1Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning...
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1 Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Ethics, Social Responsibility, Ethics, Social Responsibility, and, the Marketing Environment and, the Marketing Environment Prepared by Prepared by Deborah Baker Deborah Baker Texas Christian University Texas Christian University Chapter 2
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Transcript of 1Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning...
1Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Ethics, Social Responsibility, Ethics, Social Responsibility, and, the Marketing Environment and, the Marketing Environment
Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 2
2Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning ObjectivesLearning Objectives
1. Describe the role of ethics and ethical decisions in business
2. Discuss corporate social responsibility.
3. Discuss the external environment of marketing, and explain how it affects a firm.
3Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(continued)
4. Describe the social factors that affect marketing.
5. Explain the importance to marketing managers of current demographic trends.
6. Explain the importance to marketing managers of multiculturalism and growing ethnic markets.
4Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(continued)
7.Identify consumer and marketer reactions to the state of the economy.
8.Identify the impact of technology on a firm.
9.Discuss the political and legal environment of marketing.
10.Explain the basics of foreign and domestic competition.
5Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe the role of ethics and ethical decisions in business.
11
6Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Ethics and MoralsEthics and Morals
EthicsEthics
MoralsMorals
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.
11
7Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Ethical Behavior in BusinessEthical Behavior in Business
Ethical?Ethical? Legal?Legal?
11
8Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Ethical Development LevelsEthical Development Levels
PreconventionalMorality
PreconventionalMorality
ConventionalMorality
ConventionalMorality
PostconventionalMorality
PostconventionalMorality
MoreMature
MoreSelfish
11
9Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Morality and Business EthicsMorality and Business Ethics
PreconventionalMorality
PreconventionalMorality
Childlike level
Based on what will be punished or rewarded
Self-centered, calculating, selfish
11
10Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
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”
11
11Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Morality and Business EthicsMorality and Business Ethics
PostconventionalMorality
PostconventionalMorality
Morality of the mature adult
Concern about how they judge themselves
Concern if it is right in the long run
11
12Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Ethical Decision MakingEthical Decision Making
Social Consensus
Social Consensus
Extent 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
11
13Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Code of EthicsCode of Ethics
A guideline to help marketing
managers and other employees
make better decisions.
11
On Linehttp://www.ethics.ubc.ca/resources/business
On Linehttp://www.ethics.ubc.ca/resources/business
14Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
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
11
15Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Unethical PracticesUnethical Practices11
16Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss corporate social responsibility.
22
17Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Corporate Social Corporate Social ResponsibilityResponsibility
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.
22On Linehttp://www.equalexchange.comhttp://www.crest.com
On Linehttp://www.equalexchange.comhttp://www.crest.com
18Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the external environment of marketing, and explain how it affects a firm.
33
On Linehttp://www.levi.com
On Linehttp://www.levi.com
19Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Target MarketTarget Market
A defined group most likely
to buy a firm’s product.
33
20Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
External Marketing External Marketing EnvironmentEnvironment
DemographicsDemographics
SocialChangeSocial
Change
EconomicConditionsEconomicConditions
Political & Legal FactorsPolitical &
Legal Factors
TechnologyTechnology
CompetitionCompetition
EnvironmentalEnvironmentalScanningScanning
Target Market
ProductDistributionPromotion
Price
ProductDistributionPromotion
Price
External Environment External Environment is not controllableis not controllable
Ever-ChangingEver-ChangingMarketplaceMarketplace
33
21Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
External Marketing External Marketing EnvironmentEnvironment
SocialSocial
DemographicDemographic
EconomicEconomic
TechnologicTechnologic
Political and LegalPolitical and Legal
CompetitiveCompetitive
External Environmental
Factors
External Environmental
Factors
33
22Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe the social factors that affect marketing.
44
23Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Social FactorsSocial Factors
ValuesValues AttitudesAttitudes LifestyleLifestyle
Social FactorsSocial Factors
44
24Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
American ValuesAmerican Values
Self-SufficiencySelf-Sufficiency
Basic Basic American American
ValuesValues
Basic Basic American American
ValuesValues
Upward MobilityUpward Mobility
Work EthicWork Ethic
ConformityConformity
44
25Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
The Influence of Values The Influence of Values on Buying Habitson Buying Habits
1. Reliability1. Reliability
2. Durability2. Durability
3. Easy maintenance3. Easy maintenance
4. Ease of use4. Ease of use
5. Trusted brand5. Trusted brand
6. Low price6. Low price
RankedCharacteristics
of Product Quality
RankedCharacteristics
of Product Quality
44
26Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
The Poverty of TimeThe Poverty of Time
A lack of time to do
anything but work,
commute to work, handle
family situations, do
housework, shop, eat,
sleep...
44
27Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Component LifestylesComponent Lifestyles
The practice of choosing
goods and services that
meet one’s diverse needs
and interests rather than
conforming to a single,
traditional lifestyle.
44
28Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Role of Families & WomenRole of Families & Women
58% of all females (ages 16-65) are in the workforce
Purchasing power from dual-career families is rising
“Traditional” purchasing roles and patterns are changing
44
29Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the importance to marketing managersof current demographic trends.
55
30Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Demographic FactorsDemographic Factors
AgeAge LocationLocation Race and Ethnicity
Race and Ethnicity
DemographyDemography
55
31Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
The Demographic Facts of lifeThe Demographic Facts of life55
32Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Age Groups: Generation YAge Groups: Generation Y
Born between 1979 and 1994
Size creates immense marketing impact
Respond to ads differently
Love customized products and services
55
On Linehttp://www.generation-y.com
On Linehttp://www.generation-y.com
On Linehttp://www.mountaindew.comhttp://www.northface.com
On Linehttp://www.mountaindew.comhttp://www.northface.com
33Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Age Groups: Generation XAge Groups: Generation X
Born between 1965 and 1978
Savvy and cynical consumers
Indulge themselves with meals/alcohol, clothing, and electronics
55
34Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Age Groups: Baby BoomersAge Groups: Baby Boomers
Born between 1946 and 1964
Cherish youth, convenience, and individuality
In the “nesting stage” of life
Individualism has led to a personalized economy
55
35Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Personalized EconomyPersonalized Economy
Delivering customized
goods and services at a
good value on demand.
55
36Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Age Groups: Older Age Groups: Older ConsumersConsumers
Age “55 plus”
Healthier, wealthier, better educated
Definite about wants and needs
Have unique behavior patterns
Not happy with advertising treatment
55On Linehttp://www.gct.comhttp://www.maupintour.com
On Linehttp://www.gct.comhttp://www.maupintour.com
37Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the importance to marketing managers of multiculturalism and growing ethnic markets.
66
38Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Growing Ethnic MarketsGrowing Ethnic Markets
U.S. population is becoming a multicultural society and workforce
Trend in U.S. is toward greater multiculturalism
Growth in three ethnic minorities:
• African-Americans
• U.S. Hispanics
• Asian-Americans
66
39Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
MulticulturalismMulticulturalism
When all major ethnic
groups in an area--
such as a city, county, or
census tract--are roughly
represented.
66
On Linehttp://www.bet.comhttp://www.multiculturalmarketingresources.com
On Linehttp://www.bet.comhttp://www.multiculturalmarketingresources.com
40Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Identify consumer and marketer reactions to the state of the economy.
77
41Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
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
77
42Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
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
77
43Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
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
77
44Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
RecessionRecession
Income, production and employment fall
Reduced demand for goods and services
77
45Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Recession Marketing Recession Marketing StrategiesStrategies
Improve existing products
Introduce new products
Maintain customer services
Emphasize top-of -the line productsand promote product value
77
46Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Identify the impact of technology on a firm.
88
47Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Basic and Applied ResearchBasic and Applied Research
Basic ResearchBasic Research
AppliedResearchAppliedResearch
Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon.
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
An attempt to develop new or improved products
88
48Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Technological & Resource Technological & Resource FactorsFactors
New technology is a weapon against inflation and recession
U.S. excels at basic and applied research
Information technology and the Internet have increased productivity
88
49Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the political and legal environment of marketing.
99
50Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Political and Legal FactorsPolitical and Legal Factors
Consumers
Businesses Society
New Technology
Laws and Regulations ProtectLaws and Regulations ProtectLaws and Regulations ProtectLaws and Regulations Protect
99
51Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Federal LegislationFederal Legislation
Sherman Act
Clayton Act
Federal Trade Commission Act
Robinson-Patman Act
Wheeler-Lea Amendments to the FTC Act
Lanham Act
Celler-Kefauver Antimerger Act
Hart-Scott-Rodino Act
99
52Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Regulatory AgenciesRegulatory Agencies
Consumer Product Safety Commission
Federal Trade Commission
Food & Drug Administration
99
On Linehttp://www.ftc.gov
On Linehttp://www.ftc.gov
53Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
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
99
On Linehttp://www.fda.gov
On Linehttp://www.fda.gov
54Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the basics of foreign and domestic competition.
1010
55Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Competitive FactorsCompetitive Factors
How many competitors?
How big are competitors?
How interdependent isthe industry?
Control
1010
56Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
Competitive FactorsCompetitive Factors1010
Competition forCompetition forMarket ShareMarket Share
and and ProfitsProfits
Competition forCompetition forMarket ShareMarket Share
and and ProfitsProfits
Global Global CompetitionCompetition
Global Global CompetitionCompetition
57Chapter 2 Essentials of Marketing 4e Lamb Hair McDaniel©2005 South-Western/Thomson Learning
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
1010
