1. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Learning Outcomes – Chapter 3 Social Responsibility, Ethics , The Marketing Environment
Ch 3
1. Discuss corporate social responsibility
2. Describe the role of ethics and ethical decisions in business
3. Discuss the external environment of marketing, and explain how it affects a firm
4. Describe the social factors that affect marketing
5. Explain the importance to marketing managers of current demographic trends 6.Explain the importance to marketing managers of multiculturalism and growing ethnic markets 7. Identify consumer and market reactions to the state of the economy 8. Identify the impact of technology on a firm 9. Discuss the political and legal environment of marketing 10. Explain the basics of foreign and domestic competition
1 Discuss corporate social responsibility
Responsibility in business refers to a firm’s concern for the way its decisions affect society. Social responsibility has four components: economic, legal, ethical, and philanthropic. These are intertwined, yet the most fundamental is earning a profit. If a firm does not earn a profit, the other three responsibilities are moot. Most businesspeople believe they should do more than pursue profits. Although a company must consider its economic needs first, it must also operate within the law, do what is ethical and fair, and be a good corporate citizen. The concept of sustainability is that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as an opportunity to earn profits and help the world at the same time.
2 Describe the role of ethics and ethical decisions in business
Business ethics may be viewed as a subset of the values of society as a whole. The ethical conduct of businesspeople is shaped by societal elements, including family, education, religion, and social movements. As members of society, businesspeople are morally obligated to consider the ethical implications of their decisions. Ethical decision making is approached in three basic ways. The first approach examines the consequences of decisions. The second approach relies on rules and laws to guide decision making. The third approach is based on a theory of moral development that places individuals or groups in one of three developmental stages: preconventional morality, conventional morality, or postconventional morality. Many companies develop a code of ethics to help their employees make ethical decisions. A code of ethics can help employees identify acceptable business practices, can be an effective internal control on behavior, can help employees avoid confusion when determining whether decisions are ethical, and can facilitate discussion about what is right and wrong.
3 Discuss the external environment of marketing and explain how it affects a firm
The external marketing environment consists of social, demographic, economic, technological, political and legal, and competitive variables. Marketers generally cannot control the elements of the external environment. Instead, they must understand how the external environment is changing and the impact of change on the target market. Then marketing managers can create a marketing mix to effectively meet the needs of target customers.
4 Describe the social factors that affect marketing
Within the external environment, social factors are perhaps the most difficult for marketers to anticipate. Several major social trends are currently shaping marketing strategies. First, people of all ages have a broader range of interests, defying traditional consumer profiles. Second, changing gender roles are bringing more women into the workforce and increasing the number of men who shop. Third, a greater number of dual-career families has created demand for timesaving goods and services.
5 Explain the importance to marketing managers of current demographic trends
Today, several basic demographic patterns are influencing marketing mixes. Because the U.S. population is growing at a slower rate, marketers can no longer rely on profits from generally expanding markets. Marketers are also faced with increasingly experienced consumers among the younger generations such as GenX and GenY. And because the population is also growing older, marketers are offering more products that appeal to middle-aged and elderly markets.
6 Explain the importance to marketing managers of multiculturalism and growing ethnic markets
Multiculturalism occurs when all major ethnic groups in an area are roughly equally represented. Growing multiculturalism makes the marketer’s task more challenging. America is not a melting pot but numerous mini-melting pots. Hispanics are the fastest growing segment of the population followed by African Americans. Many companies are now creating departments and committees to effectively target multicultural market segments. Companies have quickly found that ethnic markets are not homogeneous.
7 Identify consumer and marketer reactions to the state of the economy
Economic factors in the environment affect consumer demand. Marketers follow trends in consumer income to forecast what type of products will be demanded. Inflation, a period of rising prices, tends to make consumers less brand loyal and likely to stock up on sale items.
8 Identify the impact of technology on a firm
Monitoring new technology is essential to keeping up with competitors in today’s marketing environment. The United States excels in basic research and, in recent years, has dramatically improved its track record in applied research. Information technology and the Internet have been driving increased U.S. productivity for the past decade. Without innovation, U.S. companies can’t compete in global markets.
9 Discuss the political and legal environment of marketing
All marketing activities are subject to state and federal laws and the rulings of regulatory agencies. Marketers are responsible for remaining aware of and abiding by such regulations. Some key federal laws that affect marketing are the Sherman Act, Clayton Act, Federal Trade Commission Act, Robinson-Patman Act, Wheeler-Lea Amendments to the FTC Act, Lanham Act, Celler-Kefauver Antimerger Act, and Hart-Scott-Rodino Act. There have been many laws passed to protect the consumer as well. The Consumer Product Safety Commission, the Federal Trade Commission, and the Food and Drug Administration are the three federal agencies most involved in regulating marketing activities.
10 Explain the basics of foreign and domestic competition
The competitive environment encompasses the number of competitors a firm must face, the relative size of the competitors, and the degree of interdependence within the industry. Declining population growth, rising costs, and shortages of resources have heightened domestic competition. September 11 had a major negative impact on many industries such as tourism and the airlines. Meanwhile, dwindling international barriers are bringing in more foreign competitors and offering expanding opportunities for U.S. companies abroad.

2. Terms You Need to Know Terms to Know applied research; baby boomers
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Terms You Need to Know
Terms to Know
applied research;
baby boomers
basic research
code of ethics
component lifestyles
Consumer Product Safety Commission (CPSC)
corporate social responsibility
Demography
environmental management
Ethics
Federal Trade Commission (FTC)
Food and Drug Administration (FDA)
Generation X and Generation Y
inflation
Terms and concept you need to become familiar with.
Morals multiculturalism purchasing power
pyramid of corporate social responsibility
Recession sustainability target market

3. REVIEW LEARNING OUTCOME
Corporate Social Responsibility
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
REVIEW LEARNING OUTCOME
LO1
Sustainability –
not part of
The Pyramid
Ethical
Do what is right.
Legal
Obey the Law.
Economic
Be profitable.
Philanthropic
Be a good citizen.
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.
Discuss corporate social responsibility
Responsibility in business refers to a firm’s concern for the long-range welfare of both the company and society.
Social responsibility has four components: economic, legal, ethical, and philanthropic.
These are intertwined, yet the most fundamental is earning a profit. If a firm does not earn a profit, the other three responsibilities are moot. Most businesspeople believe they should do more than pursue profits. Although a company must consider its economic needs first, it must also operate within the law, do what is ethical and fair, and be a good corporate citizen.
The concept of sustainability assumes that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as an opportunity to earn profits and help the world at the same time.
Being socially responsibility means doing some good for the company and society.

4. Ethical Behavior in Business
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
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 (our beliefs about right and wrong behavior).
Business ethics may be viewed as a subset of the values of society as a whole. The ethical conduct of businesspeople is shaped by societal elements, including family, education, religion, and social movements. As members of society, businesspeople are morally obligated to consider the ethical implications of their decisions – this means all decisions?
LO2

5. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Joe Camel So cool he was accused of making kids smoke. So, he had to go!!!
This ad for Camel cigs was developed in Germany and used around the world. However, my criticized the ad because it was believed it caused young people to smoke. Was this not meeting the social responsibility of the company, or was it unethical?

6. Ethical Development Levels
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Ethical Development Levels
Preconventional
Morality
Conventional
Postconventional
More
Mature
Childlike
Based on what will be punished or rewarded
Self-centered, calculating, selfish
Moves toward the expectations of society
Concerned over legality and the opinion of others
Concern about how they judge themselves
Concern if it is right in the long run
Ethical decision making is approached in three basic ways. The first approach examines the consequences of decisions. The second approach relies on rules and laws to guide decision making. The third approach is based on a theory of moral development that places individuals or groups in one of three developmental stages: preconventional morality, conventional morality, or postconventional morality. Many companies develop a code of ethics to help their employees make ethical decisions. A code of ethics can help employees identify acceptable business practices, can be an effective internal control on behavior, can help employees avoid confusion when determining whether decisions are ethical, and can facilitate discussion about what is right and wrong. It appears that what we called the “societal marketing concept” is in keeping with the postconventional morality view.
LO2

7. Ethical Decision Making
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Ethical Decision Making
Is Influential Factors
Extent of Problems
Probability of Harm
Top Management Actions
Time Until
Consequences
Potential Consequences
Number Affected
Because each ones morals and ethics may not be the same, the factors listed in this slide tend to influence ethical decision making and management judgement.
Social Consensus
LO2

8. Code of Ethics LO2 Code of Ethics
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Code of Ethics
Code of Ethics
A guideline to help marketing managers and other employees make better decisions.
Most associations, corporations, and organizations develop a written code of ethics – the next side is the code of ethics of the American Marketing Associations for marketers.
Online
LO2

9. Ethical Norms and Values for Marketers
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Ethical Norms and Values for Marketers
The code of ethics offered by the American Marketing Association
LO2

10. External Marketing Environment
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
LO3
Demographics
Social
Change
Economic
Conditions
Political &
Legal Factors
Technology
Competition
Environmental
Scanning
Target Market
External Environment (uncontrollable)
Ever-Changing
Marketplace
Product
Distribution
Promotion
Price
Internal (within the organization)
Marketing mix
Discuss the external environment of marketing and explain how it affects a firm
The external marketing environment consists of social, demographic, economic, technological, political and legal, and competitive variables. Marketers generally cannot control the elements of the external environment. Instead, they must understand how the external environment is changing and the impact of change on the target market. Then marketing managers can create a marketing mix to effectively meet the needs of target customers. These external factors can and do impact the behavior of our consumers in the target market and how we create our marketing mix [the target market – group of people managers feel is most likely to buy the firm’s product, and marketing mix is what we have called our marketing strategy].
Note: The external environmental factors impact marketing decision making, but are not controlled by the company or firm managers. They are uncontrollable by managers, but they might attempt to influence it – such as getting congress to pass a certain law that benefits them.

11. Social Factors Impacting Marketing Decision Making [the mix]
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Social Factors Impacting Marketing Decision Making [the mix]
Values
Attitudes
Lifestyle
Describe the social factors that affect marketing
Within the external environment, social factors are perhaps the most difficult for marketers to anticipate. Several major social trends are currently shaping marketing strategies. First, people of all ages have a broader range of interests, defying traditional consumer profiles. Second, changing gender roles are bringing more women into the workforce and increasing the number of men who shop. Third, a greater number of dual-career families has created demand for timesaving goods and services.
LO4

12. Social Factors LO4 Social Factors Influence: Products purchased
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Social Factors
Social Factors Influence:
Products purchased
Prices paid for products
Effectiveness of promotions
How, where, and when people purchase
Social factors impact marketing mix decisions. For an example see the next slide two slides. These two slides show “Betty Crocker,” the Mother of General Mill, Inc. used as a symbol on many of its products. Notice how she has changed from being a “housewife” to “corporate executive” to being more multiculturalism.
The change in demographics [more Hispanics] and role of women [more women working outside of the home] in society impacted the product and promotion.
LO4

13. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment

14. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment

15. Role of Families and Working Women
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Role of Families and Working Women
Growth of dual-income families results in increased purchase power
Approximately 63% of work-age females are in the workforce
Women expect different things in life
purchase bulk of technology products
do most of the grocery shopping
second largest group of home buyers after couples
Single households outnumber married households with kids
Component Life Style
The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.
In the past 30 years, one of the greatest changes has been on families and working women – more single families, more women working, more purchase power form many families, and many new products and services to serve these changing life styles.
LO4

16. Demographic Factors LO5
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Demographic Factors
LO5
Demography
The study of people’s vital statistics, such as their age, race and ethnicity, and location.
Note the definition of demography. The next slide illustrates how changing demographics help define a new market and a new product.
Today, several basic demographic patterns are influencing marketing mixes. Because the U.S. population is growing at a slower rate, marketers can no longer rely on profits from generally expanding markets. Marketers are also faced with increasingly experienced consumers among the younger generations such as GenX and GenY. And because the population is also growing older, marketers are offering more products that appeal to middle-aged and elderly markets.

17. A New Niche Market requires a new niche product!!
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
A New Niche Market requires a new niche product!!
Note: demographic data shows more and more Americans are obese.

18. Tweens LO5 Pre- and early adolescents, age 8 to 14
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Tweens
LO5
Pre- and early adolescents, age 8 to 14
Population of 29 million
Purchasing power of $ billion in 2007
View TV ads as “just advertising”
Emerging as “the richest generation” and the “most influential generation in history”

19. Generation Y LO5 Born between 1979 and 1994 Population of 60 million
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Generation Y
LO5
Born between 1979 and 1994
Population of 60 million
Purchasing power of $200 billion annually
Researchers have found Gen Yers to be:
Impatient
Family-oriented
Inquisitive
Opinionated
Diverse
Time managers
“Street Smart”
Word of mouth marketing is
effective
Online

20. Generation X LO5 Born between 1965 and 1978 Population of 40 million
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Generation X
LO5
Born between 1965 and 1978
Population of 40 million
Savvy and cynical consumers
Time is at a premium, and outsourcing is utilized
Entering their money-making years

21. Baby Boomers LO5 Born between 1946 and 1964
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Baby Boomers
LO5
Born between 1946 and 1964
Population of 77 million—the largest demographic segment
$1 trillion in spending power for people aged 50 to 60
Income will continue to grow as they keep working
This group is driving the need for
more health care products

22. REVIEW LEARNING OUTCOME
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
REVIEW LEARNING OUTCOME
LO5
Current Demographic Trends
Age
Tweens
8 to 14 yrs 29 million
Gen Y
million
Gen X
million
Baby Boom
million

23. Growing Ethnic Markets
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
LO6
Spending power of ethnic markets by 2008:
Hispanics: $1 trillion
African Americans: $921 billion
Asian Americans: $526 billion
Diversity can result in bottom-line benefits to companies.
Explain the importance to marketing managers of multiculturalism and growing ethnic markets
Multiculturalism occurs when all major ethnic groups in an area are roughly equally represented. Growing multiculturalism makes the marketer’s task more challenging. America is not a melting pot but numerous mini-melting pots. Hispanics are the fastest growing segment of the population followed by African Americans. Many companies are now creating departments and committees to effectively target multicultural market segments. Companies have quickly found that ethnic markets are not homogeneous.

24. Distribution of Consumer Income
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Economic Factors
Distribution of Consumer Income
Inflation
Recession
Identify consumer and marketer reactions to the state of the economy
Economic factors in the environment affect consumer demand. Marketers follow trends in consumer income to forecast what type of products will be demanded. Inflation, a period of rising prices, tends to make consumers less brand loyal and likely to stock up on sale items.
Recession can reduce demand and reduce consumer spending.
LO7

25. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Consumers’ Incomes
Median U.S. household income in 2007 projected at $45,000
Incomes have risen at a slow pace.
Education is the primary determinant of earning potential.
Consumers are strapped for cash.
This is why the USA is a good market.
LO7

26. The Financial Power of Women
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
The Financial Power of Women
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
66% of home improvements
53% of investments
51% of consumer electronics
My, my, how things have changed. What might this mean for marketing managers?
LO7

27. Purchasing Power LO7 Definitions Inflation Is Recession Is Purchasing
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Purchasing Power
A comparison of the relative cost of a set standard of goods and services in different geographic areas.
Purchasing
Power
Inflation Is
Inflation
A measure of the decrease in the value of the money, expressed as the percentage reduction in value since the previous year.
Recession Is
A period of economic activity characterized by negative growth, which reduces demand for goods and services.
Recession
LO7

28. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Research
LO8

29. Technological Factors
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
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
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
Identify the impact of technology on a firm
Monitoring new technology is essential to keeping up with competitors in today’s marketing environment. The United States excels in basic research and, in recent years, has dramatically improved its track record in applied research. Information technology and the Internet have been driving increased U.S. productivity for the past decade. Without innovation, U.S. companies can’t compete in global markets.
LO8

30. Political and Legal Factors
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Political and Legal Factors
New technology
Society
Businesses
Consumers
Laws and Regulations Protect:
Discuss the political and legal environment of marketing
All marketing activities are subject to state and federal laws and the rulings of regulatory agencies. Marketers are responsible for remaining aware of and abiding by such regulations. Some key federal laws that affect marketing are the Sherman Act, Clayton Act, Federal Trade Commission Act, Robinson-Patman Act, Wheeler-Lea Amendments to the FTC Act, Lanham Act, Celler-Kefauver Antimerger Act, and Hart-Scott-Rodino Act. There have been many laws passed to protect the consumer as well. The Consumer Product Safety Commission, the Federal Trade Commission, and the Food and Drug Administration are the three federal agencies most involved in regulating marketing activities
LO9

31. Regulate competitive environment Regulate pricing practices
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Federal Legislation
Sherman Act
Clayton Act
Federal Trade Commission Act
Celler-Kefauver Antimerger Act
Hart-Scott-Rodino Act
Regulate competitive environment
Robinson-Patman Act
Regulate pricing practices
Wheeler-Lea Act
Control false
advertising
Basically three types:
To regulated competition
To Regulate pricing practices
Control false advetising
LO9

32. Regulatory Agencies LO9 Consumer Product Safety Commission
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Regulatory Agencies
Consumer Product Safety Commission
Protects consumer safety in and around their homes
Federal Trade Commission
Prevents unfair methods of
competition in commerce
Food & Drug Administration
Enforces safety regulations for food and drug products
Online
LO9

33. Cease-and-Desist Order Affirmative Disclosure Corrective Advertising
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Powers of the FTC
Cease-and-Desist Order
Consent Decree
Affirmative Disclosure
Corrective Advertising
Restitution
Counteradvertising
LO9

34. Control Competitive Factors LO10 How many competitors?
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Competitive Factors
How many competitors?
How big are competitors?
How interdependent is the industry?
Control
Explain the basics of foreign and domestic competition
The competitive environment encompasses the number of competitors a firm must face, the relative size of the competitors, and the degree of interdependence within the industry. Declining population growth, rising costs, and shortages of resources have heightened domestic competition. September 11 had a major negative impact on many industries such as tourism and the airlines. Meanwhile, dwindling international barriers are bringing in more foreign competitors and offering expanding opportunities for U.S. companies abroad.
LO10

35. Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Learning Outcomes – Now you should be familiar with Social Responsibility, Ethics , and The Marketing Environment
Ch 3
1. Discuss corporate social responsibility
2. Describe the role of ethics and ethical decisions in business
3. Discuss the external environment of marketing, and explain how it affects a firm
4. Describe the social factors that affect marketing
5. Explain the importance to marketing managers of current demographic trends 6.Explain the importance to marketing managers of multiculturalism and growing ethnic markets 7. Identify consumer and market reactions to the state of the economy 8. Identify the impact of technology on a firm 9. Discuss the political and legal environment of marketing 10. Explain the basics of foreign and domestic competition
1 Discuss corporate social responsibility
Responsibility in business refers to a firm’s concern for the way its decisions affect society. Social responsibility has four components: economic, legal, ethical, and philanthropic. These are intertwined, yet the most fundamental is earning a profit. If a firm does not earn a profit, the other three responsibilities are moot. Most businesspeople believe they should do more than pursue profits. Although a company must consider its economic needs first, it must also operate within the law, do what is ethical and fair, and be a good corporate citizen. The concept of sustainability is that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as an opportunity to earn profits and help the world at the same time.
2 Describe the role of ethics and ethical decisions in business
Business ethics may be viewed as a subset of the values of society as a whole. The ethical conduct of businesspeople is shaped by societal elements, including family, education, religion, and social movements. As members of society, businesspeople are morally obligated to consider the ethical implications of their decisions. Ethical decision making is approached in three basic ways. The first approach examines the consequences of decisions. The second approach relies on rules and laws to guide decision making. The third approach is based on a theory of moral development that places individuals or groups in one of three developmental stages: preconventional morality, conventional morality, or postconventional morality. Many companies develop a code of ethics to help their employees make ethical decisions. A code of ethics can help employees identify acceptable business practices, can be an effective internal control on behavior, can help employees avoid confusion when determining whether decisions are ethical, and can facilitate discussion about what is right and wrong.
3 Discuss the external environment of marketing and explain how it affects a firm
The external marketing environment consists of social, demographic, economic, technological, political and legal, and competitive variables. Marketers generally cannot control the elements of the external environment. Instead, they must understand how the external environment is changing and the impact of change on the target market. Then marketing managers can create a marketing mix to effectively meet the needs of target customers.
4 Describe the social factors that affect marketing
Within the external environment, social factors are perhaps the most difficult for marketers to anticipate. Several major social trends are currently shaping marketing strategies. First, people of all ages have a broader range of interests, defying traditional consumer profiles. Second, changing gender roles are bringing more women into the workforce and increasing the number of men who shop. Third, a greater number of dual-career families has created demand for timesaving goods and services.
5 Explain the importance to marketing managers of current demographic trends
Today, several basic demographic patterns are influencing marketing mixes. Because the U.S. population is growing at a slower rate, marketers can no longer rely on profits from generally expanding markets. Marketers are also faced with increasingly experienced consumers among the younger generations such as GenX and GenY. And because the population is also growing older, marketers are offering more products that appeal to middle-aged and elderly markets.
6 Explain the importance to marketing managers of multiculturalism and growing ethnic markets
Multiculturalism occurs when all major ethnic groups in an area are roughly equally represented. Growing multiculturalism makes the marketer’s task more challenging. America is not a melting pot but numerous mini-melting pots. Hispanics are the fastest growing segment of the population followed by African Americans. Many companies are now creating departments and committees to effectively target multicultural market segments. Companies have quickly found that ethnic markets are not homogeneous.
7 Identify consumer and marketer reactions to the state of the economy
Economic factors in the environment affect consumer demand. Marketers follow trends in consumer income to forecast what type of products will be demanded. Inflation, a period of rising prices, tends to make consumers less brand loyal and likely to stock up on sale items.
8 Identify the impact of technology on a firm
Monitoring new technology is essential to keeping up with competitors in today’s marketing environment. The United States excels in basic research and, in recent years, has dramatically improved its track record in applied research. Information technology and the Internet have been driving increased U.S. productivity for the past decade. Without innovation, U.S. companies can’t compete in global markets.
9 Discuss the political and legal environment of marketing
All marketing activities are subject to state and federal laws and the rulings of regulatory agencies. Marketers are responsible for remaining aware of and abiding by such regulations. Some key federal laws that affect marketing are the Sherman Act, Clayton Act, Federal Trade Commission Act, Robinson-Patman Act, Wheeler-Lea Amendments to the FTC Act, Lanham Act, Celler-Kefauver Antimerger Act, and Hart-Scott-Rodino Act. There have been many laws passed to protect the consumer as well. The Consumer Product Safety Commission, the Federal Trade Commission, and the Food and Drug Administration are the three federal agencies most involved in regulating marketing activities.
10 Explain the basics of foreign and domestic competition
The competitive environment encompasses the number of competitors a firm must face, the relative size of the competitors, and the degree of interdependence within the industry. Declining population growth, rising costs, and shortages of resources have heightened domestic competition. September 11 had a major negative impact on many industries such as tourism and the airlines. Meanwhile, dwindling international barriers are bringing in more foreign competitors and offering expanding opportunities for U.S. companies abroad.

36. Now Take the practice quiz
Chapter 3 Social Responsibility, Ethics, and the Marketing Environment
Now
Go to and review the flash cards.
Take the practice quiz
Explore other aspects of this site for chapter 3
Take the Chapter 3 quiz in the allocated time