The Marketing Environment and Marketing Ethics: The Marketing Environment and Marketing Ethics Prepared by Deborah Baker Texas Christian University Chapter 3


External Marketing Environment: External Marketing Environment 1


External Marketing Environment: External Marketing Environment 1


Social Factors: Social Factors 2


American Values: American Values 2


The Influence of Values on Buying Habits: The Influence of Values on Buying Habits 2


The Poverty of Time: The Poverty of Time A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep... 2


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. 2


Role of Families & Women: Role of Families & Women 58% of all females (ages 16-65) are in the workforce Purchasing power from dual-career families is rising “Traditional” purchasing roles and patterns are changing 2


Who Holds the Purse Strings?: Who Holds the Purse Strings? 2


Demographic Factors: Demographic Factors 3 Click Screen for Ads


The Demographic Facts of life: The Demographic Facts of life 3


Age Groups: Generation Y: Age Groups: Generation Y Born between 1979 and 1994 Size creates immense marketing impact Respond to ads differently Love customized products and services 3


Age Groups: Generation X: Age Groups: Generation X Born between 1965 and 1978 Savvy and cynical consumers Indulge themselves with meals/alcohol, clothing, and electronics 3


Age Groups: Baby Boomers: Age Groups: Baby Boomers Born between 1946 and 1964 Cherish youth, convenience, and individuality In the “nesting stage” of life Individualism has led to a personalized economy 3


Personalized Economy: Personalized Economy Delivering customized goods and services at a good value on demand. 3


Age Groups: Older Consumers: Age Groups: Older Consumers Age “55 plus” Healthier, wealthier, better educated Definite about wants and needs Have unique behavior patterns Not happy with advertising treatment 3


Older Consumer Segmentation: Older Consumer Segmentation


Growing Ethnic Markets: Growing Ethnic Markets U.S. population is becoming a multicultural society and workforce Trend in U.S. is toward greater multiculturalism Growth in three ethnic minorities: African-Americans U.S. Hispanics Asian-Americans 4


Multiculturalism: Multiculturalism When all major ethnic groups in an area-- such as a city, county, or census tract--are roughly represented.  Mixed ethnicities 4


Economic Factors: Economic Factors 5


Rising Incomes: Rising Incomes 66% of U.S. households earn “middle-class” income Over 10% earn over $75,000, primarily from dual-income families Polarization of incomes More discretionary income for high-end goods and services 5


Inflation: Inflation Prices rise with no wage increase Purchasing Power decreases Increase profit margins by increasing efficiency Consumers reaction: Search for lowest prices Rely on coupons and sales 5


Recession: Recession Income, production and employment fall Reduced demand for goods and services 5


Recession Marketing Strategies: Recession Marketing Strategies 5


Basic and Applied Research: Basic and Applied Research 6


Technological & Resource Factors: Technological & Resource Factors New technology is a weapon against inflation and recession U.S. excels at basic and applied research Information technology and the Internet have increased productivity 6


Using Technology to Boost Productivity: Using Technology to Boost Productivity 6


Technology Influences Consumers: Technology Influences Consumers Impact of technology, e.g. medicine, labor-saving (microwave ovens) Lower cost of goods through more efficient production Affect on lifestyles – what do we EXPECT in a home, a civilized environment, etc. Affect on leisure activities (GPS, cell phones, computer games)


Political and Legal Factors: Political and Legal Factors Laws and Regulations Protect 7


Federal Legislation: Federal Legislation Sherman Act Clayton Act Federal Trade Commission Act Robinson-Patman Act Wheeler-Lea Amendments to the FTC Act Lanham Act Celler-Kefauver Antimerger Act Hart-Scott-Rodino Act 7


Regulatory Agencies: Regulatory Agencies 7


Regulatory Agencies: Regulatory Agencies 7


Competitive Factors: Competitive Factors How many competitors? How big are competitors? How interdependent is the industry? 8


Competitive Factors: Competitive Factors 8 Competition for Market Share and Profits Global Competition Click Screen for Ad


Global Competition: Global Competition More foreign firms are entering U.S. market Foreign firms in U.S. now compete on product quality Global markets are highly competitive 8


Ethics and Morals: Ethics and Morals 9


Ethical Behavior in Business: Ethical Behavior in Business 9


Ethical Development Levels: Ethical Development Levels 9


Morality and Business Ethics: Morality and Business Ethics Preconventional Morality Childlike level Based on what will be punished or rewarded Self-centered, calculating, selfish 9


Morality and Business Ethics: Morality and Business Ethics Conventional Morality Moves toward the expectations of society Concerned over legality and the opinion of others “When in Rome, do as the Romans” 9


Morality and Business Ethics: Morality and Business Ethics Postconventional Morality Morality of the mature adult Concern about how they judge themselves Concern if it is right in the long run 9


Ethical Decision Making: Ethical Decision Making 9


Code of Ethics: Code of Ethics A guideline to help marketing managers and other employees make better decisions. 9


Aunt Jan’s Rules for Ethical Behavior: Aunt Jan’s Rules for Ethical Behavior “Do Unto Others…” What would Mom say? What would professional peer group say? If your actions were clearly and honestly reported in the press and media, would you be embarassed? Pass the smell test? If in doubt, don’t.


Creating Ethical Guidelines: Creating Ethical Guidelines Help identify acceptable business practices Help control behavior internally Reduce confusion in decision making Facilitate discussion about right and wrong 9


Unethical Practices: Unethical Practices 9


Corporate Social Responsibility: Corporate Social Responsibility 10


Corporate responsibility: Corporate responsibility Balance: Corporate needs Customer sovereignty: adequate product and purchase information is available to consumers to make reasonable decisions