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

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Presentation on theme: "McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved."— Presentation transcript:

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

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

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


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

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

7 Baby Boomers: Baby Boomers: Generation X: Generation X: Generation Y: Generation Y: Millennials: SOCIAL FORCES DEMOGRAPHICSGENERATIONAL COHORTS LO2 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 Composition Trends SOCIAL FORCES DEMOGRAPHICSRACIAL & ETHNIC DIVERSITY LO2 African Americans Hispanics Asian Americans Multicultural Marketing 3-10

11 Marital Status Cohabitation Blended Family SOCIAL FORCES DEMOGRAPHICSTHE AMERICAN HOUSEHOLD LO2 3-11


13 Shifts Within States SOCIAL FORCES DEMOGRAPHICSPOPULATION SHIFTS LO2 Rural Suburbs Exurbs Cities 3-13

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

15 SOCIAL FORCES CULTURE LO2 Culture Cultural Values 3-15


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

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

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

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

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

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

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

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

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

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

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

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

29 Trademark Law Revision Act (1988) Landham Act (1946) Federal Dilution Act (1995) U.S. Supreme Court: Trademark Colors REGULATORY FORCES FEDERAL LEGISLATION LO6 Protecting Producers and Consumers Control Through Self-Regulation Control Through Self-Regulation Madrid Protocol (2003) 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 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 Consumer Bill of Rights (1962): The Right To Safety To Be Informed To Choose 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 FIGURE 3-B American Marketing Association Statement of Ethics (abridged) 3-37

38 ETHICAL MARKETING BEHAVIOR PERSONAL MORAL PHILOSOPHY AND ETHICS LO7 Moral Idealism Utilitarianism Nestlés Gerber Good Start Infant Formula 3-38

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

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

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

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

43 SOCIAL RESPONSIBILITY IN MARKETING SUSTAINABLE DEVELOPMENT LO8 Social Audit Sustainable Development Sustainable Development 3-43


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

46 VIDEO CASE 3 Toyota 1. How does Toyotas 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 Toyotas view of sustainable mobility contribute to the companys overall mission? 3-47

48 VIDEO CASE 3 Toyota 3. Has Toyotas 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

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 markets 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

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