So, you want to develop a marketing strategy, but don’t know where to start. A good place is with an environmental scan that looks at the environment surrounding your firm. The external marketing environment contains: customers (cultural and social changes), competitors, technological changes, political and regulatory changes, and economic changes. Today, I’d like to look at customer elements in the marketing environment. Here are some opportunities waiting in your environment.
1. Demographic Changes
Demographics include all those descriptors of people, like age, income, gender, race, etc. Some interesting changes in this aspect of the environment are:
Aging of consumers in most of the developed world
As the baby boomers become senior citizens, the scales are tipping toward older consumers. But, today’s senior citizens aren’t what you might expect. As a group, they are healthier, wealthier, more independent than previous groups of senior citizens. They’re not sitting on a rocking chair in some senior citizen center. They’re traveling (the number 1 activity for seniors). They’re more like to listen to the Greatful Dead than Lawrence Welk.
Opportunities include developing products designed for the specific needs of older consumers. For instance, they tend to have dry hair, so developing a product that caters to this is a good opportunity. Since they travel a lot, putting together tour groups of seniors are a good opportunity. One of our clients puts together military historical tours that focus on WWII and Korean battlefields and increasingly ones in Vietnam. Many of these tours are comprised of seniors who served during these wars (and most of these are now seniors). Politicians realize this, that’s why they enact more legislation to beef up social security than education.
Vast changes are occurring in this area. One of the biggest is the increasing affluence of women. While the average women still earns less then a man, this gap is closing. This is becoming especially visible in relationships where wives now out-earn their husbands in nearly 30% of relationships. Especially in African American households, where the number is much closer to 50%. With economic downturns disproportionally affecting white men, this will likely continue at least until employment begins to recover. This gives women more economic power, meaning they now make decisions, like buying a car, which were historically made by men. I recently bought a car and the salesperson spent the entire time talking to my boyfriend about the car and answering his questions. He was really shocked when the 2 of them agreed on a price and I casually said NO. We had to renegotiate and I got an even better deal.
Another gender issue is the one of same sex couples. This also creates opportunities. For instance, I recently saw a commercial for KY directed at gay couples — talk about catering to your heavy half! My hat is off to them for their superb recognition of a great marketing opportunity and having the guts to go for it.
- Other changes include decreased family size, increased influence of children in a household, geographic shifts to the south and east, etc.
This means marketing opportunities for things like smaller package sizes, more marketing to younger children (as well as developing products designed especially for them), and distribution changes to new population centers.
2. Value Changes
What consumers think is important is also changing. The importance of family life is surprising many firms who now find workers less willing to relocate (their spouse may be working and their kids like the current school and friends), accept overtime (although the economic conditions have moderated this somewhat), or take on additional responsibilities than their Gen X and Baby Boomer predecessors.
Today’s consumers are also not joiners and more likely to find a night at home in front of the TV more appealing than playing on a softball league, singing in the church choir, or volunteering at the local soup kitchen. Robert Putnam wrote a great book called Bowling Alone about this decline in community which likely underscores the rise of social media. This created the opportunity for leveraging these social networks to market businesses.
3. Racial Changes
The US, always a melting pot of peoples from many nations, has become an good Irish Stew of cultures committed to maintaining their cultural identity rather than disappearing into the sameness of a single culture as did immigrants in the past. This brings both challenges and opportunities to businesses and complexity to the American Marketplace.
Increasingly, other countries that had been comprised primarily of a single ethnic strain are also seeing increased cultural diversity. This is especially true in the EU, where movement within the block is seamless. This can be challenging in cultures inexperienced in handling this diversity.
Tomorrow, I’ll discuss other elements affecting a businesses external marketing environment.