MKT 340 Ch03 ppt

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LO 3-3
LO 3-2
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:
LO 3-1
Explain the purpose of environmental
scanning.
Describe social forces such as
demographics and culture.
Discuss how economic forces affect
marketing.
LO 3-4
Describe how technological changes
can affect marketing.

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LO 3-5
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:
LO 3-6
Discuss the forms of competition
that exist in a market.
Explain how regulatory forces ensure
competition and protect producers and
consumers.
LO 3-7 Identify factors that influence ethical
and unethical marketing decisions.
LO 3-8 Describe the different concepts of
social responsibility.

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HOW DO YOU ATTRACT 1 BILLION CUSTOMERS?
MOVE FAST AND BREAK THINGS!
 Facebook in
the Future
 Facebook and
the Influence of
Environmental
Forces

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

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SOCIAL FORCES
DEMOGRAPHICS—POPULATION
LO 3-2
 Demographics
• World Population
• U.S. Population
 Social Forces
 Population Explosion

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SOCIAL FORCES
DEMOGRAPHICS—GENERATIONAL COHORTS
LO 3-2
 Baby Boomers: 1946 – 1964
 Generation X: 1965 – 1976
 Generation Y: 1977 – 1994
 Generational Marketing
 Millennials: 1995 +

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MAKING RESPONSIBLE DECISIONS
Millennials Are Going to Change the World—
through Environmental Sustainability
LO 3-2

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Prudential, Lufthansa, and Windows Phone
Which generational cohort is being reached?
LO 3-2

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SOCIAL FORCES
DEMOGRAPHICS—RACIAL AND ETHNIC DIVERSITY
LO 3-2
 Composition
 Trends
• African Americans
• Hispanics
• Asian Americans
 Multicultural Marketing

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SOCIAL FORCES
CULTURE
LO 3-2
 Culture: The set of values, ideas, and
attitudes that are learned and shared
among members of a group.
 Sustainability and Environment

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ECONOMIC FORCES
MACROECONOMIC CONDITIONS
LO 3-3
 Economy: Refers to the income and
resources that affect running a
business or household
• Inflation
• Recession

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ECONOMIC FORCES
CONSUMER INCOME
LO 3-3
 Gross Income: Amount made in
one year
 Disposable Income:
Amount left after
paying taxes
 Discretionary
Income: Amount left
after taxes and
necessities

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TECHNOLOGICAL FORCES
TECHNOLOGY OF TOMORROW
LO 3-4
 Technology: Inventions from applied
science or engineering research
• 3D Technologies
• Intelligent Data Collection
• Green Infrastructure
• Connectivity
• Others that Replace or are Substitutes

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Logitech/Skype, Chevy Volt, and Nike Fuel
What products might be replaced by these?
LO 3-4

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TECHNOLOGY’S IMPACT ON CUSTOMER VALUE
LO 3-4
 Plummeting Costs of Technology
 New Products: Thousands of
products each year!
 Change Production of Existing Products
• Recycling: 29% of plastic bottles recycled

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ELECTRONIC BUSINESS TECHNOLOGIES
LO 3-4
 Marketspace:
Electronic exchange
environment
 Electronic
Commerce: Activities that use
electronic communication for
inventory, exchange,
distribution, payment, etc.

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COMPETITIVE FORCES
ALTERNATIVE FORMS OF COMPETITION
LO 3-5
 Competition
• Pure Competition
• Oligopoly
• Pure Monopoly
• Monopolistic Competition

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FIGURE 3-A Continuum of competition

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REGULATORY FORCES
PROTECTING COMPETITION
LO 3-6
 Regulations: Restrictions
places on business
conduct
 Sherman Antitrust Act (1890):
Forbids conspiracies in trade
 Clayton Act (1914): Forbids actions
likely to lessen competition
 Robinson-Patman Act (1936):
Unlawful to discriminate in prices
charged to different purchasers

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REGULATORY FORCES
PROTECTING PRODUCERS AND CONSUMERS
LO 3-6
 Patent Law: Gives inventors
the right to exclude others
from making or selling
patented inventions.
 Copyright Law: Gives author the
exclusive right to that work.
 Digital Millennium Copyright Act
(1998): Protects copyrighted digital
products

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REGULATORY FORCES
LO 3-6
 Consumer Product Safety
Act (1972): Established the …
 Consumer Product Safety Commission
 Consumerism: Grassroots
movement to increase the
influence, power and rights of
consumers

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REGULATORY FORCES
LO 3-6
 Trademarks
 Lanham Act (1946)
• Registration of trademarks, but not ownership
• Can lose trademark if it becomes generic
• Ex: Aspirin and escalator are generic terms

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Band-Aid, ChapStick, Jell-O, Kleenex,
Vaseline, Frisbee, and Q-Tips
Are these brand names or generic trademarks?
LO 3-6

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REGULATORY FORCES
LO 3-6
 FTC Act of 1914
 Laws to Regulate Promotion Practices
• Cease and Desist Orders
• Corrective Advertising
• Deceptive Mail and Enforcement Act (1999)
• Telephone Consumer Protection Act (1991)
• Do Not Call Registry
FTC
Video

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REGULATORY FORCES
LO 3-6
 Laws Restricting Information
Collection and Solicitation
• CAM-SPAM Act (2004)
• FTC’s Do Not Track
 Internet Tax Freedom Act (2007)
 Control Through Self-Regulation
• Children’s Online Privacy
Protection Act (2004)

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UNDERSTANDING ETHICAL
MARKETING BEHAVIOR
LO 3-7
 Ethics:
 The moral principles and
values that guide actions
and decisions of individuals
or groups.

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FIGURE 3-2 A framework for understanding
ethical behavior

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UNDERSTANDING ETHICAL MARKETING BEHAVIOR
SOCIETAL CULTURE AND NORMSLO 3-7
• Are Relative to particular societies
• Affect Ethical and Legal Relationships
 Culture: Values, ideas, and attitudes
learned and shared among members
of a group
 Societal Values and Attitudes:

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BUSINESS CULTURE AND INDUSTRY PRACTICESLO 3-7
 Business Culture: The effective
rules and boundaries between
competitive and unethical behavior
 Ethics of Exchange
• Caveat Emptor
• Consumer Bill of Rights (1962): The Right
 To Safety
 To Be Informed
 To Choose
 To Be Heard

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UNDERSTNDING ETHICAL MARKETING BEHAVIOR
 The Right to Safety
• Consumer Product
Safety Commission
 The Right to Be Informed
• Federal Trade
Commission (FTC)
Consumer Product
Safety Commission
Federal Trade
Commission

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 The Right to Choose
 The Right to Be Heard
• Slotting Allowances
• Do Not Call Registry

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ETHICAL MARKETING BEHAVIOR
BUSINESS CULTURE AND INDUSTRY PRACTICES
LO 3-7
 Ethics of Competition
• Economic Espionage:
• Clandestine collection of trade secrets
• Bribes and Kickbacks:
• In industries with intense competition and
during early stages of economic development

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MAKING RESPONSIBLE DECISIONS
Corporate Conscience in the Cola War
LO 3-7

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CORPORATE CULTURE AND EXPECTATIONSLO 3-7
 Corporate Culture:
Values and attitudes
shared among
members
 Code of Ethics: Formal
statement of principles
and rules of conduct
 Ethical Behavior of Top Management
and Co-Workers influences
employees
• Whistle-Blowers

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FIGURE 3-3 American Marketing Association
Statement of Ethics (abridged)

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PERSONAL MORAL PHILOSOPHY AND ETHICSLO 3-7
 Moral Idealism: Considers
certain individual rights or
duties as universal,
regardless of
consequences
 Utilitarianism: Focuses on the
greatest good for the greatest
number (benefits must exceed costs)

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UNDERSTANDING SOCIAL RESPONSIBILITY IN
MARKETING
THREE CONCEPTS OF SOCIAL RESPONSIBILITY
LO 3-8
 Social Responsibility
• Stakeholder Responsibility
• Societal Responsibility
• Profit Responsibility

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FIGURE 3-4 Three concepts of social
responsibility

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UNDERSTANDING SOCIAL RESPONSIBILITY IN
MARKETING
THREE CONCEPTS OF SOCIAL RESPONSIBILITY
LO 3-8
 Social Responsibility
• Green Marketing: Environmental products
• Cause Marketing: Charitable contributions
• Triple-Bottom Line: People, planet, profit
P & G

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MARKETING MATTERS
Will Consumers Switch Brands for a Cause?
Yes, if …
LO 3-8
Cause Marketing

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TOYOTA: BUILDING CLEANER,
GREENER CARS
VIDEO CASE 3
Toyota
Video Case

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

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VIDEO CASE 3
Toyota
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?

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VIDEO CASE 3
Toyota
2. How does Toyota’s view of
sustainable mobility contribute to
the company’s overall mission?

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VIDEO CASE 3
Toyota
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 3
Toyota
4. What future activities would you
suggest for Toyota as it strives to
improve its reputation?

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AN ENVIRONMENTAL SCAN
FOR TRUVÍA
IN-CLASS ACTIVITY 3-1

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ICA 3-1
Environmental Scanning
What is
Truvía? Truvía
Ad
Example:
Truvia

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COMPETITIVE
INTELLIGENCE

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WHAT IS ETHICAL AND
WHAT IS NOT: A SURVEY
OF YOUR OPINIONS

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THE ETHICS OF
COMPETITIVE INTELLIGENCE

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ICA 3-4
Scenario 1: Documents Left Behind at a Hotel
You become aware that your
competitor has its board meeting at
a certain hotel, so you drop by that
hotel towards the end of the day
to see what documents someone
had left behind.

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ICA 3-4
Scenario 2: Airplane Conversation
You are sitting in an airplane and
overhear a competitor state to his
friend information that appears to
be confidential. Neither individual
knows who you are or that you
overheard them.

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ICA 3-4
Scenario 3: Trade Show and Badge Removal
You are attending a trade show.
You take off your badge that
identifies you as a competitor, and
you then approach a booth. You
tell the representative that you have
an interest in the product.

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ICA 3-4
Scenario 4: Entering a Private Suite
You are attending a trade show.
You take off your badge that
identifies you as a competitor,
and you then enter a private suite
that is labeled “For Clients of
Company X Only.”

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ICA 3-4
Scenario 5: Dumpster Diving
A competitor hired by Proctor &
Gamble went through the trash
Outside Unilever’s Chicago office
and obtained classified information
on an Unilever hair care product.
When P&G found out about the
incident conducted on its behalf,
it informed Unilever.

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Environmental Scanning
Environmental scanning is the
process of continually acquiring
information on events occurring
outside the organization to identify
and interpret potential trends.

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Social Forces
Social forces are the
demographic characteristics of
the population and its culture.

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Demographics
Demographics describe a
population according to selected
characteristics such as age,
gender, ethnicity, income, and
occupation.

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Baby Boomers
Baby boomers include the
generation of 76 million children
born between 1946 and 1964.

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Generation X
Generation X includes the 50
million people born between 1965
and 1976. Also called the baby
bust.

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Generation Y
Generation Y includes the 72
million Americans born between
1977 and 1994. Also called the
echo-boom or baby boomlet.

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Blended Family
A blended family is a family
formed by merging two previously
separated units into a single
household.

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Multicultural Marketing
Multicultural marketing consists
of combinations of the marketing
mix that reflect the unique
attitudes, ancestry, communication
preferences, and lifestyles of
different races.

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Culture
Culture consists of the set of
values, ideas, and attitudes that
are learned and shared among
the members of a group.

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Value Consciousness
Value consciousness is the
concern for obtaining the best
quality, features, and performance
of a product or service for a given
price that drives consumption
behavior.

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Economy
The economy pertains to the
income, expenditures, and
resources that affect the cost of
running a business and
household.

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Gross Income
Gross income is the total amount
of money made in one year by a
person, household, or family unit.
Also known as money income at
the Census Bureau.

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Disposable Income
Disposable income is the money
a consumer has left after paying
taxes to use for necessities such
as food, housing, clothing, and
transportation.

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Discretionary Income
Discretionary income is the
money that remains after paying
for taxes and necessities.

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Technology
Technology consists of the
inventions or innovations from
applied science or engineering
research.

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Marketspace
Marketspace is an information-
and communication-based
electronic exchange environment
mostly occupied by sophisticated
computer and telecommunication
technologies and digitized
offerings.

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Electronic Commerce
Electronic commerce is any
activity that uses some form of
electronic communication in the
inventory, exchange,
advertisement, distribution, and
payment of products and services.

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Competition
Competition consists of the
alternative firms that could provide
a product to satisfy a specific
market’s needs.

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Barriers to Entry
Barriers to entry are business
practices or conditions that make
it difficult for new firms to enter
the market.

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Regulation
Regulation consists of the
restrictions state and federal laws
place on business with regard to
the conduct of its activities.

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Consumerism
Consumerism is a grassroots
movement started in the 1960s
to increase the influence, power,
and rights of consumers in
dealing with institutions.

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Self-Regulation
Self-regulation is an alternative
to government control where an
industry attempts to police itself.

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Ethics
Ethics are the moral principles
and values that govern the actions
and decisions of an individual or
group.

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Laws
Laws are society’s values and
standards that are enforceable
in the courts.

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Caveat Emptor
Caveat emptor is the legal
concept of “let the buyer beware”
that was pervasive in the
American business culture before
the 1960s.

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Consumer Bill of Rights (1962)
The Consumer Bill of Rights
(1962) is a law that codified the
ethics of exchange between
buyers and sellers, including the
rights to safety, to be informed,
to choose, and to be heard.

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Economic Espionage
Economic espionage is the
clandestine collection of trade
secrets or proprietary information
about a company’s competitors.

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Code of Ethics
A code of ethics is a formal
statement of ethical principles
and rules of conduct.

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Whistle-Blowers
Whistle-blowers are employees
who report unethical or illegal
actions of their employers.

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Moral Idealism
Moral idealism is a personal
moral philosophy that considers
certain individual rights or duties
as universal, regardless of the
outcome.

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Utilitarianism
Utilitarianism is a personal moral
philosophy that focuses on the
“greatest good for the greatest
number” by assessing the costs
and benefits of the consequences
of ethical behavior.

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Social Responsibility
Social responsibility is the idea
that organizations are part of a
larger society and are accountable
to that society for their actions.

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Triple-Bottom Line
The triple-bottom line is the
recognition of the need for
organizations to improve the
state of people, the planet, and
profit simultaneously if they are
to achieve sustainable, long-term
growth.

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Green Marketing
Green marketing consists of
marketing efforts to produce,
promote, and reclaim
environmentally sensitive
products.

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Cause Marketing
Cause marketing occurs when
the charitable contributions of a
firm are tied directly to the
customer revenues produced
through the promotion of one of
its products.

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Social Audit
A social audit consists of a
systematic assessment of a firm’s
objectives, strategies, and
performance in terms of social
responsibility.

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Sustainable Development
Sustainable development
involves conducting business
in a way that protects the natural
environment while making
economic progress.

MKT 340 Ch03 ppt

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MKT 340 Ch03 ppt