The Marketing Environment, Ethics, and Social Responsibility

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Chapter 3

• The Marketing Environment, Ethics, and Social
  Responsibility

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Environmental Scanning

• the process of collecting info about the external
  mkt environment in order to id interpret
  potential trends

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Competition in a Competitive Environment

• 1. direct competition between marketers of
  similar products
• ie Huggies vs. Pampers
• 2. marketers of products that can be substituted
  for each other
• ie bus vs airplane

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• 3. Competition for consumer dollars
• product can be similar or dissimilar, all firms
  compete for part of consumer dollars
• ie car purchase vs. lawn service

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Competitive Strategy

• 1. Should we compete?
• decide based on resources, objectives
  profitability
• 2. If so, in what markets should we compete?
• allocate resources to areas of greatest
  opportunity (target market)
• 3. How should we compete?
• Price, Quality, etc.

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The Political-Legal Environment

• laws that govern business activity Table 2.1
  Pg. 49
• FTC false/misleading advertising
• What happens if firms dont comply??

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The Economic Environment
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5 Factors

• 1. BUSINESS CYLES
• prosperity
• marketers expand product lines, raise prices,
  etc.
• recession
• marketers lower prices,eliminate marginal
  products, etc. (6 months)
• depression
• recovery - consumer ability to buy is up - but
  confidence is not

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• 2. INFLATION
• rising price level that results in reduced
  consumer buying power
• 3. UNEMPLOYMENT
• rises during recessions, lowers during prosperity
  recovery periods

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• 4. RESOURCE AVAILABILITY
• Limited resources
• DEMARKETING - try to reduce consumer demand
• - ie utility companies

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• 5. INCOME
• marketers study income stats trends to
  estimate market potential
• interested in discretionary income

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THE TECHNOLOGICAL ENVIRONMENT

• Can create an entire new industry, not just new
  products. What are some examples??

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The Social-Cultural Environment

• relate btw marketing society and its culture
• marketers must be sensitive to changes in values
  demographics
• Ex. Low-fat food

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Criticisms of Competitive Marketing System

• 1. Costs too high
• 2. Marketing system is inefficient
• 3. Marketers guilty of collusion price fixing
• 4. product quality service are poor

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• 5. consumers get incomplete, false, or
  misleading information
• 6. marketing system has produced health safety
  hazards
• 7. unwanted/unnecessary products are promoted to
  those who need them least

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MARKETING ETHICS

• AREAS OF CONCERN
• 1. Marketing Research- invasion of privacy 2.
  Product Strategy Ethics
• - misleading packaging
• - odd sizing of products
• - bottles w/ concave bottoms
• 3. Distribution Strategy Ethics
• - should products in marginally profitable
  outlets be kept because no alternative source of
  supply?

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• 4. Promotional Strategy Ethics
• gives rise to majority of ethical questions
• gifts bribes common enticements
• 5. Pricing Ethics
• unethical price behavior is usually illegal

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• AMA Code of Ethics

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SOCIAL RESPONSIBILITY

• acceptance of obligation to consider profit,
  consumer satisfaction, societal well-being of
  equal value in evaluating firm performance