Transcript Essentials of marketing – Chapter 14

Chapter 14
Marketing environments
and ethics
Learning objectives
1 Discuss the external environment of
marketing, and explain how it affects
an organisation
2 Describe the sociocultural factors that
affect marketing
3 Explain the importance to marketing
managers of current demographic
trends
Learning objectives (cont.)
4 Explain the importance to marketing
managers of multiculturalism and
growing ethnic markets
5 Identify consumer and marketer
reactions to the state of the economy
6 Identify the impact of technology on
an organisation
7 Discuss the political and legal
environment of marketing
Learning objectives (cont.)
8
Explain the basics of foreign and
domestic competition
9
Describe the role of ethics and
ethical decisions in business
10 Discuss corporate social
responsibility
Learning objective 1
Discuss the external
Define
the term
environment
of marketing
marketing,
and explain how it affects
an organisation
1
Target market
A defined group most
likely to buy a firm’s
product.
1
External marketing environment
External environment
is not controllable
Competitive
environment
Economic
environment
Product
Sociocultural
environment
Ever-changing
marketplace
Distribution
Technological
environment
Target
market
Integrated
marketing
communication
Pricing
Political and legal
environment
1
External environmental factors
•
Social
•
Demographic
•
Economic
•
Technological
•
Political and legal
•
Competitive
Learning objective 2
Describe
marketing
Describefour
the sociocultural
management
philosophies.
factors that affect
marketing
2
Sociocultural factors
Age factors
•
Generation Y
•
Generation X
•
Baby boomers
2
Age groups: Generation Y
• Born between 1979 and
1994
• Size creates immense
marketing impact
• Respond to ads differently
2
Age groups: Generation X
• Born between 1965 and 1978
• Savvy and cynical consumers
• Indulge themselves with meals,
alcohol, clothing and electronics
2
Age groups: Baby boomers
• Born between 1946 and 1964
• Cherish youth, convenience
and individuality
• Individualism has led to a
personalised economy
2
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.
Learning objective 3
Explain the importance to
Describe four marketing
marketing managers
of
management
philosophies.
current demographic
trends
3
Components of Australian
natural population increase
30
Crude birth rate
25
Crude death rate
20
15
10
5
0
1901
1920
1940
1960
1980
2000
ABS
3
Demographic factors
•
Age
•
Location
•
Ethnicity
Learning objective 4
Explain the importance to
marketing mangers of
multiculturalism and
growing ethnic markets
4
Growing ethnic markets
• Australian population is
becoming a multicultural
society and workforce.
• Trend in Australia is toward
greater multiculturalism.
4
Multiculturalism
When a society has more
than one ethnic culture,
the society receives
benefits as a result of this
diversity
4
Multicultural marketing
Marketing strategies for
multicultural markets
•
Niche marketing
•
Adapting promotion
•
Stitching niches
Learning objective 5
Identify consumer and
marketer reactions to the
state of the economy
5
Economic areas of concern to
marketers
•
Distribution of
consumer income
•
Inflation
•
Recession
5
Inflation
•
Prices rise with no wage increase.
•
Purchasing power decreases.
•
Increase profit margins by
increasing efficiency.
•
Consumers’ reaction:
- search for lowest prices
- rely on sales.
5
Recession
•
Income, production and
employment fall.
•
Reduced demand for goods
and services.
5
Recession marketing
strategies
•
Improve existing products.
•
Maintain and expand
customer service.
•
Emphasise top-of-the-line
products.
Learning objective 6
Identify the impact of
technology on an
organisation
6
Primary research
Pure research that aims to
confirm an existing theory
or to learn more about a
concept phenomenon.
6
Applied research
An attempt to develop new
or improved products.
Learning objective 7
Discuss the political and
legal environment of
marketing
7
Political and legal factors
Every aspect of the marketing mix
is subject to laws and regulations
•
•
•
•
Product
Price
Place
Promotion
7
Australian Competition and
Consumer Commission (ACCC)
Ensures compliance with parts
IV, IVA, V and VA of the Trade
Practices Act, Conduct Code and
Prices Surveillance Act. Actively
pursues violations of their
marketing statutes.
Learning objective 8
Explain the basics of
foreign and domestic
competition
8
Competitive factors
•
How many competitors?
•
How big are competitors?
•
How interdependent is industry?
No control
8
Competition
Global competition
Provide same product in all
markets around the world
International competition
Modified products for
different countries
Learning objective 9
Describe the role of
ethics and ethical
decisions in business
9
Ethics
The moral principles or
values that generally
govern the conduct of
an individual.
9
Morals
The rules people develop
as a result of cultural
values and norms.
9
Ethical behaviour in business
•
Who is helped or hurt?
•
How long-lasting are the
consequences?
•
What actions produce the
greatest good for the
greatest number of people?
9
Ethical development levels
More selfish
Preconventional morality
Conventional morality
More mature
Postconventional morality
9
Ethical decision-making
•
•
•
•
•
•
•
Extent of ethical problems within the
organisation
Top management actions on ethics
Potential magnitude of the consequences
Social consensus
Probability of a harmful outcome
Length of time between the decision and
the onset of consequences
Number of people to be affected
9
Code of ethics
A guideline to help
marketing managers and
other employees make
better decisions.
9
Creating ethical guidelines
• Helps identify acceptable business
practices.
• Helps control behaviour internally.
• Reduces confusion in decisionmaking.
• Facilitates discussion about right
and wrong.
Learning objective 10
Discuss corporate social
responsibility
10
Corporate social responsibility
Philanthropic – Be a good citizen
Ethical – Do what is right
Legal – Obey the law
Economic – Be profitable