BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 1 SOCIAL RESPONSIBILITY ANDTHE MARKETING ENVIRONMENT

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 2 Some Ethical Issues Misleading advertisements and marketing in general Taking advantage of consumer ignorance Marketing of harmful products –Physically dangerous –Over-consumption; marketing to people living above their means Marketing of products banned or not marketed in the U.S. to other countries

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 3 “Win-Win” Deals and Social Responsibility By pooling resources, different organizations may each get more than what they put in –Firms may be able to contribute not only cash but also relevant expertise –Favorable publicity may be worth more than the same amount spent on advertising –Charitable groups may provide access to potential customers

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 4 Sponsored Fundraising Non-profit groups currently spend a large proportion of their revenue on fundraising “Sponsored Fundraising:” Fund raising efforts could be done by firms on behalf of the charitable group –Firm sends and pays for letter on behalf of organization –Firm gets promotional benefit –Charity saves money and improves credibility Obstacles: Privacy concerns; matching of firms and relevant charities

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 5 Promotional Events A large retail chain might sponsor a concert series by paying all expenses in return for considerable publicity Triple “win-win-win” deal: –The charity receives the proceeds without having to pay costs –The sponsor receives publicity. Tickets are bought in the store or on its web site. –An aging artist—whose fans are now in their prime earning years—gets an opportunity to revive a career or promote a new venture (e.g., movie role)

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 6 Commercial Comedy Advertising mascots (e.g., the Energizer Bunny, Ronald McDonald, and the AFLAC Duck) are sent (with other talent) to perform comedy at non-profit fundraising events The non-profit gains: High quality, low cost entertainment The sponsor gains –Significant visibility –Attention to advertising message/awareness –Secondary media coverage –Good will among those exposed

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 7 IN-CLASS ASSIGNMENT In teams of your choice (any size from 1 to the whole section is fine), please identify a way in which a firm of your choice may be able to profit on some socially responsible action. Please prepare a brief (1-3 minute) presentation to the rest of the class on what you concluded, including: The social benefit that you expect to result. The way in which the firm will make money on this, either in the short or long run. Any specifics that you have discussed. The team can present either as a whole or have one or several people do the talking.

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 8 THE MARKETING ENVIRONMENT Culture Demographics Social Technology Economic Political and Legal Factors

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 9 CULTURE Culture: Behavior and “shared meanings” Variations –Country –Regional Impact of culture on expectations and what is “right” to do –Individuality vs. collectivism –Relationships between people –Work habits

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 10 DEMOGRAPHICS Distribution of people across statistical categories –Occupation –Income –Ethnicity  Language usage –Age  Birth rates –Residence (e.g., urban/rural)

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 11 SOCIAL FACTORS Values—tensions –Value of privacy vs. security –“Green” products vs. Cost Convenience Performance “Component lifestyles” Demographic changes

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 12 ECONOMIC FACTORS Consumer debt –Credit card/specific –Real estate Purchasing power –Over time (inflation) –Across domestic regions –Across countries Economic cycles “New” family expenses: Internet, cable/satellite TV, cell phone “Teach a parrot to say ‘supply” and ‘demand” and you have a learned economist!” Paul Samuelson.

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 13 TECHNOLOGICAL FORCES Internet/Communications –Direct consumer-consumer communication –Information search opportunities –Growth of “portables” Manufacturing –Increased global scope of competition due to easier entry –Greater competition for quality, selection Emerging industries and obsolescence (shortening technology life cycles)

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 14 POLITICAL AND LEGAL FACTORS Political –Special interests and lobbying –Response to crises  legislation, regulation Legal –Consumer Protection Laws Truth in Lending Deceptive Advertising Product Safety –Antitrust (fair competition) will be covered under pricing –Laws relating to international trade will be covered under international marketing

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 15 REGULATORY INFLUENCES Regulation –Joint Federal and state regulation –Delegation by Congress and state legislatures to regulatory agencies to handle specifics of complex issues Consumer protection –Consumer Product Safety Commission (CPSG), Federal Trade Commission (FTC), Food & Drug Administration (FDA )

BUAD 307 SOCIAL RESPONSIBILITY AND THE MARKETING ENVIRONMENT Lars Perner 16 INFLUENCES ON THE FIRM AND ITS CHOICES ENVIRONMENT FIRM PROFIT PRESSURE SOCIAL RESPONSIBILITY OPPORTUNITIES RESOURCES SOCIAL ECONOMIC TECHNOLOGY LEGAL/POLITICAL DEMOGRAPHICS CULTURE