Download PowerPoint Chapter 3

Chapter 3
The Marketing
Environment, Ethics,
and Social
Responsibility
Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Environmental Scanning and Management:
Closely Related
 Environmental Scanning
 Environmental Management
3-2
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This advertisement shows an AntiDrug Commercial.
This is an example of Social
Responsibility on the part of
Government.
3-3
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 Elements of
the Marketing
Mix Within an
Environmental
Framework
3-4
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 SOTHEBYS.COM
Environmental
Scanning
resulted in the
AmazonSotheby’s
partnership
3-5
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The Competitive Environment
 Competitive Environment: The interactive
process that occurs in the marketplace
among marketers of:
Directly competitive products
Substitute products
All products
3-6
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 RIMADYL
 Developed by
Pfizer’s Animal
Health Division,
Offers Dogs Relief
From Arthritis
Pain. Pfizer’s
Patent Gives It
Exclusive Rights
to Produce and
Market the
Medication.
3-7
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 Types of Competition
Directly
Competitive
Products
 Legoland Competes
with Other Theme
Parks in California
3-8
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Direct Competition: Lincoln
Developed This Smaller
Luxury Car to Compete
Directly with Luxury Cars of
Similar Size
3-9
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 Types of Competition
Indirectly Competitive Products
Mountain Dew Competes
Directly with Other Soft Drinks As
Well as Indirectly with Substitutes
Like Bottled or Canned Iced Tea
and Bottled Water
3-10
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 Types of Competition
All Consumer Purchases
This PlayStation Navy Seals
Game Competes Against
Many Products, From Dining
Out to Buying a New Pair of
Shoes
3-11
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 Developing a Competitive Strategy
Should we compete?
If so, in what markets should we compete?
How should we compete?
3-12
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This Quizno’s advertisement about
demonstrates the importance of
asking and addressing the three
critical questions
3-13
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The Political-Legal Environment
 Component of the marketing environment
consisting of laws and interpretations of laws
that require firms to operate under
competitive conditions and to protect
consumer rights.
3-14
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 Bell Atlantic & GTE
 Deregulation
Increases
Competitiveness in
the
Telecommunications
Industry
3-15
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 Government Regulation
Protection of Competitors
Began in the late 19th century
Aimed at to maintaining a competitive
environment by reducing the trend toward
monopolies
3-16
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Protection of Small Businesses
Began during the depression era of the
1930s
Meant to protect independent merchants
against competition from larger chain
stores
Included the Robinson-Patman Act
3-17
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Protection of Consumers
Began mainly in the 1960s
Increased focus on consumer protection
3-18
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Industry Deregulation
Began in the late 1970s
Focused on deregulating specific
industries
Included:
Airline Deregulation Act
Telecommunications Act
3-19
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Newest regulatory frontier is
cyberspace
Immediate goal is protection of
consumers from online fraud and
deceptive advertising
Privacy and child protection issues
present difficulties
3-20
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 Other Regulatory Forces
Consumer interest groups
National Coalition Against Misuse of
Pesticides
Special-interest groups
American Association of Retired People
(AARP)
Self-regulatory groups
3-21
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 Influencing the Political-Legal Environment
Companies fight unjust regulations
Regulations can present new opportunities
Political lobbying
Boycotts
Political action committees
3-22
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 Economic Environment
Factors that influence consumer buying
power and marketing strategies
stage of the business cycle
Inflation
Unemployment
resource availability
income
 Stages in the Business Cycle
Cyclical patterns: prosperity, recession,
depression, and recovery.
3-23
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 Godiva
 Expanding Product
Lines During the
Prosperity Stage
 Godiva adds ice
cream to its
product line
3-24
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 Inflation
The devaluation of money by reducing
what it can buy through persistent price
increases.
 Unemployment
The proportion of people in the economy
who do not have jobs and are
actively looking
for work.
3-25
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HotJobs.com helps job
seekers and employers find
each other online
3-26
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 Income
Discretionary
income: the
amount of money
people have to
spend after paying
for necessities
 Online Services
Designed to Meet
the Needs of
Wealthy Consumers
3-27
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 Resource Availability
Demarketing: the process of reducing
consumer demand for a product to a level
that a firm can reasonably supply . . . may
be the result of resource shortages.
3-28
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 The International Economic Environment
Marketers must consider the economic
environment of other nations
Changes in foreign currency rates may
affect marketing decisions
Recessions in one part of the world may be
offset by prosperity in another
3-29
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 Austrian Tourist
Office
 Economic Growth
in Other Countries
Often Means
Increased
Potential Growth
Due to Foreign
Tourists
3-30
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The Technological Environment
 The technological
environment
represents the
application of
knowledge in science,
inventions, and
innovations to
marketing.
 Applying technology
helps Fidelity improve
customer service
3-31
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Applying technology, a
service is created for
consumers to access their
credit report on the WWW
3-32
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The Social-Cultural Environment
 The relationship
between marketing
and society and its
culture
 GardenBurger is a
leader in marketing
meatless products that
satisfy demands of
vegetarians and
health-conscious
consumers
3-33
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 Doritos WOW!
 Frito-Lay Launches
Low-Fat Snacks for
Health-Conscious
Consumers
3-34
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This commercial demonstrates
how the social-cultural
environment influences marketing
and the presentation of a
important issue.
3-35
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 Importance in International Marketing
Decisions
The social-cultural context often exerts a
more pronounced influence on marketing
decisions in the international sphere
3-36
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 Consumerism
John F. Kennedy’s Statement of
Consumer Rights
The right to choose freely
The right to be informed
The right to be heard
The right to be safe
3-37
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Ethical Issues in Marketing
 Marketing ethics:
Marketer’s standards of
conduct and moral
values
 Lorillard Tobacco
Company Launches
Youth Smoking
Prevention Advertising
Campaign
3-38
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
Criticisms of the Competitive Marketing System
 Marketing costs are too high
 The marketing system is inefficient
 Marketers and the business system collude and
commit price-fixing
 Firms deliver poor product quality and service
 Consumers receive incomplete, false, and/or
misleading information
 The marketing system produces health and safety
hazards
 Marketers persuasively promote unwanted and
unnecessary products to those who least need
them
3-39
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Class Discussion
Is the term Marketing Ethics
an oxymoron?
3-40
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 Ethical Problems in Marketing research
Alleged invasions of personal privacy
Gathering marketing information in
exchange for money or free offers
 Ethical Problems in Product strategy
Product quality
Planned obsolescence
Brand similarity
Packaging
3-41
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 Ethical Problems in Distribution strategy
Degree of control over a channel
Should a company maintain distribution in
marginally profitable outlets with no
alternative source of supply
 Ethical Problems in Pricing
Probably the most regulated aspect
Most unethical pricing behavior is also
illegal
3-42
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 Ethical Problems in Promotional strategy
Ethically questionable personal selling
Gifts and bribes
Questionable advertising
Promotion of questionable features
Questionable WWW related promotional
practices
3-43
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Budweiser beer is a leading
spender on television ads
like this one. Are such
expenditures ethical? Would
MADD agree with you?
3-44
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Class
Discussion
This is one of the ads
Camel Cigarettes is
running after dropping
its “Joe Camel” ads
featuring the popular
cartoon camel
character. Is this an
ethical advertisement?
3-45
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Social Responsibility in Marketing
 Marketing philosophies,
policies, procedures, and
actions that have the
enhancement of society’s
welfare as a primary
objective
3-46
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Class Discussion
Benetton’s ads are often controversial. Do you consider
this a Socially Responsible Advertisement?
3-47
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 The Four-Step
Pyramid of
Corporate Social
Responsibility
3-48
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 Budweiser
Advertising Its
Socially Responsible
Hispanic
Scholarship Fund
3-49
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 Socially Responsible Marketing Decisions
Focus on the long-run
Are consumer oriented
Do not infringe on society
Focus on adding value
Set objectives along broad social terms
instead of narrowly defined
products and services
3-50
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Marketing and
Ecology
Planned
obsolescence
Pollution
Recycling
The Ad Council
Promotes
Recycling as a
Social
Responsibility
Issue
3-51
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 America’s Electric
Utility Companies
 Electric Utility
Companies
Promote Their
Efforts
Regarding
Environmental
Protection
3-52
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 Green Marketing
Protection,
promotion, and
reclamation of
environmentally
sensitive
products
 Ford Motor
Company
Promotes Its
Recycling and
Environmental
Efforts
3-53
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