1. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.1 MKTG Social Responsibility, Ethics, and the Marketing Environment 3 CHAPTER

2. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.2 Environmental Scanning The collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. Environmental Scanning Environmental Scanning

3. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.3 THE COMPETITIVE ENVIRONMENT  Competitive Environment: The interactive process that occurs in the marketplace among marketers of directly competitive products, marketers of products that can be substituted for one another, and marketers competing for the consumer’s purchasing power.

4. Chapter 3Copyright ©2009 Cengage Learning Inc. All rights reserved.4 Corporate Social Responsibility The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time. Sustainability

5. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.5 REVIEW LEARNING OUTCOME LO 1 Corporate Social Responsibility Ethical Legal Economi c Philanthropic Be profitable. Obey the Law. Do what is right. Be a good citizen.

6. Chapter 3Copyright ©2009 Cengage Learning Inc. All rights reserved.6 Ethical Behavior in Business Ethics Morals The moral principles or values that generally govern the conduct of an individual. The rules people develop as a result of cultural values and norms.

7. Chapter 3Copyright ©2009 Cengage Learning Inc. All rights reserved.7 Code of Ethics LO 2 A guideline to help marketing managers and other employees make better decisions. Code of Ethics http://www.ethicsweb.ca Online

8. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.8 External Marketing Environment LO 3 Demographics Social Change Social Change Economic Conditions Economic Conditions Political & Legal Factors Political & Legal Factors Technology Competition Environmental Scanning Target Market External Environment (uncontrollable) Ever-Changing Marketplace Product Distribution Promotion Price Product Distribution Promotion Price Internal (within the organization) Marketing mix

9. Chapter 3Copyright ©2010Cengage Learning Inc. All rights reserved.9 Target Market LO 3 A defined group most likely to buy a firm’s product. Target Market

10. Chapter 3Copyright ©2009 Cengage Learning Inc. All rights reserved.10 Social Factors Social Factors Influence: Products purchased Prices paid for products Effectiveness of promotions How, where, and when people purchase

11. Chapter 3Copyright ©2009 Cengage Learning Inc. All rights reserved.11 LO 4 Component Lifestyles Component Lifestyles Component Lifestyles The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.

12. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.12 REVIEW LEARNING OUTCOME LO 4 Social Factors that Affect Marketing

13. Chapter 3Copyright ©2009 Cengage Learning Inc. All rights reserved.13 Demographic Factors LO 5 Demography The study of people’s vital statistics, such as their age, race and ethnicity, and location.

14. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.14 LO 5 Current Demographic Trends Age Tweens 8 to 14 yrs 29 million Gen Y 1979-1994 60 million Gen X 1965-1978 40 million Baby Boom 1946-1964 77 million

15. Chapter 3Copyright ©2010Cengage Learning Inc. All rights reserved.15 Growing Ethnic Markets LO 6  Spending power of ethnic markets by 2011:  Hispanics: $1.2 trillion  African Americans: $921 billion  Asian Americans: $526 billion  Diversity can result in bottom-line benefits to companies.

16. Chapter 3Copyright ©2010Cengage Learning Inc. All rights reserved.16 Marketing to Hispanic Americans LO 6  The population’s diversity creates challenges for targeting this group.  Hispanics tend to be brand loyal, but are not aware of many U.S. brands.  Nearly half of adult U.S. Hispanics have home Internet access.

17. Chapter 3Copyright ©2010Cengage Learning Inc. All rights reserved.17 Marketing to African Americans LO 6  Many firms are creating products for the African American market.  Promotional dollars and media choices directed toward African Americans continue to increase.

18. Chapter 3Copyright ©2010Cengage Learning Inc. All rights reserved.18 Marketing to Asian Americans LO 6  Younger, better educated, and have highest average income of all groups  Many products have been developed for Asian American market.  Cultural diversity within the Asian American market complicates promotional efforts.

19. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.19 Economic Factors LO 7 Distribution of Consumer Income Inflation Recession

20. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.20 Consumers’ Incomes LO 7  Median U.S. household income in 2008 was $49,000  Incomes have risen at a slow pace.  Education is the primary determinant of earning potential.  Consumers are strapped for cash.

21. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.21 The Financial Power of Women LO 7  Women bring in half of the household income.  Women control 51.3 percent of the private wealth in the U.S.  Women control 80 percent of household spending.  Women are now the primary buyers in male-dominated categories: 68% of new cars 66% of computers 60% of home improvements 53% of investments 51% of consumer electronics

22. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.22 Purchasing Power LO 7 A comparison of the relative cost of a set standard of goods and services in different geographic areas. Purchasing Power Purchasing Power

23. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.23 Economic Environment Buying Power and Income:  Gross Income – Pre-Tax Income  Disposable Income – After-Tax Income used for basic monthly expenses (food, clothing & shelter)  Discretionary Income – The money used for savings and fun

24. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.24 Inflation LO 7 A measure of the decrease in the value of the money, expressed as the percentage reduction in value since the previous year. Inflation

25. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.25 Business Cycles  Cyclical patterns consisting of the stages of prosperity, recession, depression, and recovery.

26. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.26 Recession LO 7 A period of economic activity characterized by negative growth, which reduces demand for goods and services. Recession

27. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.27 Recession Marketing Strategies LO 7  Improve existing products and introduce new ones  Maintain and expand customer services  Emphasize top-of-the-line products and promote product value

28. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.28 THE TECHNOLOGICAL ENVIRONMENT  The technological environment represents the application of knowledge in science, inventions, and innovations to marketing.

29. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.29 Research Basic Research Applied Research Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon. An attempt to develop new or improved products

30. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.30 Technological Factors LO 8  U.S. excels at basic and applied research.  Many firms use the market concept to guide research.  New technology internally creates a long-term competitive advantage.  External technology  Creates more efficient operation or better products  May render existing products obsolete

31. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.31 Technological Factors LO 8  Innovation is becoming a global process.  New technologies create new opportunities  RSS (Really Simple Syndication)  Blogging

32. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.32 LO 9 Political and Legal Factors  New technology  Society  Businesses  Consumers Laws and Regulations Protect:

33. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.33 Competitive Factors LO 10 How many competitors? How big are competitors? How interdependent is the industry? Control

34. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.34 Developing a Competitive Strategy 2. If so, in what markets should we compete? 3. How should we compete? 1. Should we compete?

35. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.35 Types of Competition Direct Nike Vs Reebok Vs Adidas

36. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.36 Types of Competition Direct Indirect McDonalds vs. Pizza Hut vs. Arby’s vs. Chinese takeout

37. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.37 Types of Competition Direct Indirect General (Budget) Competing for the same dollars

38. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.38 Competitive Factors LO 10 Competition for Market Share and Profits Global Competition  Firms must work harder to maintain profits and market share.  More foreign firms are entering U.S. market.  Foreign firms in U.S. now compete on product quality.

39. Chapter 3Copyright ©2010 Cengage Learning Inc. All rights reserved.39 REVIEW LEARNING OUTCOME LO 10 Political and Legal Environment Mature Industries Slow Growth / No Growth Highly Competitive Marketplace Can only increase market share by taking it from a competitor.