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8/2/2019 BK12e Ch03 Basic
1/31
Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Part 1: Designing Customer-
Oriented Marketing Strategies
1. Marketing: Creating Satisfactionthrough Customer Relationships
2. Strategic Planning and theMarketing Process
3. The Marketing Environment,
Ethics, and Social Responsibility
4. E-Commerce: Marketing in theDigital Age
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Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter 3
The MarketingEnvironment,
Ethics, and Social
Responsibility
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Copyright 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 3-3
Chapter Objectives
1. Identify the five components of the marketing environment.
2. Explain the types of competition marketers face and the stepsnecessary for developing a competitive strategy.
3. Describe how government and other groups regulate marketingactivities and how marketers can influence the politicallegalenvironment.
4. Outline the economic factors that affect marketing decisions andconsumer buying power.
5. Discuss the impact of the technological environment on a firmsmarketing activities.
6. Explain how the social-cultural environment influences marketing.7. Describe the role of marketing in society and identify the two
major social issues in marketing.
8. Identify the four levels of the social responsibility pyramid.
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Environmental Scanning andEnvironmental Management
Environmental Scanning is the process ofcollecting information about the externalmarketing environment to identify andinterpret potential trends
Environmental Management involvesmarketers efforts toward achieving
organizational objectives by predicting andinfluencing the competitive, political-legal,economic, technological, and social-culturalenvironments.
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Elements ofthe Marketing
Mix within anEnvironmentalFramework
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The Competitive Environment
Competitive Environment: The interactiveprocess that occurs in the marketplaceamong marketers of directly competitiveproducts, marketers of products that can be
substituted for one another, and marketerscompeting for the consumers purchasing
power.
Monopoly
Deregulation movement
Oligopoly
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Types of Competition
Directly Competitive Products
Indirectly Competitive Products
Involves products than can be substituted
for one anotherAll Consumer Purchases
Occurs in the sense that all firms competefor the buyers purchases
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Developing a Competitive Strategy
Should we compete?
If so, in what markets should we compete?
How should we compete?
Time-based competition is a strategy ofdeveloping and distributing goods and
services more quickly than competitors
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The Political-Legal Environment
Component of the marketing environmentconsisting of laws and interpretations of lawsthat require firms to operate undercompetitive conditions and to protect
consumer rights.
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Government Regulation
Maintaining a Competitive Environment
Began in the late 19th centuryAimed at to maintaining a competitive
environment by reducing the trend towardmonopolies
Included:
Sherman Antitrust Act
Clayton Act
Federal Trade Commission
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Government Regulation
Regulating Competition
Began during the depression era of the1930s
Meant to protect independent merchantsagainst competition from larger chainstores
Included the Robinson-Patman Act
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Government Regulation
Protecting ConsumersBegan mainly in the 1960s
Increased focus on consumer protection
Newest regulatory frontier is cyberspaceIncluded:
FDA
Consumer product safetyElectronic Signature
Aviation security
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Government Regulation
Deregulating Specific Industries
Began in the late 1970s
Focused on deregulating specific
industriesIncluded:
Airline Deregulation Act
Motor Carrier ActTelecommunications
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Other Regulatory Forces
Consumer interest groups
National Coalition Against Misuse ofPesticides
PETA
Special-interest groupsAmerican Association of Retired People
(AARP)
Self-regulatory groupsDirect Marketing Association
Council of Better Business Bureaus
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Controlling the Political-Legal Environment
Companies fight unjust regulations
Regulations can present new opportunities
Political lobbying
Boycotts
Political action committees
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The Economic Environment
Factors that influence consumer buying
power and marketing strategies, includingstage of the business cycle, inflation,unemployment, resource availability and
income
Stages in the Business Cycle
Cyclical patterns consisting of the stages ofprosperity, recession, depression, andrecovery.
Wealth effect
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Inflation and Deflation
Inflation: The devaluation of money byreducing what it can buy through persistentprice increases.
Deflation: Falling prices, better?
Unemployment
The proportion of people in the economy
who do not have jobs and are activelylooking for work.
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Income
Discretionary income: the amount ofmoney people have to spend afterpaying for necessities such as food,clothing, and housing.
Resource Availability
Demarketing: the process of reducingconsumer demand for a good orservice to a level that the firm cansupply.
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The International Economic Environment
Marketers must consider the economicenvironment of other nations
Changes in foreign currency rates may
affect marketing decisionsRecessions in one part of the world may be
offset by prosperity in another
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The Technological Environment
The technological
environmentrepresents theapplication ofknowledge in science,inventions, andinnovations tomarketing.
Applying technologyhelps Fidelity improvecustomer service
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The Social-Cultural Environment
The relationship between marketing and societyand its culture
Importance in International MarketingDecisions
The social-cultural context often exerts amore pronounced influence on marketing
decision-making in the international spherethan in the domestic arena
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Consumerism
A social force within the environment
designed to protect the consumer byexerting legal, moral, and economicpressures on business and government.
John F. Kennedys Statement of
Consumer Rights
The right to choose freely
The right to be informed
The right to be heard
The right to be safe
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Ethical Issues in Marketing
Marketing ethics: Marketers standards of
conduct and moral values
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Criticisms of the Competitive Marketing System
Marketing costs are too high
The marketing system is inefficient
Marketers and the business system collude andcommit price-fixing
Firms deliver poor product quality and service
Consumers receive incomplete, false, and/ormisleading information
The marketing system produces health and safetyhazards
Marketers persuasively promote unwanted andunnecessary products to those who least needthem
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Ethical Problems in Marketing Research
Alleged invasions of personal privacy
Gathering marketing information inexchange for money or free offers
Ethical Problems in Product StrategyProduct quality
Planned obsolescence
Brand similarity
Packaging
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Ethical Problems in Distribution Strategy
Determining the appropriate degree of
control over a channelDetermining whether a company should
distribute its products in marginallyprofitable outlets that have no alternative
source of supply
Ethical Problems in Pricing
Probably the most regulated aspect
Most unethical pricing behavior is alsoillegal
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Ethical Problems in Promotional Strategy
The source of the majority of ethicalquestions
Ethically questionable personal selling
Gifts and bribesQuestionable advertising
Promotion of questionable features (air bags)
Questionable WWW related promotionalpractices
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Social Responsibility in Marketing
Social responsibility
Marketing philosophies, policies,procedures, and actions that have the
enhancement of societys welfare as aprimary objective
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The Four-StepPyramid of
Corporate SocialResponsibility
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Marketings Responsibilities
Traditionally concerned managers
relationships with customers, employees,and stockholders
Extended to relations with government andthe general public
Today, corporate responsibility hasexpanded to cover the entire societal
framework in the US and throughout theworld
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Marketing and
EcologyEcology
Plannedobsolescence
Pollution
Recycling
Green Marketing