Ch 03_with_video (1)

Canadian Adaptation prepared byCanadian Adaptation prepared by
Don Hill, Langara CollegeDon Hill, Langara College
Lecture PowerPoint® slides
to accompany
1Copyright © 2012 Nelson Education Limited

Chapter 3: Ethics and the
Marketing Environment
2Copyright © 2012 Nelson Education Limited 2

3
LO1
LO2
LO3
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
Describe the social factors that affect marketing
Copyright © 2012 Nelson Education Limited
LO4
Learning Outcomes

Learning Outcomes
4
Explain the importance to marketing
managers of current demographic trends
Explain the importance to marketing
managers of multiculturalism and growing
ethnic markets
Identify consumer and marketer reactions
to the state of the economy
LO6
LO7
LO5

Learning Outcomes
5
Identify the impact of technology on a firm
Discuss the political and legal environment of
marketing
Explain the basics of foreign and domestic
competition
LO8
LO9
LO10

Corporate Social Responsibility
6
Discuss corporate social
responsibility.
LO1

Sustainability
7
The idea that socially
responsible companies will
outperform their peers by
focusing
on the world’s social
problems, viewing
them as opportunities to build
profits and help the
world at the same time.
Copyright © 2012 Nelson Education LimitedLO1

Review Learning Outcome
8
LO1
Discuss Corporate Social Responsibility
EthicalEthical
Do what is right.Do what is right.
LegalLegal
Obey the Law.Obey the Law.
EconomicEconomic
Be profitable.Be profitable.
PhilanthropicPhilanthropic
Be a good citizen.Be a good citizen.

Green Marketing
9
The development
and marketing of products
designed to minimize negative
effects on the physical
environment or to improve
the environment.
Click

Ethical Behavior
10
Describe the role of ethics and
ethical decisions in business.
LO2

Ethical Behavior
11
EthicsEthics
The moral principles or values
that generally govern the
conduct of an individual.
LO2

Ethical Behavior in Business
12
Morals – The rules people
develop as a
result of cultural values
and norms.
LO2

Ethical Development Levels
13
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
LO2

Ethical Decision Making
14
Influential Factors
Extent of Problems
Top Management
Actions on ethics
Potential Magnitude
of the Consequences
Social Consensus
Probability of Harm
Time Until
Consequences
Number Affected
LO2

Code of Ethics
15
Code of Ethics- A guideline to help
marketing managers and other
employees make better decisions.
LO2

Creating Ethical Guidelines
• Helps identify acceptable business practices
• Helps control behaviour internally
• Avoids confusion in decision making
• Facilitates discussion about right and
wrong
16LO2

Ethics Checklist
17
Exhibit 3.3
LO2

18
Describe the Role of Ethics and Ethical Decisions in
Business
LO3

The External Marketing Environment
19
Discuss the external
environment of marketing,
and explain
how it affects a firm
LO3

Target Market
20
Target market- A defined group
most likely to buy a firm’s
product.

Understanding the External
Environment
21Copyright © 2012 Nelson Education LimitedLO3
Click
Environmental
Scanning
Goal
to Identify Future
Market
Opportunities
And
Threats

22
LO3
DemographicsDemographics
Social
Change
Social
Change
Economic
Conditions
Economic
Conditions
Political &
Legal Factors
Political &
Legal Factors
TechnologyTechnology
CompetitionCompetition
Environmental
Scanning
Target
Market
External Environment
(uncontrollable)
Ever-Changing
Marketplace
Product
Distribution
Promotion
Price
Product
Distribution
Promotion
Price
Internal
(within the
organization)
Marketing mix
External Environment of Marketing

Social Factors
23
Describe the social factors
that affect marketing.
LO4

Social Factors
24
ValuesValues
AttitudesAttitudes
LifestyleLifestyle

Social Factors
25
Self-SufficiencySelf-Sufficiency
Upward MobilityUpward Mobility
Work EthicWork Ethic
ConformityConformity
Basic Canadian Values

Social Factors
ValuesValues Component
Lifestyles
Component
Lifestyles
Changing
Role of
Women
Changing
Role of
Women
Social FactorsSocial Factors

Component Lifestyles
27
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
• The phenomena of working women has had the greatest
effect on marketing than any other social change
• Nearly two-thirds of all women (ages 18-65) are in the
workforce
• Purchasing power from dual-career families
is rising
– Less time for family activities
• Cost is more important to women.
Quality is more important to men.

29
LO2
Social Factors that Affect Marketing

Demographic Factors
30
Explain the importance
to marketing managers of
current demographic trends.
LO3

Demographic Factors
31
Demography- The study of people’s
vital statistics, such as their age,
race and ethnicity, and location.

Demographic Facts

Tweens
Pre- and early adolescents, age 9 to 14
Population of 2.3 million
Purchasing power of $2 billion annually
View TV ads as “just advertising”

Teens
 Population of 3 million in Canada
 Purchasing power of $10 billion annually
 Approximately 70 hours per week tuned in
electronically
 Participate in social networks
 Shopping has become social sport
– Connected

Generation Y
 Born between 1979 and 1994
 Population of 7 million
 Purchasing power of $20 billion annually
 Researchers have found Gen Yers to be:
– Impatient
– Family-oriented
– Inquisitive
– Opinionated
– Diverse
– Time managers
– “Street Smart”
– Connected

Generation X
 Population of 6.7 million
 Savvy and cynical consumers
 More protective and involved with their kids
 Value the importance of education
 Avid buyers of the latest clothes, technology,
and recreational products

Baby Boomers
 Population of 9 million—
the largest demographic segment
 Many Boomers expect to continue working
past 65.
• Account for a significant part of shopping
dollars spent on packaged goods
 Four segments of baby boomers:
“Looking for balance”
“Confident and living well”
“At ease”
“Overwhelmed”

Older Consumers
 Over 65
 Population of 4.7 million
 Wealthier, healthier, and better educated
than earlier generations
 Keep up with the times, definite about wants
and needs, and have unique behaviour
patterns
 Feel that marketers ignore them
 Fastest growing segment

39
LO5
Current Demographic Trends

Growing Ethnic Markets
40
Explain the importance of marketing
managers of
multiculturalism and growing
ethnic markets.
LO6

Visible Minority
41
Persons, other than Aboriginal
peoples, who are non-Caucasian
in race or non-white in colour.

Growing Ethnic Markets
42
 Immigrant’s are the main source of population
growth
 Nearly 250,000 arriving each year
 Three-quarters of the immigrants arriving are
visible minorities
 Currently 16 percent of Canadians are visible
minorities
 Expected to grow to 31 percent by 2031

Visible Minorities in Canada

Ethnic and Cultural Diversity
44
 Multiculturalism: occurs when all major ethnic
groups in an area (city, county, or census
metropolitan area) are roughly equally represented
 Canadian trend is toward greater multiculturalism
 Greatest multiculturalism is in the largest
metropolitan areas

Implications of Multiculturalism
45
• Diversity can result in bottom-line benefits to
companies
• Ethnic markets are not homogeneous
• Many niches requiring micromarketing
strategies
• Growth in Internet usage within ethnic markets
outpaces the general public

46
LO6
Multiculturalism and Growing Ethnic Markets

Economic Factors
47
Identify consumer and
marketer reactions to the
state of the economy.
LO7

Economic Factors
48
Consumer’s
Income
Inflation
Recession

Consumers’ Incomes
• Median Canadian household income
in 2010 was approximately $66,550.
• Incomes have risen at a slow pace.
• New level of affluence cuts across all
household types.
– Not limited to professionals, age or
education

Purchasing Power
50
Purchasing Power- A comparison
of income versus the relative cost
of a set standard of goods and
services in different geographic
areas.

Inflation
51
Inflation- A measure of the decrease
in the value of the money, expressed
as the percentage reduction in value
since the previous year.

Recession
52
Recession- A period of economic
activity characterized by negative
growth which reduces demand
for goods and services.

Recession Marketing Strategies
• Redouble efforts to cut costs
• Lower prices to attract new customers and hold
existing ones

54
LO7
Economic Factors

Technological Factors
55
Identify the impact of a
technology firm.
LO8

Research
56
Basic research – pure research that
aims to confirm an
existing theory
or to learn more about a concept
or phenomenon
Applied research – an attempt to develop
new or improved products
Click
Click
Click

• New technology is a weapon against inflation and recession
• Canada excels at basic research and is improving at applied
research.
• Information technology and the Internet have been driving
increased productivity
• Many firms use the marketing concept to guide research.

58
• New technology creates a long-term competitive
advantage.
• The most innovative firms have an average profit
margin growth of 3 percent higher than the
typical firm.

59
LO8
Impact of Technology on a Firm
Basic
Research
Basic
Research
Marketing
Mix
Marketing
Mix
Applied
Research
Applied
Research
Technology
Advances
Technology
Advances

Political and Legal Factors
60
Discuss the political and
legal environment
of marketing.
LO9

Political and Legal Factors
61
 New technology
 Society
 Businesses
 Consumers
Laws and Regulations Protect:Laws and Regulations Protect:

Competition Bureau
Competition ActCompetition Act
Packaging and Labelling ActPackaging and Labelling Act
Textile Labelling ActTextile Labelling Act
Precious Metals ActPrecious Metals Act
Competition Bureau

63
LO9
Political and Legal Environment of Marketing
Protecting
Consumer
Protecting
Business
Federal Legislation
Provincial Legislation
Self-Regulation

Competitive Factors
64
Explain the basics of foreign
and domestic competition.
LO10

Competitive Factors
65
How many competitors?
How big are competitors?
Specific strategies?
How strong and aggressive?
How interdependent is
the industry?

Competition for Market
Share and Profits
• Firms must work harder to
maintain profits and market
share.
Global Competition
• More foreign firms
are entering Canadian
market.
• Foreign firms in Canada
now compete on product
quality.
66
Competitive Factors

67
LO10
Mature Industries
Slow Growth /
No Growth
Highly Competitive Marketplace
Can only increase
market share by
taking it from a competitor.
Foreign and Domestic Competition

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