Page 93 - Foundations of Marketing

60 Part 1 | Strategic Marketing and Its Environment

Figure 3.1 National Customer Satisfaction Benchmark

77.0
76.5
76.0
75.5
75.0
Baseline ‘94
74.5
National Score 73.5
74.0
73.0
72.5
72.0
71.5
71.0
70.5
70.0 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4 Q1Q2Q3 Q4
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Year

Source: Data from American Customer Satisfaction Index, “National Quarterly Benchmarks,” www.theacsi.org/national-economic-indicator/national-quarterly-
benchmarks (accessed May 2013).

and promotion efforts. In times of recession or depression, when buying power decreases,
many customers may become more price conscious and seek more basic, functional products.
For example, when buying power decreased during the most recent recession, department
store sales dropped. Consumers began shopping at off-price retailers such as T.J.Maxx and
Ross. These stores attracted middle-income consumers because they sell brand-name goods
at a discount. Even during the recovery cycle, many consumers opted to continue shopping at
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off-price retailers to take advantage of the lower prices.
During economic downturns, a company should focus its efforts on determining precisely
what functions buyers want and ensure that these functions are available in its product offer-
ings. Promotional efforts should emphasize value and utility. Some firms make the mistake
of drastically reducing their marketing efforts during a recession, harming their ability to
compete. The United States and most of the world experienced a period of prosperity in
2004–2007. During this time, household net worth increased by almost 6 percent a year, with
rapidly increasing home values, low unemployment, low interest rates, and expanding credit
availability. The decision by the government and financial institutions to grant subprime loans
(higher-interest loans to people with poor credit ratings) triggered the default of these loans.
In 2008, the United States experienced an economic downturn due to higher energy prices,
falling home values, increasing unemployment, the financial crisis in the banking industry,
and fluctuating currency values. That recession was the longest since the Great Depression of
the 1930s.
Political Forces

Political, legal, and regulatory forces of the marketing environment are closely interrelated.
Legislation is enacted; legal decisions are interpreted by courts; and regulatory agencies are
created and operated, for the most part, by elected or appointed officials. Legislation and regu-
lations (or their lack) reflect the current political outlook. For instance, after the financial cri-
sis caused a worldwide recession, the government passed the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010. This act was created to increase accountability and
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transparency in the financial industry. The legislation established a new Consumer Financial

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