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©2003 South-Western Chapter 2 Version 3e1 chapter The Marketing Environment and Marketing Ethics 2...
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Chapter 2 Version 3e 1 ©2003 South-Western chapter The Marketing Environment The Marketing Environment and Marketing Ethics and Marketing Ethics 2 Prepared by Prepared by Deborah Baker Deborah Baker Texas Christian University Texas Christian University
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Transcript of ©2003 South-Western Chapter 2 Version 3e1 chapter The Marketing Environment and Marketing Ethics 2...
Chapter 2 Version 3e 1©2003 South-Western
chapter
The Marketing Environment The Marketing Environment and Marketing Ethicsand Marketing Ethics
22
Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 2 Version 3e 2©2003 South-Western
chapter
Learning ObjectivesLearning Objectives
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1.1. Discuss the external environment of Discuss the external environment of marketing, and explain how it affects a firm.marketing, and explain how it affects a firm.
2. Describe the social factors that affect 2. Describe the social factors that affect marketing.marketing.
3. Explain the importance to marketing 3. Explain the importance to marketing managers of current demographic trends.managers of current demographic trends.
Chapter 2 Version 3e 3©2003 South-Western
chapter
Learning Objectives (continued)Learning Objectives (continued)
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4. Explain the importance to marketing 4. Explain the importance to marketing managers of multiculturalism and growing managers of multiculturalism and growing ethnic markets.ethnic markets.
5. Identify consumer and marketer reactions 5. Identify consumer and marketer reactions to the state of the economy.to the state of the economy.
6. Identify the impact of technology on a firm.6. Identify the impact of technology on a firm.
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chapter
Learning Objectives (continued)Learning Objectives (continued)
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7. Discuss the political and legal 7. Discuss the political and legal environment of marketing.environment of marketing.
8. Explain the basics of foreign and 8. Explain the basics of foreign and domestic competition.domestic competition.
9. Describe the role of ethics and ethical 9. Describe the role of ethics and ethical decisions in business.decisions in business.
10. Discuss corporate social responsibility.10. Discuss corporate social responsibility.
Chapter 2 Version 3e 5©2003 South-Western
Learning Objective Learning Objective 11
Discuss the external environment of marketing,
and explain how it affects a firm.
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Target MarketTarget Market
A defined group most likely
to buy a firm’s product.
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Chapter 2 Version 3e 7©2003 South-Western
External Marketing EnvironmentExternal Marketing Environment11
DemographicsDemographics
SocialChangeSocial
Change
EconomicConditionsEconomicConditions
Political & Legal FactorsPolitical &
Legal Factors
TechnologyTechnology
CompetitionCompetition
EnvironmentalScanning
Target Market
ProductDistributionPromotion
Price
ProductDistributionPromotion
Price
External Environment is not controllable Ever-Changing
Marketplace
Chapter 2 Version 3e 8©2003 South-Western
External Marketing EnvironmentExternal Marketing Environment11
SocialSocial
DemographicDemographic
EconomicEconomic
TechnologicTechnologic
Political and LegalPolitical and Legal
CompetitiveCompetitive
External Environmental
Factors
External Environmental
Factors
Chapter 2 Version 3e 9©2003 South-Western
Learning Objective Learning Objective 22
Describe the social factors Describe the social factors that affect marketing.that affect marketing.
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Social FactorsSocial Factors
ValuesValues
AttitudesAttitudes
LifestyleLifestyle
Social FactorsSocial Factors
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Chapter 2 Version 3e 11©2003 South-Western
Social ValuesSocial Values
ModernismModernism
Cultural CreativityCultural Creativity
TraditionalismTraditionalism
Today’s Today’s Marketing-Marketing-Oriented Oriented
ValuesValues
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Marketing-Oriented ValuesMarketing-Oriented Values
CulturalCreativityCultural
Creativity
TraditionalismTraditionalism
ModernismModernism
Interested in new products and services.
“Heartlanders” with nostalgic views
Place high value on success, materialism, technology
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Chapter 2 Version 3e 13©2003 South-Western
The Poverty of TimeThe Poverty of Time22
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 LifestylesComponent Lifestyles22
The practice of choosing
goods and services that
meet one’s diverse needs
and interests rather than
conforming to a single,
traditional lifestyle.
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Role of Families & WomenRole of Families & Women22
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 Learning Objective
Explain the importanceExplain the importanceto marketing managersto marketing managers
of current demographic trends.of current demographic trends.
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Demographic FactorsDemographic Factors
AgeAge
LocationLocation
EthnicityEthnicity
DemographicsDemographics
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Age Groups: Generation YAge Groups: Generation Y33
Born between 1979 and 1994
Size creates immense marketing impact
Respond to ads differently
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Age Groups: Generation XAge Groups: Generation X33
Born between 1965 and 1978
Savvy and cynical consumers
Indulge themselves with meals/alcohol, clothing, and electronics
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Age Groups: Baby BoomersAge Groups: Baby Boomers33
Born between 1946 and 1964
Cherish youth, convenience, and individuality
Individualism has led to a personalized economy
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Personalized EconomyPersonalized Economy
Delivering goods and
services at a good value
on demand.
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Product Characteristics in a Product Characteristics in a Personalized EconomyPersonalized Economy
CustomizationCustomization
ImmediacyImmediacy
ValueValue
Products are custom designed and marketed to small target markets
Products are delivered at the consumer’s convenience
Businesses must price competitively or create innovative products
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Age Groups: Older ConsumersAge 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 MoveLocation: 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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Chapter 2 Version 3e 25©2003 South-Western
Learning Objective Learning Objective
Explain the importance to Explain the importance to marketing managers marketing managers
of multiculturalism and of multiculturalism and growing ethnic markets.growing ethnic markets.
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Growing Ethnic MarketsGrowing Ethnic Markets
U.S. population is becoming a multicultural society and workforce
Trend in U.S. is toward greater multiculturalism
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MulticulturalismMulticulturalism
When all major ethnic
groups in an area--
such as a city, county, or
census tract--are roughly
represented.
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U.S. Multicultural MakeupU.S. Multicultural Makeup
0%
20%
40%
60%
80%
100%
1999
2023
WhitesAfricanHispanicAsian
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Chapter 2 Version 3e 29©2003 South-Western
Multicultural MarketingMulticultural Marketing
StitchingNiches
StitchingNiches
NicheMarketing
NicheMarketing
Adapting PromotionAdapting Promotion
MarketingStrategies
forMulticultural
Markets
MarketingStrategies
forMulticultural
Markets
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Chapter 2 Version 3e 30©2003 South-Western
Stitching NichesStitching Niches44
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 Learning Objective
Identify consumer and marketer Identify consumer and marketer reactions to the state of the economy.reactions to the state of the economy.
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Economic FactorsEconomic Factors
Distribution of Consumer
Income
Distribution of Consumer
Income
InflationInflation
RecessionRecession
Economic Areas of Concern to
Marketers
Economic Areas of Concern to
Marketers
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Rising IncomesRising 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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InflationInflation
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
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RecessionRecession
Income, production and employment fall
Reduced demand for goods and services
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Recession Marketing StrategiesRecession Marketing Strategies
Improve existing productsImprove existing products
Introduce new productsIntroduce new products
Maintain customer servicesMaintain customer services
Emphasize top-of -the line productsEmphasize top-of -the line products
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Chapter 2 Version 3e 37©2003 South-Western
Learning Objective Learning Objective 66
Identify the impact of technology on a firm.
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Basic ResearchBasic Research66
Pure research that aims to
confirm an existing theory
or to learn more about a
concept phenomenon.
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Applied ResearchApplied Research66
An attempt to develop new
or improved products.
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Technological & Resource FactorsTechnological & 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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Learning Objective Learning Objective
Discuss the political and Discuss the political and legal environment of marketing.legal environment of marketing.
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Chapter 2 Version 3e 42©2003 South-Western
Political and Legal FactorsPolitical and Legal Factors
Consumers
Businesses Society
New Technology
Laws and Regulations Laws and Regulations ProtectProtect
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Federal LegislationFederal Legislation
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 AgenciesRegulatory Agencies
Consumer Product Safety Commission
Federal Trade Commission
Food & Drug Administration
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Chapter 2 Version 3e 45©2003 South-Western
Regulatory AgenciesRegulatory Agencies
Consumer Product Safety Commission
Consumer Product Safety Commission
Federal Trade Commission
Federal Trade Commission
Food & Drug AdministrationFood & Drug
Administration
Protects consumer safety in and around their homes
Prevents unfair methods ofcompetition in commerce
Enforces safety regulations for food and drug products
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Chapter 2 Version 3e 46©2003 South-Western
Learning Objective Learning Objective
Explain the basics of foreign and Explain the basics of foreign and domestic competition.domestic competition.
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Chapter 2 Version 3e 47©2003 South-Western
Competitive FactorsCompetitive Factors88
How many competitors?
How big are competitors?
How interdependent is industry?
ControlControl
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Global CompetitionGlobal 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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Learning Objective Learning Objective
Describe the role of ethics and Describe the role of ethics and ethical decisions in business.ethical decisions in business.
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EthicsEthics
The moral principles or
values that generally govern
the conduct of an individual.
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MoralsMorals
The rules people develop as
a result of cultural values
and norms.
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Ethical Behavior in BusinessEthical Behavior in Business99
Ethical?Ethical? Legal?Legal?
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Ethical Development LevelsEthical Development Levels
PreconventionalMorality
PreconventionalMorality
ConventionalMorality
ConventionalMorality
PostconventionalMorality
PostconventionalMorality
MoreMature
MoreSelfish
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Chapter 2 Version 3e 54©2003 South-Western
Morality and Business EthicsMorality and Business Ethics
PreconventionalMorality
PreconventionalMorality
• Childlike level
• Based on what will be punished or rewarded.
• Self-centered, calculating, selfish.
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Morality and Business EthicsMorality and Business Ethics
ConventionalMorality
ConventionalMorality
• 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 EthicsMorality and Business Ethics
PostconventionalMorality
PostconventionalMorality
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• 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 MakingEthical Decision MakingSocial
ConsensusSocial
ConsensusExtent of ProblemsExtent of Problems
Top Management
Actions
Top Management
ActionsPotential
ConsequencesPotential
Consequences
Probability of Harm
Probability of Harm
Number AffectedNumber Affected
Time Until Consequences
Time Until Consequences
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Code of EthicsCode of Ethics
A guideline to help marketing
managers and other employees
make better decisions.
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Creating Ethical GuidelinesCreating Ethical Guidelines
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 Learning Objective
Discuss corporate social responsibility.Discuss corporate social responsibility.
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Corporate Social ResponsibilityCorporate Social Responsibility
EthicalEthicalDo what is right.Do what is right.
LegalLegalObey the Law.Obey the Law.
EconomicEconomicBe profitable.Be profitable.
PhilanthropicPhilanthropicBe a good citizen.Be a good citizen.
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