1. McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Explain the purpose of environmental scanning.
LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:
LO1
Explain the purpose of environmental scanning.
LO2
Describe social forces such as demographics and culture.
LO3
Discuss how economic forces affect marketing.
LO4
Describe how technological changes can affect marketing.
3-2

3. Discuss the forms of competition that exist in a market.
LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:
LO5
Discuss the forms of competition that exist in a market.
Explain how regulatory forces ensure competition and protect producers and consumers.
LO6
LO7
Identify factors that influence ethical and unethical marketing decisions.
LO8
Describe the different concepts of social responsibility.
3-3

4. WHAT IS THE WORLD’S THIRD LARGEST NATION
WHAT IS THE WORLD’S THIRD LARGEST NATION? THE SOCIAL NATION CREATED BY FACEBOOK!
3-4

5. FIGURE 3-1 Environmental forces affect the organization, its suppliers, and its customers
3-5

6. DEMOGRAPHICS—POPULATION
SOCIAL FORCES
DEMOGRAPHICS—POPULATION
LO2
Environmental Scanning
Social Forces
Demographics
Population at a Glance
Population Explosion
U.S. Population
3-6

7. DEMOGRAPHICS—GENERATIONAL COHORTS
SOCIAL FORCES
DEMOGRAPHICS—GENERATIONAL COHORTS
LO2
Baby Boomers:
Generation X:
Generation Y:
Millennials: 1995+
3-7

8. Ameritrade, American Airlines, and HTC Which generational cohort is being reached?
LO2
3-8

9. MAKING RESPONSIBLE DECISIONS Millennials Are Going to Change the World!
LO2
3-9

10. DEMOGRAPHICS—RACIAL & ETHNIC DIVERSITY
SOCIAL FORCES
DEMOGRAPHICS—RACIAL & ETHNIC DIVERSITY
LO2
Composition
Trends
African Americans
Hispanics
Asian Americans
Multicultural Marketing
3-10

11. DEMOGRAPHICS—THE AMERICAN HOUSEHOLD
SOCIAL FORCES
DEMOGRAPHICS—THE AMERICAN HOUSEHOLD
LO2
Marital Status
Cohabitation
Blended Family
3-11

12. DEMOGRAPHICS—POPULATION SHIFTS
SOCIAL FORCES
DEMOGRAPHICS—POPULATION SHIFTS
LO2
Regional Shifts in the U.S.: 2012
3-12

13. DEMOGRAPHICS—POPULATION SHIFTS
SOCIAL FORCES
DEMOGRAPHICS—POPULATION SHIFTS
LO2
Shifts Within States
Rural
Cities
Suburbs
Exurbs
3-13

14. DEMOGRAPHICS—POPULATION SHIFTS
SOCIAL FORCES
DEMOGRAPHICS—POPULATION SHIFTS
LO2
Statistical Areas (SA): Illinois
Combined SA: NE Illinois
Micropolitan SA: Dixon, IL
Metropolitan SA: St. Louis, MO & SW IL
Metropolitan Division: Chicagoland
3-14

15. SOCIAL FORCES
CULTURE
LO2
Culture
Cultural Values
3-15

16. MACROECONOMIC CONDITIONS
ECONOMIC FORCES
MACROECONOMIC CONDITIONS
LO3
Economy
Inflation
Recession
3-16

17. ECONOMIC FORCES Gross Income Disposable Income Discretionary Income
CONSUMER INCOME
LO3
Gross Income
Disposable Income
Discretionary Income
3-17

18. TECHNOLOGY OF TOMORROW
TECHNOLOGICAL FORCES
TECHNOLOGY OF TOMORROW
LO4
Technology
Social Networks
Natural User Interfaces
Green Infrastructure
Biotechnology
Tablet Devices, Etc.
3-18

19. IMPACT ON CUSTOMER VALUE
TECHNOLOGICAL FORCES
IMPACT ON CUSTOMER VALUE
LO4
Impact on Customer Value
Plummeting Costs
New Products
Marketspace
Electronic Commerce
3-19

20. New Yorker, GoToMeeting, and Spot Connect What products might be replaced with these?
LO4
3-20

21. ALTERNATIVE FORMS OF COMPETITION
COMPETITIVE FORCES
ALTERNATIVE FORMS OF COMPETITION
LO5
Competition
Pure Competition
Monopolistic Competition
Oligopoly
Pure Monopoly
3-21

22. FIGURE 3-A Continuum of competition
3-22

23. Protecting Competition
REGULATORY FORCES
FEDERAL LEGISLATION
LO6
Regulation
Protecting Competition
Sherman Antitrust Act (1890)
Clayton Act (1914)
Robinson-Patman Act (1936)
3-23

24. Protecting Producers and Consumers
REGULATORY FORCES
FEDERAL LEGISLATION
LO6
Protecting Producers and Consumers
Patent Law
Copyright Law
Digital Millennium Copyright Act (1998)
Nutritional Labeling
3-24

25. Protecting Producers and Consumers
REGULATORY FORCES
FEDERAL LEGISLATION
LO6
Protecting Producers and Consumers
Consumer Product Safety Act (1972)
Consumer Product Safety Commission
Consumerism
3-25

26. Protecting Producers and Consumers
REGULATORY FORCES
FEDERAL LEGISLATION
LO6
Protecting Producers and Consumers
Price Fixing
Price Discounting
3-26

27. Protecting Producers and Consumers
REGULATORY FORCES
FEDERAL LEGISLATION
LO6
Protecting Producers and Consumers
Federal Trade Commission Act of 1914
Cease and Desist Order
Corrective Advertising
CAN-SPAM Act (2004)
Do Not Call Registry
3-27

28. Protecting Producers and Consumers
REGULATORY FORCES
FEDERAL LEGISLATION
LO6
Protecting Producers and Consumers
Exclusive Dealing
Requirement Contracts
Exclusive Territorial Distributorships
Tying Arrangement
3-28

29. Protecting Producers and Consumers
REGULATORY FORCES
FEDERAL LEGISLATION
LO6
Protecting Producers and Consumers
Landham Act (1946)
Trademark Law Revision Act (1988)
Madrid Protocol (2003)
U.S. Supreme Court: Trademark Colors
Federal Dilution Act (1995)
Control Through Self-Regulation
3-29

30. Band-Aid, ChapStick, Jell-O, Kleenex, Vaseline, Frisbee, and Q-Tips Are these brand names generic trademarks?
LO6
3-30

31. ETHICAL MARKETING BEHAVIOR SOCIETAL CULTURE AND NORMS
LO7
Ethics
Laws
Current Perceptions of Ethical Behavior
Culture
3-31

32. FIGURE 3-2 A framework for understanding ethical behavior
3-32

33. ETHICAL MARKETING BEHAVIOR BUSINESS CULTURE AND INDUSTRY PRACTICES
LO7
Business Cultures
Ethics of Exchange
Caveat Emptor
Consumer Bill of Rights (1962): The Right
To Safety
To Choose
To Be Informed
To Be Heard
3-33

34. ETHICAL MARKETING BEHAVIOR BUSINESS CULTURE AND INDUSTRY PRACTICES
LO7
Ethics of Competition
Economic Espionage
Bribes and Kickbacks
3-34

35. MAKING RESPONSIBLE DECISIONS Corporate Conscience in the Cola War
LO7
3-35

36. ETHICAL MARKETING BEHAVIOR CORPORATE CULTURE AND EXPECTATIONS
LO7
Corporate Culture
Code of Ethics
Ethical Behavior of Top Management and Co-Workers
Whistle-Blowers
3-36

37. FIGURE 3-B American Marketing Association Statement of Ethics (abridged)
3-37

38. ETHICAL MARKETING BEHAVIOR PERSONAL MORAL PHILOSOPHY AND ETHICS
Moral Idealism
Nestlé’s Gerber Good Start Infant Formula
Utilitarianism
3-38

39. Social Responsibility
SOCIAL RESPONSIBILITY IN MARKETING
THREE CONCEPTS OF SOCIAL RESPONSIBILITY
LO8
Social Responsibility
Profit Responsibility
Stakeholder Responsibility
Societal Responsibility
3-39

40. FIGURE 3-C Three concepts of social responsibility
3-40

41. Societal Responsibility
SOCIAL RESPONSIBILITY IN MARKETING
THREE CONCEPTS OF SOCIAL RESPONSIBILITY
LO8
Societal Responsibility
Triple-Bottom Line
Green Marketing
Häagen- Dazs
Cause Marketing
3-41

42. MARKETING MATTERS Will Consumers Switch Brands for a Cause? Yes, If…
LO8
3-42

43. SOCIAL RESPONSIBILITY IN MARKETING SUSTAINABLE DEVELOPMENT
Social Audit
Sustainable Development
3-43

44. TOYOTA: BUILDING CLEANER, GREENER CARS
VIDEO CASE 3
3-44

45. FIGURE 1 Who should take the lead in addressing environmental issues?
3-45

46. 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)?
3-46

47. VIDEO CASE 3
Toyota
2. How does Toyota’s view of sustainable mobility contribute to the company’s overall mission?
3-47

48. VIDEO CASE 3
Toyota
3. Has Toyota’s National Parks project been a success? What indicators suggest that the project has had an impact?
3-48

49. VIDEO CASE 3
Toyota
4. What future activities would you suggest for Toyota as it strives to improve its reputation?
3-49

50. Environmental Scanning
Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.
3-50

51. Social Forces
Social forces are the demographic characteristics of the population and its values.
3-51

52. Demographics
Demographics describe a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.
3-52

53. Baby Boomers
Baby boomers consist of the generation of children born between 1946 and 1964.
3-53

54. Generation X
Generation X includes the 15 percent of the population born between 1965 and Also called baby bust.
3-54

55. Generation Y
Generation Y includes the 72 million Americans born between 1977 and Also called echo-boom or baby boomlet.
3-55

56. Culture
Culture consists of the set of values, ideas, and attitudes that are learned and shared among the members of a group.
3-56

57. Economy
The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.
3-57

58. Technology
Technology consists of the inventions or innovations from applied science or engineering research.
3-58

59. Marketspace
Marketspace is an information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings.
3-59

60. Competition
Competition consists of the alternative firms that could provide a product to satisfy a specific market’s needs.
3-60

61. Regulation
Regulation consists of the restrictions state and federal laws place on business with regard to the conduct of its activities.
3-61

62. Consumerism
Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.
3-62

63. Self-Regulation
Self-regulation is an alternative to government control where an industry attempts to police itself.
3-63

64. Ethics
Ethics are the moral principles and values that govern the actions and decisions of an individual or group.
3-64

65. 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.
3-65

66. Code of Ethics
A code of ethics is a formal statement of ethical principles and rules of conduct.
3-66

67. Moral Idealism
Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
3-67

68. 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.
3-68

69. Social Responsibility
Social responsibility is the idea that organizations are part of a larger society and are accountable to that society for their actions.
3-69

70. Green Marketing
Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.
3-70

71. 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.
3-71

72. Sustainable Development
Sustainable development consists of conducting business in a way that protects the natural environment while making economic progress.
3-72