The Marketing Environment and Marketing Ethics

1
The Marketing Environment and Marketing Ethics
3
chapter
Prepared by Deborah Baker Texas Christian
University
2
Learning Objectives
1. Discuss the external environment of
marketing, and explain how it affects a firm. 2.
Describe the social factors that affect
marketing. 3. Explain the importance to
marketing managers of current demographic trends.
3
chapter
3
Learning Objectives (continued)
4. Explain the importance to marketing managers
of multiculturalism and growing ethnic
markets. 5. Identify consumer and marketer
reactions to the state of the economy. 6.
Identify the impact of technology on a firm.
3
chapter
4
Learning Objectives (continued)
7. Discuss the political and legal environment
of marketing. 8. Explain the basics of foreign
and domestic competition. 9. Describe the
role of ethics and ethical decisions in
business. 10. Discuss corporate social
responsibility.
3
chapter
5
Learning Objective
1
Discuss the external environment of marketing,
and explain how it affects a firm.
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Target Market
1
A defined group most likely to buy a firms
product.
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External Marketing Environment
1
8
External Marketing Environment
1
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Learning Objective
2
Describe the social factors that affect
marketing.
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Social Factors
2
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Social Values
2
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Marketing-Oriented Values
2
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The Poverty of Time
2
A lack of time to do anything but work, commute
to work, handle family situations, do housework,
shop, eat, sleep...
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Component Lifestyles
2
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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Role of Families Women
2

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

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Learning Objective
3
Explain the importance to marketing managers of
current demographic trends.
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Demographic Factors
3
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Age Groups Generation Y
3

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

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Age Groups Generation X
3

• 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
3

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

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Personalized Economy
3
Delivering goods and services at a good value on
demand.
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Product Characteristics in a Personalized Economy
3
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Age Groups Older Consumers
3

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

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Location Americans on the Move
3

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

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Learning Objective
4
Explain the importance to marketing managers of
multiculturalism and growing ethnic markets.
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Growing Ethnic Markets
4

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

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Multiculturalism
4
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
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Multicultural Marketing
4
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Stitching Niches
4
A strategy for multicultural marketing that
combines ethnic, age, income, and
lifestyle markets, on some common basis, to form
a large market.
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Learning Objective
5
Identify consumer and marketer reactions to the
state of the economy.
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Economic Factors
5
Economic Areas of Concern to Marketers
Distribution of Consumer Income
Recession
Inflation
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Rising Incomes
5

• 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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Inflation
5

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

Prices
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Recession
5

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

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Recession Marketing Strategies
5

• Improve existing products
• Introduce new products
• Maintain customer services
• Emphasize top-of -the line products

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Learning Objective
6
Identify the impact of technology on a firm.
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Basic Research
6
Pure research that aims to confirm an existing
theory or to learn more about a concept
phenomenon.
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Applied Research
6
An attempt to develop new or improved products.
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Technological Resource Factors
6

• 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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Learning Objective
7
Discuss the political and legal environment of
marketing.
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Political and Legal Factors
7
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Federal Legislation
7

• 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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Regulatory Agencies
7
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Regulatory Agencies
7
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Learning Objective
8
Explain the basics of foreign and domestic
competition.
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Competitive Factors
8

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

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Global Competition
8

• 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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Learning Objective
9
Describe the role of ethics and ethical
decisions in business.
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Ethics
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The moral principles or values that generally
govern the conduct of an individual.
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Morals
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The rules people develop as a result of cultural
values and norms.
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Ethical Behavior in Business
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Ethical Development Levels
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Morality and Business Ethics
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Preconventional Morality

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

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Morality and Business Ethics
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Conventional Morality

• Moves toward the expectations of society
• Concerned over legality and the opinion of
  others.
• When in Rome, do as the Romans

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Morality and Business Ethics
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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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Ethical Decision Making
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Social Consensus
Extent of Problems
Top Management Actions
Potential Consequences
Probability of Harm
Number Affected
Time Until Consequences
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Code of Ethics
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A guideline to help marketing managers and other
employees make better decisions.
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Creating Ethical Guidelines
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• Help identify acceptable business practices
• Help control behavior internally
• Reduce confusion in decision making
• Facilitate discussion about right and wrong

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Learning Objective
10
Discuss corporate social responsibility.
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Corporate Social Responsibility
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