Understanding the Marketing

Environment, Ethical Behavior,

and Social Responsibility

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 LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:
(1 of 2)

1. Explain the purpose of environmental

scanning.
2. Describe social forces such as
demographics and culture.
3. Discuss how economic forces affect
marketing.
4. Describe how technological changes can
affect marketing.

©McGraw-Hill Education.
 LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:
(2 of 2)

5. Discuss the forms of competition

that exist in a market.
6. Explain how regulatory forces
ensure competition and protect
producers and consumers.
7. Identify factors that influence ethical
and unethical marketing decisions.
8. Describe the different concepts of
social responsibility.

©McGraw-Hill Education.
 IS “CONNECTING THE WORLD” AN AMBITIOUS
VISION? NOT IF YOU ARE FACEBOOK!

• 1.65 Billion Active

Users = 20% of
World Population
• Environmental
Forces Influence
Facebook
• Facebook in the
Future?
Facebook Video

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 FIGURE 3-1 Environmental forces affect the
organization, its suppliers, and its customers.

Jump to Appendix 1 long imag

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e description
 ENVIRONMENTAL SCANNING

• Environmental Scanning
• What Trends Might Affect Marketing in
the Future?
– Examples:
• Video Bloggers
• Increasing Mobility and Connectivity
• Net Neutrality
• Etc…

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 SOCIAL FORCES
DEMOGRAPHICS — WORLD POPULATION

• Social Forces
• Demographics
• World Population–7.4 Billion, Growing
to 9.8 Billion by 2050!
– India Will Have Largest Population in
World in 2050–1.66 Billion People
– China Will Have 1.36 Billion People
– Declining Populations in Japan, Russia,
and Germany
World Population
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 SOCIAL FORCES
GENERATIONAL COHORTS

• Baby Boomers: 1946–1964

– Retiring at Rate of 10,000 Every 24 Hrs.
– All Will Be 65+ by 2030
• Generation X: 1965–1976
– 50 Million People
• Generation Y (Millennials): 1977–1994
– 72 Million People

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 Transamerica, Singapore Airlines, Samsung:
Which generational cohort is being reached?

Transamerica Singapore Airlines Samsung

Jump to Appendix 2 long imag
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e description
 MAKING RESPONSIBLE DECISIONS
Millennials Are a Force for Good

• A Nonprofit for Millennial

Students
• “Use Business to Improve the
World”
• “Green” Jobs and Responsible
Organizations

Net Impact
Website

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 SOCIAL FORCES
DEMOGRAPHICS—RACIAL AND ETHNIC DIVERSITY

• Composition
• Trends
– African Americans
– Hispanics
– Asian Americans
• Multicultural Marketing
U.S. Census Bureau

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 SOCIAL FORCES
CULTURE—CHANGING VALUES

• Culture–Values, Ideas,
and Attitudes Shared
by Members of a
Group
• Values

Brita
Video

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 ECONOMIC FORCES
MACROECONOMIC CONDITIONS

• Economy–Income, Expenditures,
Resources
• Macroeconomics–Performance of the
Economy based on Indicators (Ex:
GDP, Inflation, Deflation, etc.)

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 ECONOMIC FORCES
CONSUMER INCOME

• Microeconomics–Ability of Consumers
to Buy
• Gross Income
• Disposable Income
• Discretionary Income

Jump to Appendix 3 long imag

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e description
 TECHNOLOGICAL FORCES
TECHNOLOGY OF TOMORROW

• Technology
– Connectivity
– Intelligent Data Collection
– Green Infrastructure
– 3D Technologies
– Others that Replace or Are Substitutes

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 FRA/Newscom, Tesla, Apple Pay:
What products might be replaced by these?

Next Issue App Tesla Website Apple Pay

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 TECHNOLOGICAL FORCES
TECHNOLOGY’S IMPACT ON CUSTOMER VALUE

• Plummeting Costs
• New Focus on Quality, Service,
Relationships
• Thousands of New Products
• Change Production of Existing
Products
• Recycling

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 TECHNOLOGICAL FORCES
TECHNOLOGY ENABLES DATA ANALYTICS

• Marketspace
• Electronic Commerce
• Internet of Things

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 COMPETITIVE FORCES
ALTERNATIVE FORMS OF COMPETITION

• Competition
– Pure Competition–Many Sellers
– Monopolistic Competition–Many Sellers
With Substitutable Products
– Oligopoly–Few Sellers
– Pure Monopoly–Only One Seller

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 FIGURE 3-A Continuum of Competition
Many Number of Sellers–One Seller

Basis of Pure Monopolistic Oligopoly Monopoly

Comparison Competition Competition

No. of Sellers Large number of Large number of A few large Single producer
sellers sellers competitors

Product Similar products Unique but Similar products Unique and

Differences substitutable unsubstitutable

Importance of Place Pricing is Promotion is key Unimportant

Marketing Mix (distribution) is important to achieve
important perceived
product
differences

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 REGULATORY FORCES
PROTECTING COMPETITION

• Regulation
• Sherman Antitrust Act (1890)
• Clayton Act (1914)
• Robinson-Patman Act (1936)

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 REGULATORY FORCES
PROTECTING PRODUCERS AND CONSUMERS

• Patent Law
• Copyright Law
• Digital Millennium Copyright Act (1998)
• Child Protection Act (1966)
• Nutritional Labeling and Education Act
(1990)
• Consumer Product Safety Act (1972)

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 REGULATORY FORCES
PROTECTING PRODUCERS AND CONSUMERS

• Consumerism
• FTC Act of 1914
• Deceptive Mail Prevention and
Enforcement Act (1999)
• Telephone Consumer Protection Act
(1991)

FTC Video

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 REGULATORY FORCES
PROTECTING PRODUCERS AND CONSUMERS

• Controlling the Assault of Non-Solicited

Pornography and Marketing (CAN-
SPAM) Act (2004)
• Lanham Act (1946)

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 Band-Aid, ChapStick, Jell-O, Kleenex,
Vaseline, Frisbee, and Q-Tips:
Are these brand names generic trademarks?

©McGraw-Hill Education.
 REGULATORY FORCES
CONTROL THROUGH SELF-REGULATION

• Alternative to Government Control:

– Control through Self-Regulation
• Better Business Bureau (BBB)
– Industry Attempts to Police Itself

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 NATURE AND SIGNIFICANCE OF
MARKETING ETHICS

• Ethics–The Moral Principles and Values

that Govern the Actions and Decisions
of an Individual or Group
• Numerous Factors Influence Ethical
Marketing Behavior

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 FIGURE 3-2 A framework for understanding
ethical behavior.

Jump to Appendix 4 long imag

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e description
 ETHICAL MARKETING BEHAVIOR
SOCIETAL CULTURE AND NORMS

• Culture–learned and shared

• Societal Values and Attitudes
– Are Relative
– Affect Ethical and Legal Relationships

©McGraw-Hill Education.
 ETHICAL MARKETING BEHAVIOR
BUSINESS CULTURE AND INDUSTRY PRACTICES

• Business Culture
• Ethics of Exchange
• Caveat Emptor
• Consumer Bill of Rights (1962)
– The Right
• To Safety
• To Choose
• To Be Informed
• To Be Heard

©McGraw-Hill Education.
 ETHICAL MARKETING BEHAVIOR
BUSINESS CULTURE AND INDUSTRY PRACTICES

• Ethics of Competition
• Business Culture Affects Ethical
Behavior in Competition
• Economic Espionage
• Bribes and Kickbacks

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 MAKING RESPONSIBLE DECISIONS
CORPORATE CONSCIENCE IN THE COLA WAR

“Hey, Pepsi,
want to buy
Coke’s
marketing plan
for its new
product?”

©McGraw-Hill Education.
 ETHICAL MARKETING BEHAVIOR
CORPORATE CULTURE AND EXPECTATIONS

• Corporate Culture
• Code of Ethics
• Ethical Behavior of Top Management
and Co-Workers
– Whistle-Blowers
AMA Ethics

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 ETHICAL MARKETING BEHAVIOR
PERSONAL MORAL PHILOSOPHY AND ETHICS

• Moral Idealism
– Ex: 3M’s
Scotchgard
• Utilitarianism
– “The Greatest
Good for the
Greatest Number”

©McGraw-Hill Education.
 SOCIAL RESPONSIBILITY IN MARKETING
THREE CONCEPTS OF SOCIAL RESPONSIBILITY

• Social Responsibility
1. Profit Responsibility: Obligation to
Maximize Profits for Stockholders
2. Stakeholder Responsibility: Obligations
to Those Who Can Affect Achievement of
Objectives
3. Societal Responsibility: Obligations to
Preserve Environment and to the General
Public

©McGraw-Hill Education.
 SOCIAL RESPONSIBILITY IN MARKETING
THREE CONCEPTS OF SOCIAL RESPONSIBILITY
(2 of 2)

• Social Responsibility
– Triple-Bottom Line: People, Planet, Profit
– Green Marketing
– Cause Marketing

P&G Video

©McGraw-Hill Education.
 MARKETING MATTERS
Will Consumers Switch Brands for a Cause?
Yes, if …

• More than $12 Billion

Raised in 2013
• 85% of Consumers
Have Favorable Opinion
of Companies that
Support Their Causes
• 80% will Switch Brands

Cause Marketing
Forum
©McGraw-Hill Education.
 SUSTAINABLE DEVELOPMENT:
DOING WELL BY DOING GOOD

• Sustainable Development
• Conduct Business to Protect the
Environment While Making Economic
Progress
• 90% of U.S. Citizens are Concerned
about Working Conditions Outside the
U.S.
Häagen-
Dasz

©McGraw-Hill Education.
 VIDEO CASE 3
TOYOTA: BUILDING CLEANER,
GREENER CARS

Toyota
Video Case

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 FIGURE 1 Who should take the lead in
addressing environmental issues?

Jump to Appendix 5 long imag

©McGraw-Hill Education.
es description
 VIDEO CASE 4
Toyota (1 of 4)

1. How does Toyota’s approach

to social responsibility relate to the
three concepts of social
responsibility described in the text
(profit responsibility, stakeholder
responsibility, and societal
responsibility)?

©McGraw-Hill Education.
 VIDEO CASE 4
Toyota (2 of 4)

2. How does Toyota’s view of

sustainable mobility contribute to the
company’s overall mission?

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 VIDEO CASE 4
Toyota (3 of 4)

3. Has Toyota’s National Parks project

been a success? What indicators
suggest that the project has had an
impact?

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 VIDEO CASE 4
Toyota (4 of 4)

4. What future activities would you

suggest for Toyota as it strives to
improve its reputation?

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 IN-CLASS ACTIVITY 3-1

AN ENVIRONMENTAL SCAN
FOR TRUVÍA

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 ICA 3-1
Truvía

Environmental Scanning

– What is Truvía?

– Truvía Ad

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 Environmental Scan

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 IN-CLASS ACTIVITY 3-2

COMPETITIVE INTELLIGENCE

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 Competitive Intelligence Brief Handout

Fuld & Company

Website

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