Transcript Welcome to Marketing 2!

Chapter 3
Instructor Shan A. Garib, Fall 2012
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Corporate Social Responsibility: a business’s
concern for society’s welfare
-reflects consideration of long-term interest
of both company and it’s relationship to
society
-simmilar to market oriented firms but with a
larger focus
-business needs rich people to buy their
goods/services so need to help to poor
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Four Components of Total Corporate Social
Responsibility:
1.
2.
3.
4.
Economic
Legal
Ethical
Philanthropic
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Ethics: Moral principles and values that direct
behaviour
-personally held
Morals: rules people develop as a result of
cultural values of norms
-characterized as good or bad
eg. Selling to disadvantaged customer
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Morality and Business Ethics
-The values of business people have been
acquired through family, education and
religion
-To develop a personal set of ethics:
-evaluate the consequance of a particular
act
-stress importance of rules
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Morality and Business Ethics
-To develop a personal set of ethics:
-evaluate the consequance of a particular
act
-stress importance of rules, laws
-develop moral character through:
1. preconventional morality
2. conventional morality
3. postconventional morality
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Ethical Decision Making is influenced by:
1.
2.
3.
4.
5.
6.
7.
Extent of ethical problems in the
organization
Top management ethics
Potential magnitude of consequences
Social consensus
Probability of a harmful outcome
Length of time to consequences
Number of people affected
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(Code of) Ethical Guidelines to help managers
make better decisions
Advantages:
1. Employees see what their firm thinks is
acceptable
2. Effective internal control on behaviour as
opposed to external like the government
3. Avoid confusion
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Understanding the External Environment
-Managers must constantly change the
marketign mix (4P’s) to reflect the ever
changing environment
-This is doen through “environmental scanning”
-Goal: identify future opportunities and
threats!!
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Environmental Management: sometimes the
company can impliment strategies that
influence the environment
-done through lobbying
-environmental factors include:
-social
-demo
-economic
-tech
-political, legal
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-Hardest to infulence and change
-they influence what you buy, prices paid...
-examples are: consumer attitudes, values and
lifestyles
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Market-oriented Values
Value: a strongly held belief, determines what
is important and not important
Four values influencing our lifestyles and
attitudes:
1. self-sufficiency – stand on own feet
2. upward mobility – work hard, you get it
3. work ethic – hard work is moral and right
4. conformity – noone should expect to be
treated differnetly from anyone else
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Values influence our buying habits.
-consumers insist on hogh quality products
-ranking characteristics of product quality:
1. reliability
2. durability
3. easy maintenance
4. ease of use
5. a trusted brand name
6. a low price
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The growth of component lifestyles
-choosing products and services that meet
diverse needs and interests
Eg. Banker/biker
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The changing role of families and working
women
Duel incomes means greater purchasing power!
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Demography: study of people’s vital statisitcs
-strongly related to consumer behaviour
-each age froup has own tastes and biases
Tweens: 9-14
Generation Y: 79-94, tech, clothes
-diverse
-savvy
-impatient
Gen X: 66-78
-spending varied, 40 are money making
years
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Demography: study of people’s vital statisitcs
-strongly related to consumer behaviour
-each age froup has own tastes and biases
Gen X: 66-78
-spending varied
-40’s are money making years
Boomers: 47-65
-largest segment
-biggest spenders
-brand hop
50% of population now in larger cities
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Ethnic and Cultural Diversity
Multiculturalism: major ethnic groups in an area
are equally represented
-mostly in larger urban areas
-cmopanies change their marketing
programmes to relfect this change eg. CIBC,
hospitals
-25% of visible minority population is under
14, and will be able to converse in multiple
languages
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Three areas of concern for marketers:
1. consumers’ incomes
2. inflation
3. recession
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Three areas of concern for marketers:
1. consumers’ incomes
2. inflation
3. recession
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Three areas of concern for marketers:
1. consumers’ incomes
-median income for a family is 58k CAD
-education primary determinant of earnign
potential
-Income, willingness to buy, ability to buy
determines target market
eg. dollar store in lower income
neighbourhoods
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Three areas of concern for marketers:
1a. consumers’ incomes
-credit cards allow lower and middle
income earners to live like the rich
1b. purchasing power: comparing income to
cost of things
-or, income minus cost of living
eg. Prices in Nova Scotia 3x less than in
Toronto. If make the same as worker in Toronto
then can afford more
-more disrectionary income
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Three areas of concern for marketers:
2. inflation: decrease in value of money or,
increase in prices
eg. Choc bar $1 then goes up to $1.05
inflation rate is 5%
-if salary raises are 5% then same
purchasing power before the change as after
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Three areas of concern for marketers:
3. Recession: negative frowth in economy
for 6months+
-reduction in demand for goods/services
-different marketing approach:
1. improve products, or new ones
2. expand customer service
3. emphasize top of the line and
promote product value
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External technology important to marketing
managers:
1. by acquiring technology, more efficient
operation or create a better product
2. new technology may render existing
technology obsolete eg. Camera film
-staying technologically relevant means
managers need to do research and adopt new
technologies
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Staying technologically relevant means managers
need to do research and adopt new technologies
Research: expand knowledge, confirm exisiting
theory
Applied research: develop new or improved
products
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Federal Legislation affecting how business is
conducted is administered through the
competition bureau
-enforces laws covering: bankruptcy, trade
practices, competition, credit, labelling,
packaging, copyrights, trademarks and patents
Provincial Laws: different laws for different
provinces
eg. Quebec language laws
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Self-regulation: indusrty groups that police
themselves
eg. CMA developing guidelines and ethical
practices
Consumer Privacy
-Every firm should be able to justify the type and
use of information it has
-Privacy Act and Personal Information Protection
and Electronic Documents Act: protect privacy of
personal information for collection, use and
disclosure
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The competitive environment is made up of:
1. Number of competitors
2. Size of competitors
3. Degree of interdependance
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Competition for Market Share and Profits
-As population grows, costs rise, resources
limited firms have to work harder to maintain
profits and market share!!!!!
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