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SOCIALLYRESPONSIVE MARKETING

CHAPTER

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THE IMPACT OF MARKETING

Marketing Affects Businesses Marketing is responsible for the activities leading to

the exchange of the business’s products or services for the customer’s money.

Marketing research allows the business to determine customer needs.

Effective marketing helps a business satisfy customer needs and wants.

Marketing helps the business make better decisions about what to sell and how to sell it.

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Children’s Toothpaste

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THE IMPACT OF MARKETING

Marketing Helps People Convenient locations, large selection of products,

multiple methods of payment. Better products at lower prices. Higher sales volume

results in lower per unit costs. Example: The development of computers.

Greater job opportunities. One-third of all jobs are marketing jobs. A Bachelor’s degree in marketing in one of the top 10 degrees in demand by employers.

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THE IMPACT OF MARKETING

Marketing Benefits Society Marketing constantly creates new and better

products. Safer cars, safer products, reduction in pollution, increase in recycling.

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THE IMPACT OF MARKETING

Marketing improves the standard of living because marketing provides an abundance of products and a greater selection of products.

Marketing Benefits Society

Slum in Bangladesh

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Bangladesh Average

income $1,400 per year

2/3’s of population are farmers

Emphasis is on subsistence

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China - fastest growing major economy in the world, but average income is $3,300 per person.

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Per Capita Incomes

Luxembourg - $57,545 United States - $39,751 Bermuda - $36,000 Norway - $37,300 Switzerland – $32,550 Canada - $29,740 Japan – $28,250 Mexico - $8,950

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Extensive marketing provides higher paying jobs.

Marketing improves international trade. International trade could not exist without effective marketing.

Marketing Benefits Society

THE IMPACT OF MARKETING

Frameworks 2.2.2

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Benefits of Marketing

Businesses meet consumer needs Consumers make better decisions Natural resources are used more effectively Standard of living is improved International trade increases

Frameworks 2.2.2

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Common Complaints

Marketing causes unneeded purchases Marketing wastes money Marketing is not always needed

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Do we really need this?

Talking George Bush Action Figure. Press the button on George's back to hear him say 17 phrases in his own voice. Makes a great gift. Some phrases are political, some patriotic, while others show his comedic use (or misuse) of the English language. President George W. Bush doll is 12 inches tall.

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Do we really need this?

www.chiaobama.com

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Total product price (100%)

Prod

uct P

rice

Average cost of all marketing activities (50%)

Average cost of sales and advertising (2–10%)

The Typical Costs of Marketing

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Marketing Solves Problems

Marketing increases public awareness– Green (environmental)

Marketing – consists of marketing activities designed to satisfy customer needs without negatively impacting the environment.

Frameworks 3.1

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Green Marketing Solves Problems

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Marketing Solves Problems

Marketing helps match supply with demandApple’s iPhone 3GS are completely sold out as of Sunday. Half of the Apple stores have already sold out of the white 16GB version, followed by the black 32GB version, which 40 percent of the stores are out of stock of. Last year’s 8GB iPhone 3G is still available everywhere.

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Marketing Solves Problems

Marketing increases public awareness– Green (environmental) Marketing – is also related

to sustainability - as in environmentally sustainable development.

The Energy Star label now appears on 11,000 different items in 38 product categories, from washing machines and light bulbs.

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Marketing Solves Problems

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Social Responsibility

Concern about the consequences of actions on others.

Refers to the duty of a business to contribute to the well being of society.

Ben & Jerry's Homemade, Inc. donates 7.5 percent of its pretax earnings to the disadvantaged and the needy. Frameworks 3.2

Ben & Jerry’s Ice Cream company is well known for its commitment to social responsibility.

22 Frameworks 3.2.1

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Benefits of Social Responsibility

Presentation at Shoney’s by Joe Wilson

Presentation at Western Sizzlin by Niki Jones

Recognition in the community and creating goodwill.

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“This is the house where families meet to continue their lives... to eat and sleep... to find their strengths and dry their tears... to look forward with hope to better years, this is the house that becomes their home... this is the house that love built.

Over 200 Ronald McDonald Houses exist in the United States and around the world. These facilities help families overcome the stresses associated with a child's illness by encouraging supportive interaction with other parents in a comfortable, homelike environment.”

www.ronaldmcdonaldhouseuc.org Frameworks 3.2.1

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Two times a year, McDonald's Restaurants sponsor McTeacher Night. This year's fall event is scheduled for Tuesday evening November 8. Twenty percent of the evening's proceeds will go directly to the band to offset the cost of their spring trip.

Groups from the band will be on hand to perform for customers throughout the evening. McDonald's representative Robin Reeves said, "They will be providing the entertainment for our customer's listening pleasure during the four hour event."       

Customers can drive through or dine in between the hours of 4 p.m. and 8 p.m. to benefit the band. Reeves said, "McDonald's likes to be involved in the community. We are all about supporting Harrison and the area schools. We appreciate the support we get from our customers and this is one way we can do our part to help them."

Donna Braymer www.harrisondailytimes.comFrameworks 3.2.1

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What happens when a business doesn’t practice social responsibility?

Negative publicity can damage the company’s image.

Company profits can be negatively effected.

There could be legal consequences. Watch video from 60 minutes.

Should US businesses send electronic waste to China?

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Consumerism

The organized actions of groups of consumers seeking to increase their influence on business practices.

The societal effort to protect consumer rights by putting legal, moral, and economic pressure on business.

Ralph Nader is often called the father of consumerism. He was the Green Party Nominee for President in 1996. He ran again as a write in candidate in the 2000 Presidential election. Frameworks 3.4

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• The right to adequate and accurate information.

• The right to safe products.

• The right to product choices.

• The right to communicate their opinions to business and government.

The Consumer Bill of Rights

The Consumer Bill of Rights was presented by

President Kennedy in 1960.

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Influencing Business Practices

Using the consumer vote – don’t spend your money on the product if its not what you need or want.

Boycott – an organized effort to influence a company by refusing to purchase its products.

Government regulation.

Frameworks 3.1 & 3.4.1

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Boycott of Aruba

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Boycott Aruba

The consumer boycott of Aruba triggered by the lack of action, or incompetence of Aruban officials, surrounding the disappearance of Natalee Holloway is being countered by Aruba.

Over the past few months, at least one hotel in Aruba has been sold, which indicates that investors saw bargains, probably because soft sales lowered property values. Over the past few months, Aruba has been investing heavily into enticements to lure cruise lines into making Aruba a port of call, which has the effect of bringing in tourism dollars less hotel stays, as those vacationers can sleep in their ship-board rooms. The cruise-lines are bringing people into Aruba who would otherwise not pick Aruba as a primary vacation destination, but will go there if it happens to be one of several ports of call.

Aruba has been hurt by the boycott against them, and while they are working to recover from the boycott, it remains to be seen if the tourism numbers ever return to its former glory.

Frameworks 3.4.1

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Sherman Antitrust Act, 1890

To increase competition among businesses by regulating monopolies

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Food and Drug Act, 1906

To control the content and labeling of food and drug products by forming the Food and Drug Administration (FDA)

The Nutrition Facts label is required by the Food & Drug Administration.

What does the FDA do?

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The FDA conducts inspections of food and drug manufacturing facilities to ensure that we (consumers) receive safe products.

Cheryl Eckard who worked for the drug company GlaxoSmithKline was a whistleblower and alerted the FDA to problems at one of the company’s manufacturing facilities.

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Federal Trade Commission Act, 1914

To form the Federal Trade Commission (FTC) to protect consumer rights

The Federal Trade Commission is shown on the south side of Pennsylvania Avenue between 6th and 7th Streets. The statue alongside the building symbolizes humanity harnessing trade.

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Robinson-Patman Act, 1936

To protect small businesses from unfair pricing practices between manufacturers and large businesses

The Act prohibits selling the same product, under the same circumstances, to different customers at different prices with the intent of harming competition.

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Fair Packaging and Labeling Act, 1966

To require packages to be accurately labeled and fairly represent the contents.

The identity of the product; The name and place of

business of the manufacturer, packer, or distributor; and

The net quantity of contents.

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Consumer Credit Protection Act, 1968

To require disclosure of credit requirements and rates to loan applicants.

Frameworks 3.1

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Consumer Product Safety Act, 1972

To set safety standards and to form the Consumer Product Safety Commission (CPSC)

CPSC Requires Recall of Notebook Computer Batteries Due to Fire Hazard

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Americans with Disabilities Act, 1990

To prohibit discrimination and ensure equal opportunity for persons with disabilities.

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Zero Entry Pool

A zero entry pool allows access for those with disabilities and is required of large public pools under the ADA.

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Telemarketing and Consumer Fraud and Abuse Prevention Act, 1994

To prohibit deceptive telemarketing practices and regulate calls made to consumers’ homes

www.donotcall.gov

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Millennium DigitalCommerce Act, 1999

To regulate the use of electronic contracts and signatures for Internet business transactions

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Gramm-Leach-Bliley Financial Modernization Act, 1999

To limit the sharing of consumer information by requiring financial services companies to inform consumers about how private information is handled

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The Environmental Protection Agency (EPA)

The U.S. Environmental Protection Agency (EPA) is an agency of the federal government of the United States charged to regulate chemicals and protect human health by safeguarding the natural environment: air, water, and land.

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Improving Practices

Ethics – are moral principles or values based on honesty and fairness.

Frameworks 3.1

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Improving Practices

Code of ethics – is a set of standards or rules that guide ethical business behavior.

As a DECA Member:

I will be sincere and honest.

I will accept each task with confidence in my ability to perform my own work at a high standard.

I will strive with the guidance of my family, teachers, advisors, business persons, and my own initiative, to do my best in making my community, state, and nation a better place to live.

I will strive to develop a cooperative attitude and will exercise tact and respect for other individuals.

I will be steadfast in my beliefs and in my responsibilities as a citizen.I will demonstrate good sportsmanship in competition by being modest in victory and gracious in defeat.Frameworks 3.3

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Improving Practices

Self-regulation – taking personal responsibility for actions .

http://arkansas.bbb.org/Find-Business-Reviews/

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Improving Practices

Social action – many business people are concerned about the world in which they live. Many are active in helping solve some of society’s serious problems by investing time and money to help their communities.

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Responsibilities of the Marketer

In product development and management In promotions In distribution In pricing In marketing research

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Responsibilities of the Marketer

Product development and management Disclosing all substantial risks associated with a

product or service Identifying substitutions that change the product

or impact buying decisions Identifying extra cost-added features

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Responsibilities of the Marketer

Promotions Avoiding false and misleading advertising Rejecting high-pressure or misleading sales

tactics and promotions

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Responsibilities of the Marketer

Distribution Not exploiting customers by manipulating the

availability of a product Not using coercion Not exerting undue influence over the

reseller’s choice to handle a product

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Responsibilities of the Marketer

Pricing Not engaging in price fixing Not practicing predatory pricing Disclosing the full price associated with any

purchase

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Responsibilities of the Marketer

Marketing research Prohibiting selling or fundraising disguised as

conducting research Avoiding misrepresentation and omission of

pertinent research data Treating clients and suppliers fairly

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Ethics in Marketing

Responsibility to customers – businesses have a responsibility to ensure the safety of their customers.

ConAgra Foods voluntarily recalled all of its Peanut Butter even though salmonella contamination was not found in the products. (Salmonella was detected in one factory – due to a flood.)

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Ethics in Marketing

Harm and accountability – many unethical business practices hurt consumers and can be illegal.

Bernie Madoff was sentenced to 150 years imprisonment for his part in operating a Ponzi scheme.

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Ponzi Scheme Victims

Kevin Bacon and his wife, Kyra Sedgwick, are victims in the Bernie Madoff $50 billion ponzi scheme.

After reports that the pair lost everything -- minus the land they own and money in their checking accounts -- the rep said: "Please, let's no speculate or rely on hearsay."

Bacon and Sedgwick aren't the only celebs who lost money thanks to Madoff. The Wall Street Journal reports that Steven Spielberg's Wunderkinder Foundation was affected, and producer Jeffrey Katzenberg may have lost "millions."

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What is Ponzi scheme?

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.

The Ponzi scheme usually offers returns that other investments cannot guarantee in order to entice new investors, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going.

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