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    Identifying & Understanding Trends in Marketing Environment

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    Identifying and Understanding Trends in the Marketing Environment

    Consumer behavior is influenced by both internal and external factors. Internal factors, also called the personal factors, are things like motivation, learning, and perception. External, or social, factors include things like social norms, family roles, and cultural values. Trends in the external environment can have major impact on consumer choices and preferences. It is important for marketing managers to be aware of such trends. How can managers learn about such trends? Let us explore the Web site of a company that conducts national surveys and publishes reports on such trends.

    Harris Interactive frequently publishes several survey findings that can be of interest to marketers. Let us examine three such surveys. First, take a look at a survey done on March 6, about the Obesity Epidemic in America. This study finds that among people over 25, 80 percent are overweight. This proportion has been on a steady increase since 1983 (when it was 58 percent). The proportion of obese people was 71 percent just a few years ago, in 1995. Interestingly, 60 percent of people surveyed said they wanted to lose weight.

    Another survey done by Harris Poll focuses on whom Americans trust. This survey presents data on which professions are considered most trustworthy to Americans. The survey indicates that Americans trust priests and other clergymen the most (90%), followed by teachers (88%), doctors (84%), and police officers (78%). Among the least trusted professions were trade union leaders (37%), members of Congress (42%), business leaders (43%), and journalists (49%).

    A third survey conducted by Harris Interactive focuses on Americans' leisure time activities. This survey asks people to name their favorite leisure-time activities and how much time they allow for their leisure. The most popular leisure-time activity is reading (28%), followed by watching TV (20%), spending time with family and kids (12%), fishing (12%), and gardening (10%). The popularity of these activities has stayed fairly consistent over the years. The survey also found that Americans spend 50 hours per week on their work. In the early 1970s, this number used to be just 41 hours a week. Some other relatively popular pastime activities included swimming (8%), computer activities (7%), and going to the movies (7%).

    After reviewing the three surveys mentioned above, answer the following questions.

    1. Given the trend in obesity among American consumers, which industries stand to benefit the most? Why?
    2. How would you use the information on whom Americans trust for marketing purposes?
    3. How can marketers use information on the leisure-time activities of Americans?

    Forecasting: Seeking Financial Altitude in a Cloudy Sky

    LEAD STORY-DATELINE: The Australian Financial Review, May 17, 2002.
    Qantas has a lot riding on remaining dominant and profitable in the Australian
    domestic market for air travel and freight, as well as remaining profitable
    on its overseas routes-particularly the "Kangaroo" route to and from
    the United Kingdom. It has reported expansion plans involving $A13 billion that
    it intends to spend over a ten-year period on a range of upgrades to planes
    and lounge facilities, as well as on new aircraft.
    The marketing environment for airlines is volatile at the best of times, and
    from money-man Warren Buffet's (Berkshire Hathaway) viewpoint, nobody ever made
    money from investing in an airline over the long term. However, Qantas CEO Geoff
    Dixon aims to prove this wrong. How can this be done in such a volatile market?
    How can Qantas continue to generate revenue and earnings equal to or greater than
    those in 2000, 2001, and as forecast for 2002?
    The domestic market is relatively stable since the final demise of Ansett Airlines
    in April 2002. The new competitor, Virgin Blue, is a single-class operator and
    as anxious as Qantas to keep the public flying with realistically low pricing,
    but also wants to ensure profitability and ultimately, survival. However, Virgin
    Blue is not backward in making its views heard by the Australian Competition
    and Consumer Commission (ACCC) when it believes that its larger competitor has
    overstepped the (legal) mark, and possibly engaged in unfair practices (under
    the Trade Practices Act) that might hurt its market position and financial position.
    The international market is far more volatile, particularly since the terrorist
    activities of September 11, 2001. Qantas and its part-owner British Airways
    (BA) have maintained a strong alliance in the face of turmoil in the aviation
    industry generally. While BA has become cash strapped, Qantas has remained cash
    positive and profitable. How has this been done? Qantas's strategy is to remain
    flexible-not only by ensuring that its fleet can operate as a single-class carrier
    or be quickly converted to a mix of business and economy class, but also by
    cutting costs. More importantly it plans to ensure that its non-airline businesses
    stay profitable. These businesses accounted for 30 percent of the company's
    profits in the six months to December 2001, and include Qantas Flight Catering
    Ltd, Qantas Holidays, Qantas Defence Systems, Australian Air Express, Qantas
    Business Travel and also includes its frequent flyer programs and co-branded
    credit card operations.
    It can be seen from the Qantas company structure that it has remained an integrated
    airline, while many of its international rivals have sold off such operations
    when seeking capital to either build their airline business, or to stay profitable,
    or simply to remain airborne.
    In this section, we consider questions concerning strategy development and
    demand forecasting in volatile marketing environments:

    1.Provide a definition of market demand.
    2.How are market demand, market potential and sales forecasting related to each other?
    3.The fertility rate in Australia is declining and immigration levels are
    not yet set at levels that might lead to population growth (at the time of
    writing). Might this influence the revenue and earnings that Qantas could
    achieve in the future?
    4.How might Qantas employ such a tool as the Ansoff product/market expansion
    grid in developing its growth strategies? (Click here for more details about the grid.)
    ? Describe how to position products and services compared to the competition.
    ? Discuss the implications of the societal marketing concept.

    America is a fat nation in which almost 2/3rds of all Americans are overweight. This national weight problem is causing a variety of severe health problems in both adults and children. For example, four percent of adolescents now have Type II diabetes (which typically never effects youths).

    Among the reasons for this problem are the decline of the family dinner, the popularity of computers/videogames, increased technology (reducing movement), increased food processing that adds sugar (sugar is the number one food additive which is now included in foods such as bread, lunchmeat, canned vegetables, and mayonnaise), and consumers eating out more. Whatever the reason, Americans are now eating 500 more calories a day now than they were back in 1984.

    Several actions of marketers are contributing to this problem. First, many fast food restaurants now offer super-size portions. McDonald's original meal of a 12 ounce Coke, small fries and a hamburger provided 590 calories while their supersize Extra Value Meal of a Quarter Pounder with Cheese, supersize fries and drink is a 1,550 calories. Restaurants have found that its more profitable to make larger portions. By bundling meals, restaurants sell more and consumers feel they are getting a greater value. Second, junk food is now sold everywhere, particularly in schools. Third, food companies spend tremendous amounts on advertising, $1.54 billion annually promoting prepared, processed, and convenience foods.

    Discuss some of the ethical issues brought up by this article. How about the consumer's responsibility?
    Spake, A.(2002, August 19). A Fat Nation.U.S.News & World Report.
    In your own words, please post a response to the Discussion Board and comment on other postings. You will be graded on the quality of your postings.

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    Solution Preview

    Hi there,

    Q:1. Given the trend in obesity among American consumers, which industries stand to benefit the most? Why?
    A: Since a rather high proportion of people tend to trust doctors, the medical industry would have a lot to gain as obese people would tend to seek out the assistance of a doctor with the goal of helping them to lose weight.
    Q2: How would you use the information on whom Americans trust for marketing purposes?
    A: I would use the information to target people who are interested in seeking medically related ways of reducing their weight. Areas such as prescription medicine or surgeries like stomach stapling would be areas of focus.
    Q3:How can marketers use information on the leisure-time activities of Americans?
    A: Marketers could use this information to better direct their energies. If they know that a certain amount of people spend their leisure time ...