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| The Company's Macro-environment |
Demographic Environment
Demography is the study of human populations
in terms of size, density, location, age, gentler, race, occupation, and other
statistics. The demographic environment is of considerable interest to
marketers because it involves people, and people make up markets. Here, we
discuss the most important demographic characteristics and trends in the
largest world markets.
* Population Size and Growth Trendy
In any geographic market, population size
and growth trends can be used to gau£e its broad potential for a wide range of
goods and services. We often refer to the United States. Japan and Europe as
the 'triad' markets. The European Union (EU),
together with members of the European Free Trade Area (EFTA), has a population of around 370 million. With another 120 million from Eastern Europe and 280 million from the former USSR, the overall European market will be significantly larger than the North America Free Trade Area - the United States, Canada, and Mexico - with a population of 370 million and Japan with 128 million. Marketers also view China, with 1.2 billion people, as a potentially lucrative growth market.2 Population growth trends are important because they can offer marketers an indication of demand for certain goods and services, A 'baby boom' would suggest growing demand for infant foods, nursery appliances, maternity services, baby clothing, toys, and so forth, in the short to medium term, with rising demand for family-size accommodation, larger cars, schools, and educational services over the longer term. Differences in population growth patterns between country markets may also suggest different international marketing opportunities for firms.
Changing Age Structure of a Population
The most noticeable demographic shift in
Europe, the United States, and affluent Asian countries is the changing age
structure of the population. In all three groups, the national populations are
getting older, and the trend is forecast to continue over the next 50 years.
The aging population structure reflects two influences. First, there is a
long-term slowdown in birth rate, so there are fewer young people to pull the
population's average age down. Western European countries, with the exception
of Ireland, rank below the 2.1 children per woman (fertility) level found in
the United States, and well below the 3.3 world average. Italy, reporting 1.3
children per woman, has the lowest fertility level in the world.
Fertility
rates in Japan, Singapore, South Korea, and Hong Kong have declined steadily
over the last two decades and are all below America's 2.1 average. This 'birth-dearth'
linked to smaller family sizes is due to people's desire to improve personal
living standards, women's desire to work outside the home, and widely available
and effective birth control practices. Secondly, as longevity increases, there
are more elderly people (see Figure 4.6) to pull the average age of the
population up. By 2031, 38 percent of the UK population will be over 50 years
old. Compare this with 32 percent in 1991 and only 28 percent in 1951. In
Germany, the balance of people over 65 years of age to persons of working age
(or the dependency ratio) is expected to exceed 1:1 by 2031. Put more
colorfully by the historian and demographer Peter Laslett, 'Europe and the
West are growing older and will never be young again.' The picture is repeated
in developed Asian countries. Tine rapid aging of the Japanese population is
one of the government's biggest long-term worries.3 Further, the demographic
change of longer life is not confined to advanced countries. In Latin America
and most of Asia, the share of over-60s is set to double between now and 2030,
to 14 percent. In China, it will increase from less than 10 percent now to
around 22 percent in 2030. Demographic shifts have important implications for
marketing managers. Marketers thus track demographic trends and move carefully
The Changing Family
The notion
of an ideal family - mum, dad, and two kids - has lately been losing some of its
lusters. People are marrying later and having fewer children. The specific figures
may vary among countries, but the general trend is towards fewer married
couples with children. In fact, couples with no children under 18 now make up a
high proportion of all families. These are worrying trends too for wealthy
Asian countries like Singapore, Japan, and Hong Kong. Also, the number of
working mothers is increasing. Marketers of goods ranging from cars, insurance, and travel to financial services are increasingly directing their advertising
to work women. As a result of the shift in the traditional roles and values
of husbands and wives, with male partners assuming more domestic functions such
as shopping and child care, more food and household appliance marketers are
targeting this group of individuals. Finally, the number of non-family households
is increasing. Many young adults leave home and move into apartments. Other
adults choose to remain single. Still, others are divorced or widowed people
living alone. By the year 2000, one-person/non-family and single-parent
households - the fastest-growing category of households - will represent a
sizeable proportion of all households. In Sweden, for example, one-person
households now account for over 40 percent of all homes. Between 1981 and
1991, there has been an upward trend towards single-person households (see
Figure 4.7). In the United States, figures are comparable, with estimates
putting the number at 47 percent by the year 2000. These groups have their own
special needs. For example, they need smaller apartments, Inexpensive and smaller
appliances, furniture and furnishings, and food that is packaged in smaller
sizes.
• Rising Number of Educated People
As
economies in eastern Europe and Asia develop, we may expect to see more money
spent on education. The proportion of the population that is educated will rise
and the population, as a whole, will become better educated. The rising number
of educated people will increase the demand for quality products, books,
magazines, and travel, In many developed and industrializing countries, the workforce
is also becoming more white collar. The most growth comes in the following
occupational categories: computers, engineering, science, medicine, social
service, buying, selling, secretarial, construction, refrigeration, health
service, personal service, and protection.
• Increasing Diversity
In the 1990s, efforts towards European integration have escalated. The EU now comprises 15 member states - France, Luxembourg, Italy. Germany, with East Germany on unification, Netherlands, Belgium, Denmark, Ireland, United Kingdom, Greece. Spain, Portugal, Sweden, Austria, and Finland. The EC's enlargement program is still high on politicians' agendas. Eastern and Central European countries, including former Soviet bloc states, are seeking to participate in the EU, which, in the longer term, could become a reality. The EU, in its present state, and in a potentially enlarged form, presents huge challenges for domestic and international marketers. In general, marketers operating, in the vastly expanded EU must recognize the great diversity across member Mates. Unification strives to achieve harmonization of rules and regulations, which will affect business practices across the Union. Many marketers believe the single European market will lead to convergence in consumer tastes. Global advertising agencies like Saatchi & Saatchi and Young and Rubicam were strong supporters of the idea of the "Euro con sinner'. However, consumer needs, values, beliefs, habits, and lifestyles differ across individual country markets, just as spending power and consumption patterns are likely to vary. Businesses will do well to identify national and regional differences and to develop appropriate marketing strategies that take on board this diversity. Where there are European consumers who display similar cultural values and tastes for particular goods and services, then pan-European strategies may be more cost-effective. For example, the internationalism of snob items, such as Rolex watches or Cartier jewelry, which appeal to a small number of like-minded consumers, or high-fashion purchases like Swatch watches and Benetton clothes, which pander to the younger generation of dedicated fashion followers, lend themselves to pan-European marketing or advertising. In most markets, however, firms have found that the 'one sight, one sound, one sell' dictum loses out to the more effective strategy of customization. Even Coca-Cola, the arch exponent of globalism, tailors the marketing of its drinks to suit different markets. Kronenbourg, France's most popular beer, is said to be a mass-market with the eternal images of France, like cafes, boules, and Citroen 2CVs. In the United Kingdom, Kronenbourg is presented as a drink for 'yuppies'. Unilever customizes its advertisements for Impulse, a body spray. In the UK, the handsome young fellow who gets a whiff of Impulse from the woman nearby presents her with a bunch of flowers. In the Italian version, Romeo offers the woman a rose. Whether the Euroconsumer is a myth or reality is widely debated today. Marketers must address a marketing basic: identify consumer needs and respond to them. Converging lifestyles, habits and tastes may often not mean converging needs. Europe remains a potpourri of cultures and systems, which present immense marketing opportunities for sellers. Although social and demographic factors and the marketing strategies of multinational consumer goods companies may combine to make lifestyles of different European (and rising wealthy Asian) nations more alike, diversity will feature just as much as convergence in the new world economy. Companies that overlook diversity in favor of pan-European or .global strategies must carefully develop and execute their standardized approaches
Economic Environment
Markets
require buying power as well as people. The economic environment consists of
factors that affect consumer purchasing power and spending patterns. Marketers
should be aware of the following predominant economic trends.
Income Distribution and Changes in Purchasing Power
Global upheavals in technology and communications over the 1990s brought about a shift in the balance of economic power from the West (mainly North American, Canadian, and Western European nations) towards the rapidly expanding economies of the Asian Pacific Rim. Many of the Asian 'tiger' economies, notably South Korea, Thailand, Malaysia, Indonesia, and Singapore, were enjoying annual growth rates in excess of 7 percent, compared to the 2-3 percent found in western Europe and the USA. Official statistics suggest that, by 2010, purchasing power income per head in countries like Singapore and South Korea will exceed that of the United States. Economic growth projections suggest that Europe will drop down the economic rankings. Assuming annual growth in western Europe and the United States of 2.5 percent, and 6 percent in Asia as a whole, the share of the world gross domestic product (C.DP) taken by Asian developing countries, including China and India, could rise to 28 percent in 2010 from 18 percent in 1990. Western Europe's share will fall to 17 percent from 22 percent, while the United States will drop to 18 percent from 23 percent.7 However, in June 1997, Asia's economic miracle came to an end. Economic and financial turmoil struck some of the fastest-growing countries in the region. The roots of the Asian economic crisis van' from country to country. Generally, the seeds of the trouble lay in headlong economic growth and policies and practices that resulted in over-burdened financial systems. The Asian 'tiger' economies attracted floods of foreign investment which increased land and asset prices. Lending soared. Authorities embarked on huge, often economically questionable, infrastructure projects - new cities, railroads, highways, power stations - which brought little return on investment. The region's currencies were pegged to the US dollar, which had been appreciating in recent years. Country after the country saw their currency depreciate as the crisis unfolded. Moreover, the region's exporters were gradually becoming uncompetitive. Many countries suffered from 'crony capitalism' in which authorities encouraged banks to lend to politically well-connected businesses. Close neighbor, Japan, and the world's second-biggest economy have also become vulnerable to the crisis, as its financial institutions are big lenders to the rest of the region.s Before the Asian financial crisis developed, it had become almost an article of faith that the region would maintain perpetual growth. Business analysts believe that, where authorities are committed to appropriate reforms, recovery will be possible. Meanwhile, authorities must adopt measures to arrest the further decline and to prevent the turmoil from spreading even wider. Although there has been a narrowing of the wealth and living standards gap between the developed western and rising Asian countries in recent decades, the uncertain economic climate in the Asian economies has important implications for international marketers. They must determine how changing incomes affect purchasing power and how they translate into marketing threats and opportunities for the firm. Where consumer purchasing power is reduced, as in countries experiencing economic collapse or in an economic recession, value-far-money becomes a key purchasing criterion. Marketers must pursue vast-based marketing to capture and retain price-conscious customers during lean economic times, unlike boom periods when consumers become literally addicted to personal consumption.''Rather than offering high quality at a high price, or lesser quality at very low prices, marketers have to look for ways to offer the more financially cautious buyers greater value - just the right combination of product quality and good service at a fair price.10 Consumers with the greatest purchasing power are likely to belong to the higher socioeconomic groups, whose rising incomes mean that their spending patterns are 5ess susceptible to economic downturns than lower-income groups. So, marketers must determine a population's income distribution. The upper economic strata of society become primary targets for expensive luxury goods, the middle-income groups are more careful about spending, but can usually afford some luxuries sometimes, while the lower strata will afford only basic food, clothing, and shelter needs. In some countries, an underclass exists - people permanently living on state welfare and/or below the poverty line - which has little purchasing power, often struggling to make even the most basic purchases.
Changing Consumer Spending Patterns
Generally, the total expenditures made by
households tend to van' for
essential categories of goods and services, with food, housing, and
transportation often using up most household income. Marketers also want to
identify how the spending patterns of consumers at different income levels vary.
Some of these differences were noted over a century ago by Ernst Engel, who
studied how people shifted their spending as their income rose. He found that
as family income rises, the percentage spent on food declines, the percentage
spent on housing remains constant (except for such utilities as gas.
electricity, and public services, which decrease), and both the percentage spent
on other categories and that devoted to savings increase. Engel's laws have
generally been supported by later studies.
Natural Environment
The natural environment involves the
natural resources that are needed as inputs by marketers or that are affected
by marketing activities. Environmental concerns have grown steadily during the
past two decades. Protection of the natural environment will remain a crucial
worldwide issue facing businesses and the public. In many cities around the
world, air and water pollution have reached dangerous levels. Concern continues
to mount about the depletion of the earth's ozone layer and the resulting
'greenhouse effect', dangerous warming of the earth. And many of us fear that
we will soon be buried in our own rubbish. Marketers should be aware of four
trends in the natural environment,
• Shortages of Raw Materials
Air and water may seem to be infinite
resources, but some groups sec long-run dangers. They warn of the potential
dangers that propellants used in aerosol cans pose to the ozone layer. Water
shortage is already a big problem in some parts of the world. Renewable
resources, such as forests and food, also have to be used wisely. Companies in
the forestry business are required to reforest timberlands in order to protect
the soil and to ensure enough wood supplies to meet future demand. Food supply
can be a critical problem because more and more of our limited farmable land is
being developed for urban areas. Non-renewable resources, such as oil, coal, and
various minerals, pose a serious problem. Firms making products that require
these increasingly scarce resources face large cost increases, even if the
materials do remain available. They may not find it easy to pass these costs on
to the consumer. However, firms engaged in research and development and in
exploration can help by developing new sources and materials.
• Increased Cost of Energy
One non-renewable resource - oil - has
created the most serious problem for future economic growth. The large
industrial economies of the world depend heavily on oil. and until economical
energy substitutes can be developed, the oil will continue to dominate the world
political and economic picture. Big increases in the price of oil during the
1970s, and dramatic events like the 1991 Gulf War that affect oil availability,
have spurred the search for alternative forms of energy.
Many companies are searching for practical ways to harness solar, nuclear, wind, and other forms of energy. In fact, hundreds of firms already offer products that use solar energy for heating homes and other uses. Others are directing their research and development efforts to produce high-energy-efficient technologies to meet customers' needs. For example, the tire company Michelin recently introduced its energy low-resistance tires that are said to offer a 5 percent reduction in fuel consumption. Carmakers Ford, Volkswagen, Opel, and Peugeot-Citroen have all produced a new generation of sophisticated compact cars whose small dimensions and low weight make them the front-runners in the race towards the environmentalists' 'year-2000 holy grail" - fuel consumption of just 3 liters per 100km.1
Increased Pollution
The industry has been largely blamed for
damaging the quality of the natural environment. The 'green' movement draws
attention to industry's 'dirty work': the disposal of chemical and nuclear
wastes, the dangerous mercury levels in the ocean, the number of chemical
pollutants in the soil and food supply, and the littering of the environment
with non-biodegradable bottles, plastics, and other packaging materials. Many
companies, especially those at the 'grubbier' ends of manufacturing, often
complain about the cost of fulfilling their obligations to 'clean up'
regulations or to produce new greener technologies. On the other hand, more
alert managers have adapted quickly to rising public environmental concerns,
which have created marketing opportunities for firms ). Many firms are responding to public environmental concerns with more
ecologically sensitive goods, recyclable or biodegradable packaging, improved
pollution controls, and more energy-efficient operations. Niche green markets,
where environmentally sensitive consumers are prepared to pay a premium price
for green benefits, have emerged in sectors ranging from cosmetics, toiletries, and detergents to passenger cars. However, most consumers worldwide are more
likely to make trade-offs between green advantages and product quality and performance
benefits in their purchasing decision. So, although environmental pressures
upon businesses in the decade ahead are expected to escalate, firms must seek
to balance both the ecological and performance benefit expectations of the mass
of consumers.! -
Government Intervention in Natural Resource Management
In most countries, the industry has been pressured rather than persuaded to 'go green. Environmental legislation has toughened up in recent years and businesses can expect this to continue in the foreseeable future. The recession in leading world economies over the early 1990s, however, forced governments to look at the potential of voluntary agreements with industry. The idea is to help industry meet environmental standards cost-effectively A successful case in Holland's National Environmental Policy Plan (NEPP), which was first introduced in J 989 and set tight targets for pollution reduction. Some industries agreed to tougher pollution controls in return for greater government flexibility over their implementation. Although firms knew that failure to co-operate meant harsher laws would follow, the NEPP did provide a channel for government-industry dialogue and cooperation. Detailed plans were agreed with sectors accounting for 60- 70 percent of Holland's environmental pollution. Deals with oil refineries in Rotterdam helped to cut smog and sulfur dioxide emissions. Agreements with packaging firms led to a decline in the volume of municipal waste in 1992, the first time since 1945. Ammonia output also declined sharply,u In most developed western nations, well-organized sectors, such as oils, chemicals, pharmaceutical^, and food, are more likely to reach common agreements with government agencies and their plans for environmental control. The joh, many argue, is still incomplete. Smaller firms and the least organized sector - households - are generally a long way away from signing up to total 'greenery'. For businesses and industries, environmental issues and government intervention are unlikely to vanish. Clever marketers should remain alert and proactive in the search for new green solutions to meet the world's environmental and natural resource dilemmas. Instead of opposing regulation, marketers should help develop solutions to the material and energy problems facing the world.
Technological Environment
The technological environment is perhaps
the most dramatic force now shaping our destiny. Technology has released such
wonders as penicillin, organ transplants, and notebook computers. It has also
released such horrors as the nuclear bomb, nerve gas, and machine gun, and
such mixed blessings as cars, televisions, and credit cards. Our attitude
towards technology depends on whether we are more impressed with its wonders or
its blunders. Every new technology replaces an older technology. Transistors
decimated the vacuum-tube industry, xerography killed the carbon-paper
business, ears and roads hurt the railways, and compact discs hurt vinyl
records. When old industries fought or ignored new technologies, their
businesses declined. New technologies create new markets and opportunities. The
marketer should watch the following trends in technology.
Fast Pace of Technological Change
Many of today's common products were not
available a hundred years ago: televisions, home freezers, automatic
dishwashers, electronic computers, contraceptives, earth satellites, personal
computers, compact disc players, videocassette recorders, facsimile machines,
mobile phones. The list is unending! Companies that fail to anticipate and keep
up with technological change soon find their products outdated. But keeping
pace with technological change is becoming more challenging for firms today.
Technology life cycles are getting shorter. Take the typewriter. The
first-generation modern mechanical typewriter dominated the market for 25 years.
Subsequent generations had shorter lives - 15 years for electromechanical
models, 7 years for electronic versions, and 5 years for Tor first-generation
microprocessor-based ones. Other examples of fast technological change are
found. The average life of some computer software products, for example, is now
well under one year. Firms must track technological trends and determine
whether or not these changes will affect their products' continued ability to
fulfill customers' needs.
Technologies arising in unrelated
industries can also affect the firm's fortunes. The mechanical watch industry
was overtaken by manufacturers of electronic components seeking new
applications and growth opportunities for their quartz technology. Businesses
must assiduously monitor their technological environment to avoid missing new
products and market opportunities.
• High R&D Budgets
Technology and innovations require heavy
investments in research and development. It is not uncommon for pharmaceutical
companies, for example, to spend £150-200 million to develop a new drug. High R
& I) spending is also a feature of many industries including cars,
communications, computers, aerospace, engineering, entertainment, and consumer
electronics. Some companies spend billions on R & D each year. A recent
study showed that the international top 200 companies devoted an average of 4,85
percent of 1993 sales to R & D, General Motors of the United States was
the world's biggest spender with a budget of more than $4 billion (£2.6
billion), followed by German engineering group DaimlerBenz, Ford Motor of the
United States and Japan's Hitachi.14 In recent years, there has been a marked
increase in collaborative technological research efforts between western
governments and industries. In Europe, this good spawned subsidized
programs, such as Esprit. Eureka and Jessi, and in the USA schemes such as
Sematech and MCC. These programs stemmed from two fun concerns; first, the
soaring cost of R & D and the difficulty, even for big companies, of
mastering a wide range of technologies; and second, the increasing
international competition, mainly from Japan, in electronics and related
industries. There are mixed views on the success of these programs, although
collaboration has helped break down barriers between rival firms and stimulated
the dissemination of know-how.
• Concentration on Minor Improvements
As a result of the high cost of developing and introducing new technologies, many companies are tinkering - making minor product improvements - instead of gambling on substantial innovations. The high costs and risks of commercialization failure make firms take this cautious approach to their R & D investment. Most companies are content to put their money into copying competitors' products, making minor feature and style improvements, or offering simple extensions of current brands. Thus much research is in danger of being defensive rather than offensive.
• Increased Regulation
As products become more complex, people
need to know that they are safe. Thus, government agencies investigate and ban
potentially unsafe products. In the EU and America, complex regulations exist
for testing new drugs. The US Federal Food and Drug Administration, for
example, is notorious for its strict enforcement of drug testing and safety rules.
Statutory and industry regulatory bodies exist to set safety standards for
consumer products and penalize companies that fail to meet them. Such
regulations have resulted in much higher research costs and in longer times
between new-product ideas and their introductions. Marketers should be aware of
these regulations when seeking and developing new products. Marketers need to
understand the changing technological environment and the ways that new
technologies can serve the customer and human needs. They need to work closely with
R & D people to encourage more market-oriented research. They must also be
alert to the possible negative aspects of any innovation that might harm users
or arouse opposition.
Political Environment
Marketing decisions are strongly affected by
developments in the political environment. The political environment consists
of laws, government agencies, and pressure groups that influence and limit
various organizations and individuals in a given society.
• Legislation Regulating Business
Even the most liberal advocates of
free-market economies agree that the system works best with at least some
regulation. Well-conceived regulation can encourage competition and ensure fair
markets for goods and services. Thus governments develop public policy to guide
commerce - sets of laws and regulations that limit business for the good of
society as a whole. Almost ever;' marketing activity is subject to a wide range
of laws and regulations. Understanding the public policy implications of particular marketing activity is not a simple matter. First, there are many
laws created at different levels: for example, in the EU, business operators
are subject to European Commission, individual member state and specific local
regulations; in the USA, laws are created at the federal, state, and local
levels, and these regulations often overlap. Second, the regulations are
constantly changing - what was allowed last year may now be prohibited. In the
single European market, deregulation and ongoing moves towards harmonization
are expected to take time, creating a state of flux, which challenges and
confuses both domestic and international marketers. They must therefore work
hard to keep up with these changes in the regulations and [heir
interpretations. In many developed economies, legislation affecting business
has increased steadily over the years. This legislation has been enacted for a
number of reasons.
The first
is to protect companies from each other. Although business executives may
praise competition, they sometimes try to neutralize it when it threatens them.
So laws are passed to define and prevent unfair competition. Anti-trust
agencies monopolies and mergers commissions exist to enforce these laws.
The second purpose of government regulation is to protect consumers from unfair
business practices. Some firms, if left alone, would make shoddy products, tell
lies in their advertising, and deceive consumers through their packaging and
pricing. Unfair business practices have been defined and are enforced by
various agencies. The third purpose of government regulation is to protect the
interests of society against unrestrained business behavior. Profitable
business activity does not always create a better quality of life. Regulation
arises to ensure that firms take responsibility for the social costs of their
production or products. New laws and their enforcement are likely to continue
or increase. Business executives must watch these developments when planning
their products and marketing programs. Marketers need to know about the main
laws protecting competition, consumers, and society. International marketers
should additionally be aware of regional, country, and local laws that affect
their international marketing activity.
• Growth of Public Interest Groups
The number
and power of public interest groups have increased during the past two decades.
In Chapter 2 we discussed a broad range of societal marketing issues. The
pioneering efforts of Ralph Nader's Public Citizen group in the United States
raised the importance of the role of public interest groups as watchdogs on
consumer interests and lifted consumerism into a powerful social force.
Consumerism has spilled over to countries in western Europe and other
developed market economies such as Australia. Hundreds of other consumer
interest groups, private and governmental, operate at all levels - regional,
national, state/county, and local levels. Other groups that marketers need to
consider are those seeking to protect the environment and to advance the rights
of various groups such as women, children, ethnic minorities, senior citizens, and the handicapped. As we saw in the case of Nutricia's failed biotechnology
project, companies cannot afford to ignore the views of powerful public
interest groups.
• Increased Emphasis on Ethics and Socially Responsible Actions
Written regulations cannot possibly cover all potential marketing abuses, and existing laws are often difficult to enforce. However, beyond written laws and regulations, business is also governed by social codes and rules of professional ethics. Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply to 'do the right thing'. These socially responsible firms actively seek out ways to protect the long-run interests of their consumers and the environment. Increased concerns about the environment have created fresh interest in the issues of ethics and social responsibility. Almost every aspect of marketing involves such issues. Unfortunately, because these issues usually involve conflicting interests, well-meaning people can disagree honestly about the right course of action in a particular situation. Thus many industrial and professional trade associations have suggested codes of ethics, and many companies are now developing policies and guidelines to deal with complex social responsibility issues.
Cultural Environment
The cultural environment is made up of
institutions and other forces that affect society's basic values, perceptions,
preferences, and behaviors. People grow up in a particular society that shapes
their basic beliefs and values. They absorb a worldview that defines their
relationships with others. The following cultural characteristics can affect
marketing decision-making. Marketers must be aware of these cultural influences
and how they vary across societies within the markets served by the firm.
• Persistence of Cultural Values
People in a given society hold many
beliefs and values. Their core beliefs and values have a high degree of
persistence. For example, most of us believe in working, getting married,
giving to charity, and being honest. These beliefs shape more specific attitudes
and behaviors found in everyday life. Core beliefs and values are passed on
from parents to children and are reinforced by schools, religious groups,
businesses, and the government. Secondary beliefs and values are more open to change.
Believing in marriage is a core belief; believing that people should get
married early in life is a secondary belief. Marketers have some chance of
changing secondary values, but little chance of changing core values. For
example, family-planning marketers could argue more effectively that people
should get married later than that they should not get married at all.
• Shifts in. Secondary Cultural Values
Although core values are fairly persistent, cultural swings do take place. Consider the impact of popular music groups, movie personalities, and other celebrities on young people's hairstyling, clothing, and sexual norms. Marketers want to predict cultural shifts in order to spot new opportunities or threats. Such information helps marketers cater to trends with appropriate products and communication appeals. The principal cultural values of a society are expressed in people's views of themselves and others, as well as in their views of organizations, society, nature, and the universe. PEOPLE'S VIEWS OF THEMSELVES. People vary in their emphasis on serving themselves versus serving others. Some people seek personal pleasure, wanting fun, change and escape. Others seek self-realization through religion, recreation, or the avid pursuit of careers or other life goals. People use products, brands, and services as a means of self-expression and buy products and services that match their views of themselves. In the last decade or so, personal ambition and materialism increased dramatically, with significant marketing implications. In a 'me-society', people buy their 'dream cars' and take their 'dream vacations'. They spend more time in outdoor health activities G°ggin& tennis, etc.), in thought, and on arts and crafts. The leisure industry (camping, skiing, boating, arts and crafts, and sports) faces good growth prospects in a society where people seek self-fulfillment.
PEOPLE'S VIEWS OF OTHERS.
More recently, observers have noted a
shift from a 'me-society' to a 'we-society', in which more people want to be
with and serve others. Flashy spending and self-indulgence appear to be on the
way out, whereas saving, family concerns, and helping others are on the rise. A
recent survey showed that more people are becoming involved in charity,
volunteer work, and social service activities. This suggests a bright future for
'social support' products and services that improve direct communication
between people, such as health clubs, family vacations, and games. It also
suggests a growing market for 'social substitutes' - things like VCRs and
computers that allow people who are alone to feel that they are not.
PEOPLE'S VIEWS ON ORGANIZATIONS.
People van' in their attitudes towards
corporations, government agencies, trade unions, universities, and other
organizations. By and large, people are willing to work for big organizations
and expect them, in turn, to carry out society's work. There has been a decline
in organizational loyalty, however. People are giving a little less to their
organizations and are trusting them less. This trend suggests that
organizations need to find new ways to win consumer confidence. They need to
review their advertising communications to make sure their messages are honest.
Also, they need to review their various activities to make sure that they are
coming across as 'good corporate citizens. More companies are linking
themselves to worthwhile causes, measuring their images with important publics, and using public relations to build more positive images.
PEOPLE'S VIEWS OK SOCIETY.
People vary in their attitudes toward
their society - from patriots who defend it, to reformers who want to change
it, and malcontents who want to leave it. People's orientation to their society
influences their consumption patterns, levels of savings, and attitudes toward
the marketplace. In the affluent and industrializing Asian nations, consumers
aspire to achieve the high living standards and lifestyles of people in the
more advanced western countries. The display of conspicuous consumption and
fondness for expensive western brands - the common label for achievement and westernization
- are highly acceptable behavior. Consumer patriotism, for example, is not an
issue, since locally made goods are often viewed as inferior or less desirable
than foreign imported brands. By contrast, in the western developed countries,
the late 1980s and early 1990s saw an increase in consumer patriotism. European
consumers reckoned that sticking to locally produced goods would save and
protect jobs. Many US companies also responded to American patriotism with
'made in America' themes and flag-waving promotions, such as Chevrolet is 'the
heartbeat of America', Black & Decker's flag-like symbol on its tools, and
the textile industry's 'Grafted with Pride in the USA' advertising campaign,
which insisted that 'made in the USA matters."
PEOPLE'S VIEWS OF NATURE.
People vary in their attitudes towards the
natural world. Some feel ruled by it, others feel in harmony with it and still
others seek to master it. A long-term trend has been people's growing mastery
over nature through technology and the belief that nature is bountiful. More
recently, however, people have recognized that nature is finite and fragile -
that it can be destroyed or spoiled by human activities. Love of nature is
leading to more camping, hiking, boating, fishing, and other outdoor activities. The business has responded by offering more hiking gear, camping equipment, better
insect repellents, and other products for nature enthusiasts. Tour operators are
offering more tours to wilderness areas. Food producers have found growing
markets for 'natural' products like natural cereal, natural ice cream,
organically farmed produce, and a variety of health foods. Marketing
communicators are using appealing natural backgrounds in advertising their
products.
PEOPLF/S VIEWS OF THE UNIVERSE.
Finally, people vary in their beliefs about the origin of the universe and its place in it. While the practice of religion remains strong in many parts of the world, religious conviction and practice have been dropping off through the years in certain countries, notably in the United States and Europe where, for example, church attendance has fallen gradually. As people lose their religious orientation, they seek goods and experiences with more immediate satisfaction. During the 1980s, people increasingly measured success in terms of career achievement, wealth, and worldly possessions. Some futurists, however, have noted an emerging renewal of interest in religion, perhaps as part of a broader search for a new inner purpose. Starting in the 1990s, they believe, people are moving away from materialism and dog-eat-dog ambition to seek more permanent values and a more certain grasp of right and wrong. The 'new realists', found mainly in the developed western markets, reflect a move away from overt consumerism. However, in many markets such as India, China, and south-east Asia, society's value systems place great importance on economic achievement and material possession. The values of these 'enthusiastic materialists' are also shared by the developing markets of Europe, such as Turkey, and some Latin American countries.
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