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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

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

WHAT IS THE WORLD’S THIRD LARGEST NATION? THE SOCIAL NATION CREATED BY FACEBOOK! 3-4

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

 Demographics Demographics SOCIAL FORCES DEMOGRAPHICS—POPULATION LO2 Population at a Glance U.S. Population  Social Forces Social Forces  Population Explosion  Environmental Scanning Environmental Scanning 3-6

 Baby Boomers: Baby Boomers:  Generation X: Generation X:  Generation Y: Generation Y:  Millennials: SOCIAL FORCES DEMOGRAPHICS—GENERATIONAL COHORTS LO2 3-7

Ameritrade, American Airlines, and HTC Which generational cohort is being reached? LO2 3-8

MAKING RESPONSIBLE DECISIONS Millennials Are Going to Change the World! LO2 3-9

 Composition  Trends SOCIAL FORCES DEMOGRAPHICS—RACIAL & ETHNIC DIVERSITY LO2 African Americans Hispanics Asian Americans  Multicultural Marketing 3-10

 Marital Status  Cohabitation  Blended Family SOCIAL FORCES DEMOGRAPHICS—THE AMERICAN HOUSEHOLD LO2 3-11

 Regional Shifts in the U.S.: 2012 SOCIAL FORCES DEMOGRAPHICS—POPULATION SHIFTS LO2 3-12

 Shifts Within States SOCIAL FORCES DEMOGRAPHICS—POPULATION SHIFTS LO2 Rural Suburbs Exurbs Cities 3-13

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

SOCIAL FORCES CULTURE LO2  Culture Culture  Cultural Values 3-15

ECONOMIC FORCES MACROECONOMIC CONDITIONS LO3  Economy Economy Inflation Recession 3-16

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

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

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

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

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

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

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

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

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

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

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

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

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

Band-Aid, ChapStick, Jell-O, Kleenex, Vaseline, Frisbee, and Q-Tips Are these brand names generic trademarks? LO6 3-30

ETHICAL MARKETING BEHAVIOR SOCIETAL CULTURE AND NORMS LO7  Ethics Ethics  Laws  Current Perceptions of Ethical Behavior  Culture 3-31

FIGURE 3-2 FIGURE 3-2 A framework for understanding ethical behavior 3-32

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

ETHICAL MARKETING BEHAVIOR BUSINESS CULTURE AND INDUSTRY PRACTICES LO7  Ethics of Competition Economic Espionage Bribes and Kickbacks 3-34

MAKING RESPONSIBLE DECISIONS Corporate Conscience in the Cola War LO7 3-35

ETHICAL MARKETING BEHAVIOR CORPORATE CULTURE AND EXPECTATIONS LO7  Corporate Culture  Code of Ethics Code of Ethics  Ethical Behavior of Top Management and Co-Workers Whistle-Blowers 3-36

FIGURE 3-B FIGURE 3-B American Marketing Association Statement of Ethics (abridged) 3-37

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

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

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

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

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

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