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Presentation prepared by Robin Roberts, Griffith University and
Copyright Johnof
Wiley
& Sons 2007
Mike Spark, Swinburne University
Technology
Chapter 3
The marketing environment, social
responsibility and ethics
Copyright John Wiley & Sons 2007
Chapter Objectives
• Recognise the importance of environmental
scanning and analysis
• Explore the effects of competitive,
economic, political, legal and regulatory,
technological and sociocultural factors on
marketing strategies
• Understand the concept and dimensions of
social responsibility
• Differentiate between ethics and social
responsibility
Chapter 3
Copyright John Wiley & Sons 2007
The Marketing Environment
External forces that directly or indirectly
influence an organisation’s acquisition of inputs
• Human
• Financial
• Natural resources
• Raw materials
• information
and creation of outputs
• goods, services and ideas
Chapter 3
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The Marketing Environment
Monitoring of changes is done by:
Environmental scanning
is the process of collecting information
about environmental forces in the
marketing environment
Environmental analysis
is the process of assessing and
interpreting the information gathered
through that scanning
Chapter 3
Copyright John Wiley & Sons 2007
The Marketing Environment
When confronted with environmental
changes, marketing managers can choose to
1) Accept them as uncontrollable
2) Attempt to shape or influence them
– The first option means becoming
passive and reactive (adjust
strategies to fit the changes)
– The second is more proactive, more
constructive and can bring desired
results
Chapter 3
Copyright John Wiley & Sons 2007
Competitive forces
Marketers need to monitor the actions of
major competitors to determine what specific
strategies competitors are using and how
those strategies affect their own
The competitive environment in
book retailing
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Chapter 3
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Economic forces
Buying power — resources such as
money, goods & services, that can be
traded in an exchange
•
The amount of total income is important,
but disposable income is more relevant
•
Discretionary income is what is left after
paying for basic necessities
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Economic forces (cont’d)
Willingness to spend — an inclination to
buy for various reasons.
•
•
•
to some degree, related to the ability to buy
by the product’s price and value
general spending can be influenced by
• our level of satisfaction with alreadyowned products,
• our expectations about employment,
income levels, family size
• general economic conditions
Chapter 3
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What economic factors affect your
manufacturing business?
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Simon Bottomley, HaveStock Manufacturing
Chapter 3
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Political, legal and regulatory forces
These forces are closely inter-related,
using differing parts of the governmental
and electoral systems
•
A proactive approach can be constructive
(e.g. organisations helping a person to be
elected)
•
Lobbying is commonplace and widely
used by organisations, firms and
industries at all levels of government
Chapter 3
Copyright John Wiley & Sons 2007
Legal and regulatory forces
Federal and State laws impact most marketing
decisions and activities —
they can be complementary or contradictory
• The marketer must be aware of and comply
with these regulations, or risk fines and even
jail terms
Chapter 3
Copyright John Wiley & Sons 2007
Self-regulation
Some businesses and many industries
and trade associations — try to be
good corporate citizens and regulate
the activities of their members and
employees
• Self-regulatory programs are typically less
expensive and tend to be more realistic than
those instituted by government.
Chapter 3
Copyright John Wiley & Sons 2007
Technological forces
Existing and new technology determines
how we, as members of society, satisfy our
physiological, social and psychological
needs.
• Technology assessment allows us to
foresee the effects on our organisation,
and assess the viability of its adoption
Chapter 3
Copyright John Wiley & Sons 2007
Technology – an environmental force
changing the DVD rental industry
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Quickflix
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Sociocultural forces
These are the influences in a society and its
culture(s) that bring about changes in
attitudes, beliefs, norms, customs and
lifestyles, and thereby present both
challenges and opportunities
• Demographics (aging population, changes in
workplace gender balance and household size)
• Social and cultural values (healthy eating,
marriage permanence, children)
Chapter 3
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To which trends in the marketing
environment is Toyota responding?
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Social responsibility
and ethics in marketing
Social responsibility — an
organisation’s obligation to maximise its
positive impact and minimise its negative
impact on society
• it deals with the total effect of all
marketing decisions on society
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Social Responsibility at Toyota
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Social Responsibility at Quiksilver
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Jason Haynes, Director of Marketing, Quiksilver Australasia
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Economic dimension
Organisations have economic responsibilities
They should:
– be profitable for shareholders and
stakeholders
– compete fairly, for the benefit of all
in the community
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Legal dimension
All organisations have a legal
responsibility to obey all applicable
laws and regulations
Failure to do so may result in:
– legislative retaliation, or
– litigation, or
– community retaliation
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Ethical dimension
Marketing ethics are principles and
standards that define acceptable conduct
in marketing, as determined by various
stakeholders
• The basic principles are generally codified
as laws and regulations, but ethics goes
beyond legal compliance (the minimum)
— it fosters trust, which is the basis of
long-term marketing relationships
Chapter 3
Copyright John Wiley & Sons 2007
Philanthropic dimension
This refers to responsibilities that are not
required of a company but they promote
human welfare or goodwill (as do the
economic, legal and ethical dimensions of
social responsibility)
• Organisations of all sizes participate in
philanthropy through donations and
volunteer support of local and national
causes and charities
Chapter 3
Copyright John Wiley & Sons 2007
Which dimension of social responsibility
is the Australian Government addressing
with its ‘Building a Healthy, Active
Australia’ campaign?
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Social responsibility (SR) issues
Natural environment
– can be demonstrated by involvement
with programs designed to protect and
preserve the natural environment
Consumerism
– organised efforts by individuals, groups
and organisations seeking to protect
consumers’ rights
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Copyright John Wiley & Sons 2007
Chapter 3
Copyright John Wiley & Sons 2007
Incorporating SR and ethics
into strategic planning
Ethics and SR programs can be profitable
in the long term to the organisation as well
as beneficial to society
• Compliance programs and uniform
standards
• Codes of conduct
• Codes of ethics
Chapter 3
Copyright John Wiley & Sons 2007
Chapter 3
Copyright John Wiley & Sons 2007