thus, marketers keep close track of demographic trends and developments in their markets, both at home and abroad. p. 74 Figure 3.2: Major Changing Age Structure of the Population Forces in the The U.S. population is currently about 313 million and may Company’s Macroenvironment reach almost 364 million by the year 2030. PPT 3-15 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 25 percent of the p. 74 population, spend about $2 trillion annually, and hold 80 Key Term: Baby Boomer percent of the nation’s financial assets. As they reach their peak earning and spending years, boomers will continue to constitute a lucrative market for p. 70 many products and services. Ad: ElderTreks It would be a mistake to think of older boomers as phasing out or slowing down. Today’s boomers think “young” no matter how old they are.  Assignments, Resources Use Real Marketing 3.1 here Use Small Group Assignment 1 here PPT 3-16

Generation X. The baby boom was followed by a “birth dearth,” creating another generation of 49 million people born between 1965 and 1976.

p. 77 Key Term: Generation X

Author Douglas Coupland calls them Generation X. Others call them the “baby busters.” p. 72 Ad: Dairy Queen Increasing parental divorce rates and higher employment for their mothers made them the first generation of latchkey kids. The GenXers developed a more cautious economic outlook, and are a more skeptical bunch. PPT 3-17

Millennials (also called Generation Y or the “echo” p. 78 boomers). Born between 1977 and 2000, these children of Key Term: the baby boomers number 83 million or more. Millennials (Generation Y) This group includes several age cohorts:  Tweens (age 10–12) p. 73  Teens (age 13–18) Ad: Keds  Young adults (age 19–33) Millennials are fluent in and comfortable with digital technology. It is a way for life for them.

PPT 3-18

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.  Assignments, Resources Use Individual Assignment 1 here Use Think-Pair-Share 1 here Use Web Resources 2, 3, 4 here

p. 79

The Changing American Family The “traditional household” consists of a husband, wife, and children (and sometimes grandparents).

PPT 3-19

In the United States:  

Married couples with children make up only 20 percent of the households; Married couples without children make up 29

 

percent; Single parents comprise 17 percent. Nonfamily households make up 34 percent.

Both husband and wife work in 59 percent of all marriedcouple families.  Assignments, Resources Use Additional Project 4 here Use Think-Pair-Share 2 here PPT 3-20

Geographic Shifts in Population

p. 79

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. PPT 3-21

A Better-Educated, More White-Collar, More Professional Population The U.S. population is becoming better educated. In 2010, 87 percent of the U.S. population over age 25 had completed high school, and 30 percent had completed college. Between 2010 and 2020, of 30 detailed occupations projected to have the fastest employment growth, 17 require some type of postsecondary education.

PPT 3-22

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 65 percent white, with around 16 percent Hispanic and 13 percent African-American. The Asian-American population now totals just under 5 percent of the population.

Ad: Grind

By 2050, Hispanics will grow to around 30 percent, p. 81 African-Americans will remain at about 13 percent, and Ad: Samsung Asians will increase to 8 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 $790 billion. Another attractive segment is the 54 million adults with disabilities, representing more than $220 billion in annual spending power.

 Assignments, Resources Use Think-Pair-Share 3 here Use Discussion Question 2 here Use Outside Example 2 here...