The Marketing Environment and Marketing Ethics

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The Marketing Environment and Marketing Ethics
Chapter
2
Prepared by Deborah Baker Texas Christian
University Revised by R Baur Agricultural
Technical Institute
2
Chapter One Review
1. Definition of The Term Marketing 2. Five
Marketing Management Philosophies 3. Implementing
The Marketing Concept 4. The Marketing Process
And The Variables That Make Up The Marketing
Mix 5. Reasons For Studying Marketing
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chapter
3
BUSINESS MARKETING CONCEPTS

• CH 1 OVERVIEW OF MARKETING
• CH 2 THE MARKETING ENVIROMENT
• CH 3 DEVELOPING A GLOBAL VISION
• CH 4 CONSUMER DECISION MAKING
• CH 5 BUSINESS MARKETING
• CH 6 TARGET MARKETS SEGMENTS
• CH 7 MARKET RESEARCH
• CH 8 PRODUCTS SERVICE CONCEPTS
• CH 9 DEVELOP MANAGE PRODUCTS
• CH 10 MARKETING CHANNELS
• CH 11 RETAILING
• CH 12 MARKETING COM PERS SELLING
• CH 13 ADV, PUBLIC REL, PROMOTION
• CH 15PRICING CONCEPTS

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Chapter 2 Learning Objectives

• Describe the role of ethics and ethical decisions
  in business.
• Discuss corporate social responsibility
• 3.Discuss the external environment of marketing,
  and explain how it affects a firm.
• 4. Describe the social factors that affect
  marketing.
• 5. Explain the importance to marketing managers
  of current demographic trends.

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chapter
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Chapter 2 Learning Objectives
6.. Explain the importance to marketing managers
of multiculturalism and growing ethnic markets
7. Identify consumer and marketer reactions to
the state of the economy. 8. Identify the impact
of technology on firm 9. Discuss the political
and legal environment of marketing. 10. Explain
the basics of foreign and domestic competition.
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chapter
6
Learning Objective
50
Describe the role of ethics and ethical
decisions in business.
1
C. Demographics
B. Social Change
A. Ethics
Product Place Promotion Price
D. Economic Conditions
G. Competition
Target Market
F. Political Legal Factors
E. Technology
Environmental Scanning
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A1. Ethics
Learning Objective
Describe The Role Of Ethics Ethical Decisions
In Business.
30
1
The moral principles or values that generally
govern the conduct of an individual.
Is there a difference between something
beinglegal and something being ethical?
Is illegal to put these in an arrangement?
NO
Is unethical to put these in an arrangement?
NO
Unless..
YES
Unprofessional?
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Learning Objective
Describe The Role Of Ethics Ethical Decisions
In Business.
30
1
Laws
Societal Prescriptions
Ethics that have been encoded into enforceable
law.
B2. Morals
The rules people develop as a result of cultural
values and norms.
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G3. Ethical Development Levels
Learning Objective
30
Describe the role of ethics and ethical
decisions in business.
1
1. Preconventional Morality

• Childlike level
• Based on what will be punished or rewarded.
• Self-centered, calculating, selfish.

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Ethical Development Levels
2. Conventional Morality
Learning Objective
30
Describe the role of ethics and ethical
decisions in business.
1
Moves toward the expectations of society
Concerned over legality opinion of others.
Peer Pressure
When in Rome, do as the Romans
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G3. Ethical Development Levels
Learning Objective
31
Describe the role of ethics and ethical
decisions in business.
1
Postconventional Morality

• Morality of the mature adult
• Concern about how they judge themselves.
• Concern if it is right in the long run.

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G4. Ethical Decision Making
Learning Objective
31
Describe the role of ethics and ethical
decisions in business.
1
Potential Consequences
Top Management Actions
Extent of Problems
Social Consensus
Number Affected
Time Until Consequences
Probability of Harm
Collateral Damage in War
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G5. Code of Ethics
Learning Objective
32
Describe the role of ethics and ethical
decisions in business.
1
A guideline to help marketing managers and other
employees make better decisions.
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G6. Creating Ethical Guidelines
Learning Objective
32
Describe The Role Of Ethics Ethical Decisions
In Business.
1

• Help identify acceptable business practices
• Help control behavior internally
• Reduce confusion in decision making
• Facilitate discussion about right wrong

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Learning Objective
Discuss Corporate Social Responsibility.
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2
Bad Examples
Good Examples
Philanthropic Be a good citizen.
Gates Foundation
Enron
Ethical Do what is right.
Long Horn
Enron
Legal Obey the Law.
Economic Be profitable.
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Target Market
30
Learning Objective
Ext Environment Of Marketing, How It Affects A
Firm.
3
A defined group most likely to buy a firms
product.
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The External Marketing Environment
Learning Objective
34
Ext Environment Of Marketing, How It Affects A
Firm.
3
B. Demographics
A. Social Change
C. Economic Conditions
Product Place Promotion Price
D. Technology
G. Ethics
Target Market
F. Competition
E. Political Legal Factors
Environmental Scanning
18
Learning Objective
36
Describe The Social Factors That Affect
Marketing.
4
A. SOCIAL CHANGE
Product Place Promotion Price
Target Market
Environmental Scanning
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A1. Marketing-Oriented Values
Learning Objective
36
Describe The Social Factors That Affect
Marketing.
4
Self Sufficiency
Stand on your own feet
Education and hard work is the path to success
Upward Mobility
Work Ethic
Pull your weight
Conformity
Dont expect special treatment
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A2. The Poverty of Time
Learning Objective
37
Describe The Social Factors That Affect
Marketing.
4
A lack of time to do anything but work, commute
to work, handle family situations, do housework,
shop, eat, sleep...
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A3. Component Lifestyles
Learning Objective
Describe The Social Factors That Affect
Marketing.
37
4
The practice of choosing goods and services that
meet ones diverse needs and interests rather
than conforming to a single, traditional
lifestyle.
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A4. Role of Families Women
Learning Objective
38
Describe The Social Factors That Affect
Marketing.
4

• 58 of all females are in the workforce
• Rising purchasing power from dual-income families
  
• Change of traditional purchasing roles
• Use of catalogues and internet

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Learning Objective
Importance To Marketing Managers Of Current
Demographic Trends.
39
5
B. DEMOGRAPHICS
1. Age
2. Location
A. Social Change
Product Place Promotion Price
3. Ethnicity
Target Market
Environmental Scanning
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B1a. Generation Y (Millennium Gen)
Importance To Marketing Managers Of Current
Demographic Trends.
Learning Objective
41
5

• Born between 1979 and 1994

• Sons Daughters of Baby Boomers

• 60 million 3 times the no. of Gen X

• Size creates immense marketing impact

• 1/3 not Caucasian ¼ Single Parent Home

• ¾ have working mothers

• Respond to ads differently

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B1b. Generation X
Importance To Marketing Managers Of Current
Demographic Trends.
Learning Objective
41
5

• Born between 1965 and 1978

• 20 million

• Savvy and cynical consumers

• Indulge themselves with meals/alcohol, clothing,
  and electronics

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B1c. Baby Boomers
Importance To Marketing Managers Of Current
Demographic Trends.
Learning Objective
41
5

• Born between 1946 and 1964

• 1 out 3 Americans gt21 are Boomers (72 million)

• Control 70 of the Nations Wealth

• Spend 2 Trillion on Gds Services Per Year

• Care More about Health Fitness Than Others

• Cherish youth, convenience, and individuality

• Individualism has led to a personalized economy

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B1c. Baby Boomers
Importance To Marketing Managers Of Current
Demographic Trends.
Learning Objective
41
5

• Looking for simplicity in the food they buy

• Want nutritional, tasty food with little
  preparation

• Interested in their food how it was produced,
  ie organic and locally grown food

• Interested in the heritage and tradition that
  goes into the product.

• Dairy Herd Management June 05 Pg 34

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Product Character in a Personalized Economy
Importance To Marketing Managers Of Current
Demographic Trends.
Learning Objective
43
5
Customization
Products are custom designed marketed to small
target markets
Ordering Car on Internet
Immediacy
Products are delivered at the consumers
convenience
Digital Photographs
Businesses must competitively price or create
innovative products
Value
Apple Computers
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Product Character in a Personalized Economy
Learning Objective
Importance To Mrkting Mgrs Of Current Demographic
Trends
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5
Customization
Have it Your Way
It will be up in a Minute
Immediacy
Value
Value Meals
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B1d. Older Consumers
Importance To Marketing Managers Of Current
Demographic Trends.
Learning Objective
43
5
Age 50 plus
Healthier, wealthier, better educated
85 in Good Health
Considerable purchasing power
80 of Travel Money Spent by People Over 50
Spent gt800 on toys for grand kids per year
Market potential not fully tapped
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B2. Location Americans on the Move
Importance To Marketing Managers Of Current
Demographic Trends.
Learning Objective
5

• Average U.S. citizen moves every six years
• Immigrants add 10 billion yearly to economy
• Migration is a global phenomenon

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Multiculturalism
Learning Objective
44
Explain Importance Of Growing Ethnic Markets
Multiculturalism.
6

• U.S. population is becoming a multicultural
  society and workforce

When all major ethnic groups in an area--such as
a city, county, or census tract--are
roughlyrepresented.
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U.S. Multicultural Makeup
Learning Objective
46
Explain importance of growing ethnic markets
multiculturalism.
6
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Learning Objective
Identify Consumer And Marketer Reactions To The
State Of The Economy.
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7
B. Demographics
A. Social Change
C. ECONOMIC CONDITIONS
Product Place Promotion Price
Target Market
Environmental Scanning
35
C1. Rising Incomes
Identify Consumer And Marketer Reactions To The
State Of The Economy.
Learning Objective
47
7

• 66 of U.S. households earn middle-class
  income
• Over 10 earn over 75,000, primarilyfrom
  dual-income families
• More discretionary income for high-end goods and
  services

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C2. Inflation
Identify Consumer And Marketer Reactions To The
State Of The Economy.
Learning Objective
48
7
Prices

• Prices rise with no wage increasePurchasing
  Power decreases
• Increase profit margins by increasing efficiency
• Consumers reaction
• Search for lowest prices

Gas
-- Rely on coupons and sales
- The cheapest brand works just as well
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C3. Recession
Identify Consumer And Marketer Reactions To The
State Of The Economy.
Learning Objective
48
7

• Income, production and employment fall
• Reduced demand for goods and services

C3. Recession Marketing Strategies
Improve existing products Introduce new
products Maintain customer services Emphasize
top-of -the line products
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Learning Objective
Identify The Impact Of Technology On A Firm.
8
B. Demographics
A. Social Change
Product Place Promotion Price
C. Economic Conditions
Target Market
D. TECHNOLOGY
Environmental Scanning
39
D1. Basic Research
Learning Objective
49
Identify The Impact Of Technology On A Firm.
8
Pure research that aims to confirm an existing
theory or to learn more about a concept. Expand
Knowledge not solve problems
D2. Applied Research
An attempt to develop new or improved products.
Space Research
Military Research
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D3. Technological Resource Factors
Learning Objective
49
Identify The Impact Of Technology On A Firm.
8

• New technology helps firm cope with other
  environmental factors such as inflation.
• U.S. excels at basic research, but falls short
  at applied research
• Information technology has helped U.S. economic
  growth

Internet Ordering Computers, Cars, Books
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Learning Objective
50
Discuss The Political And Legal Environment Of
Marketing.
9
B. Demographics
A. Social Change
Product Place Promotion Price
C. Economic Conditions
Target Market
D. Technology
E. Political Legal Factors
Environmental Scanning
42
E. Political and Legal Factors
50
Learning Objective
Discuss The Political And Legal Environment Of
Marketing.
9
Society
Businesses
New Technology
Consumers
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E2. Federal Legislation
Learning Objective
52
Discuss The Political And Legal Environment Of
Marketing.
9

• Sherman Act of 1890
• Clayton Act of 1914
• Federal Trade Commission Act of 1914
• Robinson-Patman Act of 1936
• Wheeler-Lea Amendments to the FTC Act of 1938
• Lanhma Act of 1946
• Celler-Kefauver Antimerger Act of 1950
• Hart-Scott-Rodino Act of 1976

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E3. Regulatory Agencies
Learning Objective
52
Discuss The Political And Legal Environment Of
Marketing.
9
Consumer Product Safety Commission
Protects consumer safety in and around their
homes
Recall of unsafe toys
Federal Trade Commission
Prevents unfair methods of competition in commerce
National Do Not Call
Enforces safety regulations for food and drug
products
Food Drug Administration
Pulling unsafe drugs - Vioxx
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Learning Objective
54
Explain The Basics Of Foreign And Domestic
Competition.
10
B. Demographics
A. Social Change
Product Place Promotion Price
C. Economic Conditions
F. Competition
Target Market
D. Technology
E. Political Legal Factors
Environmental Scanning
46
F1. Competitive Factors
Learning Objective
54
10
Explain The Basics Of Foreign And Domestic
Competition.

• How many competitors?
• How big are competitors?
• How interdependent is industry?

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F2. Global Competition
Learning Objective
55
Explain The Basics Of Foreign And Domestic
Competition.
10

• More foreign firms are entering U.S. market
• Foreign firms in U.S. now compete on product
  quality
• Global markets are highly competitive

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NEXT TOPIC
CHAPTER THREE
DEVELOPING A GLOBAL VISION