Mankiw - Principles of Macroeconomics - Ch03 P P T BasicPresentation Transcript
MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2008-2009 Social Responsibility, Ethics, and the Marketing Environment 3 CHAPTER
Learning Outcomes Discuss corporate social responsibility Describe the role of ethics and ethical decisions in business Discuss the external environment of marketing, and explain how it affects a firm LO 1 LO 2 LO 3
Learning Outcomes Describe the social factors that affect marketing Explain the importance to marketing managers of current demographic trends Explain the importance to marketing managers of multiculturalism and growing ethnic markets LO 4 LO 5 LO 6
Learning Outcomes Identify consumer and market reactions to the state of the economy Identify the impact of technology on a firm Discuss the political and legal environment of marketing Explain the basics of foreign and domestic competition LO 7 LO 8 LO 9 LO 10
Corporate Social Responsibility Discuss corporate social responsibility LO 1
Corporate Social Responsibility LO 1 Sustainability The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time.
REVIEW LEARNING OUTCOME LO 1 Corporate Social Responsibility Ethical Do what is right. Legal Obey the Law. Economic Be profitable. Philanthropic Be a good citizen.
Ethical Behavior in Business Describe the role of ethics and ethical decisions in business LO 2
Ethical Behavior in Business LO 2 Ethics Morals The moral principles or values that generally govern the conduct of an individual. The rules people develop as a result of cultural values and norms.
Ethical Development Levels LO 2 Preconventional Morality Conventional Morality Postconventional Morality More Mature More Childlike
Based on what will be punished or rewarded
Self-centered, calculating, selfish
Moves toward the expectations of society
Concerned over legality and the opinion of others
Concern about how they judge themselves
Concern if it is right in the long run
Ethical Decision Making LO 2 Influential Factors Extent of Problems Top Management Actions Potential Consequences Social Consensus Probability of Harm Time Until Consequences Number Affected
Code of Ethics LO 2 Code of Ethics A guideline to help marketing managers and other employees make better decisions. http://www.ethicsweb.ca Online
Creating Ethical Guidelines
Helps identify acceptable business practices
Helps control behavior internally
Avoids confusion in decision making
Facilitates discussion about right and wrong
Ethical Norms and Values for Marketers LO 2
The External Marketing Environment Discuss the external environment of marketing, and explain how it affects a firm LO 3
External Marketing Environment LO 3 Demographics Social Change Economic Conditions Political & Legal Factors Technology Competition Environmental Scanning Target Market External Environment (uncontrollable) Ever-Changing Marketplace Product Distribution Promotion Price Internal (within the organization) Marketing mix
Target Market LO 3 Target Market A defined group most likely to buy a firm’s product.
Social Factors Describe the social factors that affect marketing LO 4
Social Factors LO 4 Values Attitudes Lifestyle
Social Factors LO 4 Social Factors Influence: Products purchased Prices paid for products Effectiveness of promotions How, where, and when people purchase
Social Factors LO 4 Core American Values Self-Sufficiency Upward Mobility Work Ethic Conformity
The Influence of Values on Buying Habits LO 4 Ranked Characteristics of Product Quality Reliability Durability Easy maintenance Ease of use Trusted brand name Low price
Component Lifestyles LO 4 Component Lifestyles The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.
Role of Families and Working Women
Growth of dual-income families results in increased purchase power
Approximately 60% of work-age females are in the workforce
Women expect different things in life
purchase bulk of technology products
do most of the grocery shopping
second largest group of home buyers after couples
Single households outnumber married households with kids
REVIEW LEARNING OUTCOME LO 4 Social Factors that Affect Marketing
Demographic Factors Explain the importance to marketing managers of current demographic trends LO 5
Demographic Factors LO 5 Demography The study of people’s vital statistics, such as their age, race and ethnicity, and location.
Tweens LO 5
Pre- and early adolescents, age 8 to 14
Population of 29 million
Annual purchasing power of $39 billion
View TV ads as “just advertising”
Emerging as “the richest generation” and the “most influential generation in history”
Born between 1979 and 1994
Population of 60 million
Purchasing power of $200 billion annually
Researchers have found Gen Yers to be:
“ Street Smart”
Word of mouth marketing is
LO 5 Online http://www.mountaindew.com http://www.northface.com
Born between 1965 and 1978
Population of 40 million
Savvy and cynical consumers
Time is at a premium, and outsourcing is utilized
Entering their money-making years
Born between 1946 and 1964
Population of 77 million—the largest demographic segment
$1 trillion in spending power for people aged 50 to 60
Income will continue to grow as they keep working
REVIEW LEARNING OUTCOME LO 5 Current Demographic Trends Age Tweens 8 to 14 yrs 29 million Gen Y 1979-1994 60 million Gen X 1965-1978 40 million Baby Boom 1946-1964 77 million
Growing Ethnic Markets Explain the importance to marketing managers of multiculturalism and growing ethnic markets LO 6
Growing Ethnic Markets LO 6
Spending power of ethnic markets by 2011:
Hispanics: $1.2 trillion
African Americans: $921 billion
Asian Americans: $526 billion
Diversity can result in bottom-line benefits to companies.
Marketing to Hispanic Americans LO 6
The population’s diversity creates challenges for targeting this group.
Hispanics tend to be brand loyal, but are not aware of many U.S. brands.
Nearly half of adult U.S. Hispanics have home Internet access.
“ [With ethnic marketing] you're going to get more share of the heart, more share of the mind, and ultimately, more share of the wallet.”
About one in three U.S. residents is a minority, representing over 100.7 million people.
7 states more than tripled their Hispanic population between 1990 and 2000: Alabama, Arkansas, Georgia, North Carolina, South Carolina, Tennessee, and Nevada.
Twenty percent of babies born in the United States are Latino.
LO 6 Beyond the Book Why Multicultural Marketing? SOURCE: Mike Robinson, CEO LaVerdad Marketing & Media, http://www.laverdadmarketing.com/la_casa.htm ; Lisa Biank Fasig, "An Expanding Business for an Expanding Market," Business Courier of Cincinnati , September 7, 2007
Marketing to African Americans LO 6
Many firms are creating products for the African American market.
Promotional dollars and media choices directed toward African Americans continue to increase.
Marketing to Asian Americans LO 6
Younger, better educated, and have highest average income of all groups
Many products have been developed for Asian American market.
Cultural diversity within the Asian American market complicates promotional efforts.
REVIEW LEARNING OUTCOME LO 6 Multiculturalism and Growing Ethnic Markets
Economic Factors Identify consumer and marketer reactions to the state of the economy LO 7
Economic Factors LO 7 Distribution of Consumer Income Inflation Recession
Median U.S. household income in 2007 was $45,000
Incomes have risen at a slow pace.
Education is the primary determinant of earning potential.
Consumers are strapped for cash.
Consumers’ Incomes LO 7
Women bring in half of the household income.
Women control 51.3 percent of the private wealth in the U.S.
Women control 80 percent of household spending.
Women are now the primary buyers in male-dominated categories:
68% of new cars
66% of computers
60% of home improvements
53% of investments
51% of consumer electronics
The Financial Power of Women LO 7
Purchasing Power LO 7 Purchasing Power A comparison of the relative cost of a set standard of goods and services in different geographic areas.
Inflation LO 7 Inflation A measure of the decrease in the value of the money, expressed as the percentage reduction in value since the previous year.
Recession LO 7 Recession A period of economic activity characterized by negative growth, which reduces demand for goods and services.
Improve existing products and introduce new ones
Maintain and expand customer services
Emphasize top-of-the-line products and promote product value
Recession Marketing Strategies LO 7
Technological Factors Identify the impact of technology on a firm LO 8
Research LO 8 Basic Research Applied Research Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon. An attempt to develop new or improved products
U.S. excels at basic and applied research.
Many firms use the market concept to guide research.
New technology internally creates a long-term competitive advantage.
Creates more efficient operation or better products
May render existing products obsolete
Technological Factors LO 8
Innovation is becoming a global process.
New technologies create new opportunities
RSS (Really Simple Syndication)
Technological Factors LO 8
REVIEW LEARNING OUTCOME LO 8 Impact of Technology on a Firm Basic Research Marketing Mix Applied Research Technology Advances
Political and Legal Factors Discuss the political and legal environment of marketing LO 9
LO 9 Regulatory Agencies Consumer Product Safety Commission Federal Trade Commission Food & Drug Administration Protects consumer safety in and around their homes Prevents unfair methods of competition in commerce Enforces safety regulations for food and drug products http://www.ftc.gov Online
LO 9 Powers of the FTC Cease-and-Desist Order Consent Decree Affirmative Disclosure Corrective Advertising Restitution Counteradvertising
LO 9 Consumer Privacy
Health Insurance Portability and Accountability Act (HIPPA)
California’s Notice of Security Breach Law
REVIEW LEARNING OUTCOME LO 9 Political and Legal Environment of Marketing 3.3 3.4
Competitive Factors Explain the basics of foreign and domestic competition LO 10
Competitive Factors LO 10
How many competitors?
How big are competitors?
How interdependent is the industry?
Competition for Market Share and Profits
LO 10 Global Competition
Firms must work harder to maintain profits and market share.
More foreign firms are entering U.S. market.
Foreign firms in U.S. now compete on product quality.
REVIEW LEARNING OUTCOME LO 10 Political and Legal Environment Mature Industries Slow Growth / No Growth Highly Competitive Marketplace Can only increase market share by taking it from a competitor.