Transcript Chapter 3
Chapter 3 The Marketing Environment, Ethics, and Social Responsibility Environmental Scanning • the process of collecting info about the external mkt environment in order to id & interpret potential trends Competition in a Competitive Environment 1. direct competition between marketers of similar products ie: Huggies vs. Pampers 2. marketers of products that can be substituted for each other ie: bus vs airplane 3. Competition for consumer dollars – product can be similar or dissimilar, all firms compete for part of consumer dollars ie: car purchase vs. lawn service Competitive Strategy 1. Should we compete? – decide based on: resources, objectives & profitability 2. If so, in what markets should we compete? – allocate resources to areas of greatest opportunity (target market) 3. How should we compete? – Price, Quality, etc. The Political-Legal Environment • laws that govern business activity Table 3.1 Pg. 86 • FTC: false/misleading advertising – What happens if firms don’t comply?? The Economic Environment 5 Factors 1. BUSINESS CYLES – prosperity • marketers: expand product lines, raise prices, etc. – recession • marketers: lower prices,eliminate marginal products, etc. (6 months) – depression – recovery - consumer ability to buy is up - but confidence is not 2. INFLATION – rising price level that results in reduced consumer buying power – http://www.gpec.org/InfoCenter/Topics/Economy/USIn flation.html 3. UNEMPLOYMENT – rises during recessions, lowers during prosperity & recovery periods – http://www.bls.gov/news.release/empsit.nr0.htm 4. RESOURCE AVAILABILITY – Limited resources: – DEMARKETING - try to reduce consumer demand - ie: utility companies 5. INCOME – marketers study income stats & trends to estimate market potential – interested in discretionary income THE TECHNOLOGICAL ENVIRONMENT • Can create an entire new industry, not just new products. What are some examples?? The Social-Cultural Environment • relate btw marketing & society and its culture • marketers must be sensitive to changes in values & demographics • Ex. Low-fat food Criticisms of Competitive Marketing System 1. Costs too high 2. Marketing system is inefficient 3. Marketers guilty of collusion & price fixing 4. product quality & service are poor 5. consumers get incomplete, false, or misleading information 6. marketing system has produced health & safety hazards 7. unwanted/unnecessary products are promoted to those who need them least MARKETING ETHICS AREAS OF CONCERN 1. Marketing Research- invasion of privacy 2. Product Strategy Ethics - misleading packaging - odd sizing of products - bottles w/ concave bottoms 3. Distribution Strategy Ethics - should products in marginally profitable outlets be kept because no alternative source of supply? 4. Promotional Strategy Ethics – gives rise to majority of ethical questions – gifts & bribes common enticements 5. Pricing Ethics – unethical price behavior is usually illegal AMA Code of Ethics: SOCIAL RESPONSIBILITY • acceptance of obligation to consider profit, consumer satisfaction, & societal well-being of equal value in evaluating firm performance