Transcript social responsibility, ethics, and the marketing environment

Key Concepts
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Corporate Social Responsibility
Corporate Social Responsibility
Philanthropic
Be a good citizen.
Ethical
Do what is right.
Legal
Obey the Law.
Economic
Be profitable.
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.
Code of Ethics
A guideline to help marketing
managers and other employees
make better decisions.
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Dot.com bubble of 1990s
Enron
Madoff
Subprime crisis
Financial institutions - AIG, Wachovia,
Lehman Brothers, Merrill Lynch and Citigroup
GREED ** IRRESPONSIBILITY  GLOBAL CRISIS
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Helps identify acceptable business practices
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Helps control behavior internally
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Avoids confusion in decision making
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Facilitates discussion about right and wrong
Internal
(within the
organization)
External Environment
(uncontrollable)
Social
Change
Demographics
Ever-Changing
Marketplace
Marketing mix
Economic
Conditions
Product
Distribution
Promotion
Price
Competition
Target Market
Political &
Legal Factors
Environmental
Scanning
Technology
Target Market
A defined group most likely to
buy a firm’s product.
 Social
factors that affect
marketing
Attitudes
Values
Lifestyle
Social Factors Influence:
Products purchased
Prices paid for products
Effectiveness of promotions
How, where, and when people purchase
Core American Values
Self-Sufficiency
Upward Mobility
Work Ethic
Conformity
Ranked Characteristics
of Product Quality
Reliability
Durability
Easy maintenance
Ease of use
Trusted brand name
Low price
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Growth of dual-income families results in
increased purchase power
Approximately 63% of work-age females
are in the workforce
Women expect different things in life
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purchase bulk of technology products
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do most of the grocery shopping
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second largest group of home buyers
after couples
Single households outnumber married
households with kids
Demography
The study of people’s
vital statistics, such as
their age, race and
ethnicity, and location.
Pre- and early adolescents,
age 8 to 14
Population of 29 million
Purchasing power of $39
billion in 2007
View TV ads as “just advertising”
Emerging as “the richest generation”
and the “most influential generation in
history”
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Born between 1979 and 1994
Population of 60 million
Purchasing power of $200 billion annually
Researchers have found Gen Yers to be:
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Impatient
Family-oriented
Inquisitive
Opinionated
Diverse
Time managers
“Street Smart”
Word of mouth marketing is
effective
http://www.mountaindew.com
http://www.northface.com
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Born between 1965
and 1978
Population of 40
million
Savvy and cynical
consumers
Time is at a premium,
and outsourcing is
utilized
Entering their moneymaking years
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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
Age
Tweens
Gen Y
Gen X
Baby Boom
8 to 14 yrs
29 million
1979-1994
60 million
1965-1978
40 million
1946-1964
77 million
The importance of multiculturalism
and growing ethnic markets to
marketing managers
 Spending power of ethnic markets by 2008:
 Hispanics: $1 trillion
 African Americans: $921 billion
 Asian Americans: $526 billion
 Diversity can result in bottom-line benefits
to companies.
 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.
 Many firms are
creating products
for the African
American market.
 Promotional dollars
and media choices
directed toward
African Americans
continue to increase.
 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.
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Consumer and marketer reactions to
the state of the economy
Economic Factors
Distribution of
Consumer Income
Inflation
Recession
Consumers’ Incomes
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Median U.S. household income in 2007
projected at $45,000
Incomes have risen at a slow pace.
Education is the primary
determinant of earning
potential.
Consumers are strapped
for cash.
LO7
The Financial Power of Women
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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:
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68%
66%
66%
53%
51%
of
of
of
of
of
new cars
computers
home improvements
investments
consumer electronics
Recession
Recession
A period of economic activity
characterized by negative growth,
which reduces demand for goods
and services.
Recession Marketing Strategies
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Improve existing
products and
introduce new ones
Maintain and expand
customer services
Emphasize top-ofthe-line products and
promote product value
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The impact of technology on a firm
Technological Factors
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U.S. excels at basic and applied research.
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Many firms use the market concept to
guide research.
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New technology internally creates a longterm competitive advantage.
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External technology
 Creates more efficient operation or better products
 May render existing products obsolete
Technological Factors
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Innovation is becoming
a global process.
New technologies
create new
opportunities
RSS (Really Simple
Syndication)
Blogging
Basic
Research
Applied
Research
Marketing
Mix
Technology
Advances
Political and Legal Factors
Laws and Regulations Protect:
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New technology
Society
Businesses
Consumers
Federal Legislation
Regulate
competitive
environment
Regulate
pricing practices
Control false
advertising
Sherman Act
Clayton Act
Federal Trade Commission Act
Celler-Kefauver Antimerger Act
Hart-Scott-Rodino Act
Robinson-Patman Act
Wheeler-Lea Act
Regulatory Agencies
Consumer
Product Safety
Commission
Protects consumer safety in
and around their homes
Federal Trade
Commission
Prevents unfair methods of
competition in commerce
Food & Drug
Administration
Enforces safety regulations for
food and drug products
http://www.ftc.gov
Powers of the FTC
Cease-and-Desist Order
Consent Decree
Affirmative Disclosure
Corrective Advertising
Restitution
Counteradvertising
Consumer Privacy
Government Actions
 Gramm-Leach-Bliley Act
 Health Insurance Portability and
Accountability Act (HIPPA)
 California’s Notice of Security Breach Law