Chapter 3 The Marketing Environment and Marketing Ethics

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Chapter 3 The Marketing Environment and
Marketing Ethics
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External Marketing Environment
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Marketing-Oriented Values
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The Poverty of Time
A lack of time to do anything but work, commute
to work, handle family situations, do housework,
shop, eat, sleep...
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Role of Families Women

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

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Age Groups Generation Y

• Born between 1979 and 1994
• Size creates immense marketing impact
• Respond to ads differently

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Age Groups Generation X

• Born between 1965 and 1978
• Savvy and cynical consumers
• Indulge themselves with meals/alcohol, clothing,
  and electronics

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Age Groups Baby Boomers

• Born between 1946 and 1964
• Cherish youth, convenience, and individuality
• Individualism has led to a personalized economy

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Age Groups Older Consumers

• Age 50 plus
• Healthier, wealthier, better educated
• Considerable purchasing power
• Market potential not fully tapped

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Location Americans on the Move

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

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Growing Ethnic Markets

• U.S. population is becoming a multicultural
  society and workforce
• Trend in U.S. is toward greater multiculturalism

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U.S. Multicultural Makeup
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Rising Incomes

• 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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Technological Resource Factors

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

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Regulatory Agencies
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Global Competition

• 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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Ethical Decision Making
Social Consensus
Extent of Problems
Top Management Actions
Potential Consequences
Probability of Harm
Number Affected
Time Until Consequences
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Corporate Social Responsibility
Philanthropic Be a good citizen.
Ethical Do what is right.
Legal Obey the Law.
Economic Be profitable.
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Approaches to Ethics
Ethical Behavior
Rewards
Punishment
Agency Judicial Penalties
Consumer Complaints Boycotts
Consumer Response Bonding
Do the Right Thing
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• Strategic Philanthropy
• Home Depot - Team Depot -- trains and places
  employees as volunteers with local
  youth-enrichment, home-renovation and
  environmental programs.
• Avon - Breast Cancer Awareness Crusade that
  after six years has raised more than 32 million
  for women's health programs.
• Lens Crafters' "Gift of Sight," or Wal-Mart's
  "Good Works," and Taco Bell's "Teen Supreme, are
  creating programs that have their own names and
  brand and images and logos. They become
  integrated with the company. Companies truly
  have to stand for something -- and do it with
  integrity and credibility.
• Corporate contributions to "cause programs" now
  exceed 700 million annually.
• From Don Oldenburg, Washington Post Staff Writer,
  Wednesday, May 5, 1999 Page C04

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Roper Poll After price and quality, one-third
of Americans consider a company's responsible
business practices the most important factor in
deciding whether or not to buy a brand. Indeed,
social responsibility was more influential than
advertising.
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Roper Poll

• More likely to purchase product associated
  with a cause they care about (78).
• Likely to switch brands (66).
• Likely switch retailers (62).
• Pay more for a product (54).
• Pay five percent more (30).
• Pay 10 percent more (24).
• Consumers could name a company they deemed
  least socially responsible (18). Topping the
  list were Exxon, Dow and General Electric.

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Strategic Value of Corporate Citizenship
Walker Research
Brand Loyalty
Company Reputation
Societal Value
Economic Value
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• Strategic Value of Corporate Citizenship
  Walker Research
• 56 saw support of philanthropy as positive
• 9 saw support of philanthropy as negative
• Ratings of Industries that Overall Support of
  the Community

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Do Consumers Really Care About Business
Ethics? Examples Infant Formula, Outsourcing
production to a country with very poor human
rights records The Costs Getting caught,
Nestles, Sears, Beechnut Creyer Ross, Journal
of Consumer Marketing
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• Do Consumers Really Care About Business Ethics?
• Study Results
• Ethics is important to Consumers
• Ethical behavior is expected
• Willing to pay more for products from ethically
  responsible firms
• Willing to buy from unethical companies, but
  only at lower prices
• Creyer Ross, Journal of Consumer Marketing

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Corruption Vs. Investment Growth
Also see http//www.transparency.de/
Singapore
Ireland
Switzlnd Greece France
Mexico France
USA Zaire Zimbabwe
Netherlands Haiti
Britain Ghana
Angola
Investment as of GDP Low
High
High Corruption Level
Low
Washington Post