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SOCIAL RESPONSIBILITY ANDTHE MARKETING ENVIRONMENT BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 1 Some Ethical Issues • Misleading advertisements and marketing in general • Taking advantage of consumer ignorance • Marketing of harmful products – Physically dangerous – Over-consumption; marketing to people living above their means • Marketing of products banned or not marketed in the U.S. to other countries BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 2 “Win-Win” Deals and Social Responsibility • By pooling resources, different organizations may each get more than what they put in – Firms may be able to contribute not only cash but also relevant expertise – Favorable publicity may be worth more than the same amount spent on advertising – Charitable groups may provide access to potential customers BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 3 Sponsored Fundraising • Non-profit groups currently spend a large proportion of their revenue on fundraising • “Sponsored Fundraising:” Fund raising efforts could be done by firms on behalf of the charitable group – Firm sends and pays for letter on behalf of organization – Firm gets promotional benefit – Charity saves money and improves credibility • Obstacles: Privacy concerns; matching of firms and relevant charities BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 4 Promotional Events • A large retail chain might sponsor a concert series by paying all expenses in return for considerable publicity • Triple “win-win-win” deal: – The charity receives the proceeds without having to pay costs – The sponsor receives publicity. Tickets are bought in the store or on its web site. – An aging artist—whose fans are now in their prime earning years—gets an opportunity to revive a career or promote a new venture (e.g., movie role) BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 5 Commercial Comedy • Advertising mascots (e.g., the Energizer Bunny, Ronald McDonald, and the AFLAC Duck) are sent (with other talent) to perform comedy at non-profit fundraising events • The non-profit gains: High quality, low cost entertainment • The sponsor gains – Significant visibility – Attention to advertising message/awareness – Secondary media coverage – Good will among those exposed BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 6 IN-CLASS ASSIGNMENT In teams of your choice (any size from 1 to the whole section is fine), please identify a way in which a firm of your choice may be able to profit on some socially responsible action. Please prepare a brief (1-3 minute) presentation to the rest of the class on what you concluded, including: • The social benefit that you expect to result. • The way in which the firm will make money on this, either in the short or long run. • Any specifics that you have discussed. The team can present either as a whole or have one or several people do the talking. BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 7 THE MARKETING ENVIRONMENT • • • • • • BUAD 307 Culture Demographics Social Technology Economic Political and Legal Factors SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 8 CULTURE • Culture: Behavior and “shared meanings” • Variations – Country – Regional • Impact of culture on expectations and what is “right” to do – Individuality vs. collectivism – Relationships between people – Work habits BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 9 DEMOGRAPHICS • Distribution of people across statistical categories – Occupation – Income – Ethnicity Language usage – Age Birth rates – Residence (e.g., urban/rural) BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 10 SOCIAL FACTORS • Values—tensions – Value of privacy vs. security – “Green” products vs. • Cost • Convenience • Performance • “Component lifestyles” • Demographic changes BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 11 ECONOMIC FACTORS • Consumer debt – Credit card/specific – Real estate • Purchasing power – Over time (inflation) – Across domestic regions – Across countries • Economic cycles • “New” family expenses: Internet, cable/satellite TV, cell phone BUAD 307 “Teach a parrot to say ‘supply” and ‘demand” and you have a learned economist!” Paul Samuelson. SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 12 TECHNOLOGICAL FORCES • Internet/Communications – Direct consumer-consumer communication – Information search opportunities – Growth of “portables” • Manufacturing – Increased global scope of competition due to easier entry – Greater competition for quality, selection • Emerging industries and obsolescence (shortening technology life cycles) BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 13 POLITICAL AND LEGAL FACTORS • Political – Special interests and lobbying – Response to crises legislation, regulation • Legal – Consumer Protection Laws • Truth in Lending • Deceptive Advertising • Product Safety – Antitrust (fair competition) will be covered under pricing – Laws relating to international trade will be covered under international marketing BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 14 REGULATORY INFLUENCES • Regulation – Joint Federal and state regulation – Delegation by Congress and state legislatures to regulatory agencies to handle specifics of complex issues • Consumer protection – Consumer Product Safety Commission (CPSG), Federal Trade Commission (FTC), Food & Drug Administration (FDA) BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 15 CULTURE DEMOGRAPHICS INFLUENCES ON THE FIRM AND ITS CHOICES SOCIAL ENVIRONMENT ECONOMIC RESOURCES TECHNOLOGY LEGAL/POLITICAL PROFIT PRESSURE FIRM SOCIAL RESPONSIBILITY BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT OPPORTUNITIES Lars Perner 16