9 Social Responsibility, Ethics, and the Marketing Environment Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Social Responsibility, Ethics, and the Marketing Environment CHAPTER 3 Marketing Lamb, Hair, McDaniel 9 Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University

Learning Outcomes LOI LO2 LO3 Discuss corporate social responsibility Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Learning Outcomes LOI Discuss corporate social responsibility Describe the role of ethics and ethical decisions in business Discuss the external environment of marketing, and explain how it affects a firm LO2 LO3

Learning Outcomes LO4 LO5 LO6 Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Learning Outcomes Describe the social factors that affect marketing Explain the importance to marketing managers of current demographic trends Explain the importance to marketing managers of multiculturalism and growing ethnic markets LO5 LO6 LO4

Learning Outcomes LO7 LO8 LO9 LOIO Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Learning Outcomes Identify consumer and market reactions to the state of the economy Identify the impact of technology on a firm Discuss the political and legal environment of marketing Explain the basics of foreign and domestic competition LO7 LO8 LO9 LOIO

Corporate Social Responsibility Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Corporate Social Responsibility LOI Discuss corporate social responsibility Notes: Corporate social responsibility is a business’s concern for society’s welfare. This concern is demonstrated by managers who consider the long-range best interests of the company and the company’s relationship to the society in which it operates. Discussion/Team Activity: Discuss companies that are strong proponents of corporate social responsibility.

Corporate Social Responsibility Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Corporate Social Responsibility LOI 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 Notes: The newest theory in social responsibility is sustainability. It is a view that companies can’t thrive for long in a world where people are suffering and desperately poor. However, skeptics say business should focus on making a profit and leave social and environmental problems to nonprofit organizations and government. Discussion/Team Activity: Discuss the pros and cons of the idea of sustainability.

REVIEW LEARNING OUTCOME Chapter 3 Social Responsibility, Ethics, and the Marketing Environment REVIEW LEARNING OUTCOME LOI Corporate Social Responsibility Ethical Do what is right. Legal Obey the Law. Economic Be profitable. Philanthropic Be a good citizen. Notes: Corporate social responsibility is a business’s concern for society’s welfare. The components are: Economic: Profit is the foundation on which all other responsibilities rest. Legal responsibilities: Law is society’s codification of right and wrong; play by the rules of the game. Ethical responsibilities: Do what is right, just, and fair; avoid harm. Philanthropic responsibilities: Contribute resources to the community; improve the quality of life. These components are distinct but together constitute the whole. However, if the company doesn’t make a profit, the other three responsibilities are moot. Discussion/Team Activity: Research companies that are America’s most admired companies: Dell General Electric Starbucks Wal-Mart Southwest Airlines FedEx Berkshire Hathaway Microsoft Johnson & Johnson Procter & Gamble

Ethical Behavior in Business Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Behavior in Business LO2 Describe the role of ethics and ethical decisions in business

Ethical Behavior in Business Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Behavior in Business LO2 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. Notes: Ethical values are situation specific and time oriented. Everyone needs an ethical base to conduct in the business world and in personal life. One approach toward ethical values is to develop a personal set of ethics to examine the consequences of an act. A second stresses the importance of rules. Examples of Rules: * Always treat others as you would like to be treated. * Copying copyrighted computer software is against the law. * It is wrong to lie, bribe, or exploit. A third approach emphasizes the development of moral character in individuals, as shown in the three levels of ethical development on the next slide.

Ethical Development Levels Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Development Levels LO2 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 Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Decision Making LO2 Influential Factors Extent of Problems Top Management Actions Potential Consequences Social Consensus Probability of Harm Time Until Consequences Number Affected Notes: There is no cut-and-dried answer in making ethical decisions. The factors shown on this slide tend to influence ethical decision making and judgments.

Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO2 Biz Flix Jaws 12

Code of Ethics LO2 Code of Ethics Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Code of Ethics LO2 Code of Ethics A guideline to help marketing managers and other employees make better decisions. Online University of British Columbia Centre for Applied Ethics Research corporate codes of ethics through the Applied Ethics Resources page. Compare the codes of three companies. What common themes do you find? Notes: A national study found that 60 percent of companies surveyed maintained a code of ethics, 33 percent offered ethics training, and 33 percent employed an ethics officer. A code of ethics should not be too vague or too detailed. Exhibit 3.2 is a simple set of ethical guidelines. Discussion/Team Activity: Discuss companies with highly praised codes of ethics. http://www.ethicsweb.ca Online

Creating Ethical Guidelines Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO2 Helps identify acceptable business practices Helps control behavior internally Avoids confusion in decision making Facilitates discussion about right and wrong

Ethical Norms and Values for Marketers Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Ethical Norms and Values for Marketers LO2 Exhibit 3.3 Notes: Exhibit 3.3 demonstrates an example of ethical norms from the AMA.

The External Marketing Environment Chapter 3 Social Responsibility, Ethics, and the Marketing Environment The External Marketing Environment LO3 Discuss the external environment of marketing, and explain how it affects a firm

External Marketing Environment Chapter 3 Social Responsibility, Ethics, and the Marketing Environment External 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 Notes: This slide demonstrates the continuous evolution in the external marketing environment. The external environmental factors include demographics, social change, economic conditions, political and legal factors, technology, and competition. The external environment can not be controlled by management. However, the marketing mix (the Four Ps) can be controlled and reshaped to influence the target market. The target market is a defined group that is most likely to buy a firm’s products. Discussion/Team Activity: Discuss the evolution and changes in the computer industry during the last twenty years. How has the external environment changed? How has the target market and marketing mix changed? What external environmental conditions are challenging the computer industry today? What reshaping would you recommend to enhance a decline in computer sales?

Target Market LO3 Target Market Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Target Market LO3 Target Market A defined group most likely to buy a firm’s product.

Describe the social factors that affect marketing Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Social Factors LO4 Describe the social factors that affect marketing

Social Factors LO4 Attitudes Values Lifestyle Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Social Factors Values Attitudes Lifestyle Notes: Social change is the most difficult external variable for marketing managers to forecast, influence, or integrate intomarketing plans. Social factors influence the products people buy, the price paid, the effectiveness of specific promotions, and how, where, and when people expect to purchase products. LO4

Social Factors LO4 Social Factors Influence: Products purchased Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO4 Social Factors Influence: Products purchased Prices paid for products Effectiveness of promotions How, where, and when people purchase

Social Factors LO4 Core American Values Self-Sufficiency Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO4 Self-Sufficiency Upward Mobility Work Ethic Conformity Core American Values Notes: A value is a strongly held and enduring belief. The four basic values shown influenced the attitudes and lifestyles during the first 200 years of the United States. They are: Self-sufficiency: Every person should stand on his or her own two feet. Upward mobility: Success comes with getting an education, working hard, and playing by the rules. Work ethic: Hard work, dedication to family and frugality. Conformity: No one should expect to be treated differently from everybody else. Values are formed through interaction with family, friends, and influencers such as teachers, religious leaders, and politicians. The environment can also play a role in shaping values. Discussion/Team Activity: What environmental influences have affected the values of Americans? Examples: Great Depression, Women’s Role in the Workplace, Hippie Revolution of 1960’s, the September 11 terrorist attack.

The Influence of Values on Buying Habits Chapter 3 Social Responsibility, Ethics, and the Marketing Environment The Influence of Values on Buying Habits Ranked Characteristics of Product Quality Reliability Durability Easy maintenance Ease of use Trusted brand name Low price Notes: Values influence our buying habits. Consumers demand high-quality goods that save energy, time, and calories! Furthermore, the products must be durable and not break down. This slide shows the ranked characteristics of product quality that are important to consumers. Discussion/Team Activity: 1. Discuss products that demonstrate high quality standards in each of the ranking categories. LO4

Component Lifestyles LO4 Component Lifestyles Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Component Lifestyles LO4 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. Notes: A lifestyle is a mode of living. People are choosing products and services that meet diverse needs and interests rather than conforming to traditional stereotypes. The unique lifestyles of every consumer can require a different marketing mix.

Role of Families and Working Women Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO4 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 Notes: The phenomenon of working women has had a greater effect on marketing than has any other social change. Furthermore, the growth of dual-income families has resulted in increased purchasing power. As women’s earnings grow, so do their levels of expertise, experience, and authority. Women expect different things in life. Additionally, there is never enough time to do all they need to do. As a result, busy families are turning technology to their advantage and shopping more on the Internet.

REVIEW LEARNING OUTCOME Chapter 3 Social Responsibility, Ethics, and the Marketing Environment REVIEW LEARNING OUTCOME LO4 Social Factors that Affect Marketing

Demographic Factors LO5 Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Demographic Factors LO5 Explain the importance to marketing managers of current demographic trends

Demographic Factors LO5 Demography 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. Notes: The next uncontrollable variable in the external environment is demography: the study of people’s vital statistics, such as age, race and ethnicity, and location. Demographic characteristics are strongly related to consumer buyer behavior.

Tweens LO5 Pre- and early adolescents, age 8 to 14 Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO5 Pre- and early adolescents, age 8 to 14 Population of 29 million Purchasing power of $39 billion in 2007 View TV ads as “just advertising” Emerging as “the richest generation” and the “most influential generation in history” Notes: Age group cohorts have been given the names of tweens, Generation Y, Generation X, and baby boomers. Each cohort has its own needs, values, and consumption patterns.

Generation Y LO5 Born between 1979 and 1994 Population of 60 million Chapter 3 Social Responsibility, Ethics, and the Marketing Environment 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 Mountain Dew The North Face Mountain Dew and The North Face are brands preferred by Generation Y. Visit each company’s Web site and identify the elements that make the site appealing to Gen Yers. Do there seem to be any elements that might have crossover appeal for Generation X? Which ones? Discussion/Team Activity: Identify some mature brands favored by the baby boomers. Discuss how these brands might successfully market to Generation Y. Online http://www.mountaindew.com http://www.northface.com

Generation X LO5 Born between 1965 and 1978 Population of 40 million Chapter 3 Social Responsibility, Ethics, and the Marketing Environment 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 Discussion/Team Activity: 1. Name some ways that companies have marketed successfully to Generation Xers.

Baby Boomers LO5 Born between 1946 and 1964 Chapter 3 Social Responsibility, Ethics, and the Marketing Environment 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 Four segments of baby boomers: “Looking for balance” “Confident and living well” “At ease” “Overwhelmed” Notes: Four segments: Looking for balance. Very active and saving time is important. Opportunities for travel-related businesses and food-service businesses. Confident and living well. Highest incomes of all segments and enjoy being the first to purchase a new product. Stylish and trendy. Opportunities for luxury goods and services. At ease boomers. Do not worry about future, job, or financial security. Home-centric and family-oriented. Opportunities for traditional household products. Brand names resonate strongly. Overwhelmed boomers. Lowest income of all segments and worry about the future. Health is a big concern. Below average on accepting technology and on using electronic, digital, and tech products.

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 1979-1994 60 million Gen X 1965-1978 40 million Baby Boom 1946-1964 77 million

Growing Ethnic Markets Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Growing Ethnic Markets LO6 Explain the importance to marketing managers of multiculturalism and growing ethnic markets

Growing Ethnic Markets Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Growing Ethnic Markets 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. Notes: By 2008, Hispanics will wield more than $1 trillion in spending power, African Americans will top the $921 billion mark, and Asian Americans will soar to $526 billion. This far outpaces total U.S. growth in buying power. Hispanics are America’s largest minority group with 12.5 percent of the population, followed by African Americans with 12.3 percent and Asian Americans with 3.6 percent.

Marketing to Hispanic Americans Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO6 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.

Marketing to African Americans Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO6 Many firms are creating products for the African American market. Promotional dollars and media choices directed toward African Americans continue to increase.

Marketing to Asian Americans Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO6 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.

REVIEW LEARNING OUTCOME Chapter 3 Social Responsibility, Ethics, and the Marketing Environment REVIEW LEARNING OUTCOME LO6 Multiculturalism and Growing Ethnic Markets

Identify consumer and marketer reactions to the state of the economy Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Economic Factors LO7 Identify consumer and marketer reactions to the state of the economy Notes: 1. The next external factor is the economic environment.

Distribution of Consumer Income Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Economic Factors LO7 Distribution of Consumer Income Inflation Recession Notes: The three economic areas of greatest concern to marketers are consumers’ incomes, inflation, and recession.

Consumers’ Incomes Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO7 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. Notes: U.S. incomes have continued to rise, but at a slower pace. Only 1 percent of those with a high-school education earn over $100,000 annually. Income for the median household has risen only 11 percent since 1990, but household spending has jumped by 30 percent. Debt outstanding leaped by 80 percent.

The Financial Power of Women Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO7 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

Purchasing Power LO7 Purchasing Power Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Purchasing Power LO7 Purchasing Power A comparison of the relative cost of a set standard of goods and services in different geographic areas. Notes: Increased standards of living are a function of purchasing power.

Inflation LO7 Inflation Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Inflation LO7 Inflation A measure of the decrease in the value of the money, expressed as the percentage reduction in value since the previous year. Notes: In inflationary times, marketers must be aware that inflation causes consumers to either build up or diminish brand loyalty. Even though most consumers try hard to maintain their standard of living, they try to make more economical purchases. The buyer will not pay more for a product than the subjective value he/she places on it.

Recession LO7 Recession Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Recession LO7 Recession A period of economic activity characterized by negative growth, which reduces demand for goods and services. Notes: In 2001, the United States experienced a recession from the slowdown in the high-tech sector, overextended consumer credit, and the terrorist attacks. The recession lasted until early 2003.

Recession Marketing Strategies Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Recession Marketing Strategies Improve existing products and introduce new ones Maintain and expand customer services Emphasize top-of-the-line products and promote product value LO7

Technological Factors Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Technological Factors LO8 Identify the impact of technology on a firm

Research LO8 Basic Research Applied Research Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Research LO8 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 Notes: The United States excels at both basic and applied research. Many firms are using the marketing concept to guide their research, rather than invent for the sake of invention.

Technological Factors Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Technological Factors 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 Notes: The United States excels at both basic and applied research. Many firms are using the marketing concept to guide their research, rather than invent for the sake of invention. Discussion/Team Activity: List and discuss companies that excel at creating new products designed around customer needs/wants. LO8

Technological Factors Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Technological Factors Innovation is becoming a global process. New technologies create new opportunities RSS (Really Simple Syndication) Blogging Notes: The popularity of blogs has presented new opportunities for marketers. RSS enables automated, seamless delivery of updated news content or marketing messages to blog sites or mobile phones. Advanced technology also allows marketers to use natural language search technologies to scan blogs and learn about consumer opinion as it is being generated. Instead of looking for keywords alone, these search tools scan for speech that reflects speech patterns and word combinations. This allows marketers to discover what people are saying about products and how they are saying it. LO8

REVIEW LEARNING OUTCOME Chapter 3 Social Responsibility, Ethics, and the Marketing Environment REVIEW LEARNING OUTCOME LO8 Impact of Technology on a Firm Basic Research Marketing Mix Applied Technology Advances

Political and Legal Factors Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Political and Legal Factors LO9 Discuss the political and legal environment of marketing

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: Notes: Business needs government regulations to protect new technology innovations, the interests of society, one business from another, and consumers. Government needs business for generation of taxes. The private sector serves as a counterweight to government. Every aspect of the marketing mix is subject to laws and restrictions. It is the responsibility of marketing managers to understand and conform to these laws, while creating new programs to accomplish marketing objectives. LO9

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 Notes: Exhibit 3.6 states the impact on marketing from each of these Federal acts. LO9

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 Federal Trade Commission As a marketing manager, how would you use the FTC Web site in designing a new marketing campaign? Notes: The regulatory agencies shown on this slide are the three federal agencies most directly and actively involved in marketing affairs. Online http://www.ftc.gov LO9

Cease-and-Desist Order Affirmative Disclosure Corrective Advertising Powers of the FTC Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO9 Cease-and-Desist Order Consent Decree Affirmative Disclosure Corrective Advertising Restitution Counteradvertising Notes: The FTC’s powers are described in Exhibit 3.8.

Consumer Privacy LO9 Government Actions Gramm-Leach-Bliley Act Chapter 3 Social Responsibility, Ethics, and the Marketing Environment LO9 Gramm-Leach-Bliley Act Health Insurance Portability and Accountability Act (HIPPA) California’s Notice of Security Breach Law Government Actions Notes: The popularity of the Internet for collecting consumer data has alarmed privacy-minded consumers. While privacy policies for U.S. companies are largely voluntary, collecting consumer data outside the United States is a different matter. More than 50 nations have developed privacy legislation. Common privacy rules includes obtaining data fairly and lawfully and using the information only for the original specified purpose. Identity theft cost $53 billion in 2005. Three laws have been passed to protect consumers. These are shown on this slide.

REVIEW LEARNING OUTCOME Chapter 3 Social Responsibility, Ethics, and the Marketing Environment REVIEW LEARNING OUTCOME LO9 Political and Legal Environment of Marketing

Explain the basics of foreign and domestic competition Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Competitive Factors LOIO Explain the basics of foreign and domestic competition

Control Competitive Factors LOIO How many competitors? Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Competitive Factors LOIO How many competitors? How big are competitors? How interdependent is the industry? Control Notes: 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. Management has little control over the competitive environment.

Competition for Market Share and Profits Chapter 3 Social Responsibility, Ethics, and the Marketing Environment Competitive Factors LOIO Competition for Market Share and Profits Firms must work harder to maintain profits and market share. Global Competition More foreign firms are entering U.S. market. Foreign firms in U.S. now compete on product quality. Notes: Firms find they must work harder to maintain profits and market share regardless of the competitive environment. For example, after September 11, 2001, the airline industry imploded. United Airlines, Delta Airlines, and Northwest Airlines declared bankruptcy. American Airlines teetered on the brink of bankruptcy. Survival meant cutting costs and squeezing out revenue wherever possible. Yet Southwest Airlines turned a profit based on its efficient cost-saving strategies. Many foreign competitors are considering the U.S. to be a ripe target market. In the past, foreign firms penetrated U.S. markets on price. Today, they compete on product quality. Global competition is discussed in Chapter 4.

REVIEW LEARNING OUTCOME Political and Legal Environment Chapter 3 Social Responsibility, Ethics, and the Marketing Environment REVIEW LEARNING OUTCOME Political and Legal Environment LOIO Mature Industries Slow Growth / No Growth Highly Competitive Marketplace Can only increase market share by taking it from a competitor.