Copyright 2000 Prentice Hall3-1 Chapter 3 Decision Making in the New Era of Marketing: Enriching the Marketing Environment

Copyright 2000 Prentice Hall3-2 Welcome to the New Era of Marketing n n Marketing is still concerned with the firm’s bottom line, but now many managers also consider social profit, which is the net benefit both the firm and society receive from a firm’s ethical practices and socially responsible behavior.

Copyright 2000 Prentice Hall3-3 Decision Model for Firms in the New Era Of Marketing (Fig. 3-1)

Copyright 2000 Prentice Hall3-4 Doing It Right: Ethical Behavior in the Marketplace n n Business ethics are rules of conduct for an organization. n n Codes of Ethics are written standards of behavior to which everyone in the organization must subscribe. n n Unethical behavior in the marketplace can lead to high costs both: – – financially, and – – to a firm’s reputation.

Copyright 2000 Prentice Hall3-5 Consumerism: Fighting Back Consumerism is the Social Movement Directed Toward Protecting Consumers from Harmful Business Practices. Consumer Bill of Rights Right to Be Safe Right to Be Informed Right to Be Heard Right to Choose Freely

Copyright 2000 Prentice Hall3-6 Ethics in the Marketing Mix Making a Product Safe Making a Product Safe Pricing the Product Fairly Pricing the Product Fairly Promoting the Product Ethically Promoting the Product Ethically Getting the Product Where itBelongs Getting the Product Where itBelongs

Copyright 2000 Prentice Hall3-7 Doing it Right: A Focus on Social Responsibility n n Social responsibility is a management practice in which organizations engage in activities that have a positive effect on society and promote the public good.

Copyright 2000 Prentice Hall3-8 Environmental Stewardship......is a position taken by an organization to protect or enhance the natural environment as it conducts its business activities. » » Green Marketing is a marketing strategy that supports environmental stewardship by creating an environmentally founded differential benefit in the minds of consumers. Example: recycling.

Copyright 2000 Prentice Hall3-9 Social Responsibility n n Serving Society: Cause Marketing – – Cause Marketing is a strategy of joining forces with a not-for-profit organization to tackle a social problem such as: » » illiteracy, » » child abuse, » » breast cancer. – – Organizations hope that this involvement will result in benefits for the cause and increased good will for the organization.

Copyright 2000 Prentice Hall3-10 Social Responsibility n n Serving the Community: Promoting Cultural Diversity – – Cultural Diversity is a practice that actively seeks to include people of all different sexes, races, ethnic groups, and religions in an organization’s employees, customers, suppliers, and distribution channel partners. – – Practice is important to the long-term financial health of the organization.

Copyright 2000 Prentice Hall3-11 Doing It Well: A Focus on Quality Promotion Place Product Price Quality is the Level of Performance, Reliability, Features, Safety, Cost or Other Product Characteristics that Consumers Expect to Satisfy Their Needs and Wants. Adding Quality to the Marketing Mix

Copyright 2000 Prentice Hall3-12 Internal Business Environment Corporate Resources & Competencies & Competencies Corporate Resources & Competencies & Competencies Corporate Culture Money People Reputation Brand Image Physical Facilities Ethical Values, Norms, and Beliefs that Influence the Behavior of Everyone in the Organization. Risk-Taking Profit-Centered People-Centered

Copyright 2000 Prentice Hall3-13 Internal Environment: Relationships with Publics Suppliers & Intermediaries Suppliers & Intermediaries Competitors Consumer Groups Consumer Groups Publics Groups of People Who Have an Interest in an Organization Publics Groups of People Who Have an Interest in an Organization

Copyright 2000 Prentice Hall3-14 Economic Environment Business Cycle Prosperity Recession Recovery Business Cycle Prosperity Recession Recovery Factors that Influence Consumer and Business Buying Patterns Factors that Influence Consumer and Business Buying Patterns Power of Expectations Consumer Confidence

Copyright 2000 Prentice Hall3-15 Competitive Environment: Competition in the Micro Environment Discretionary Income Product Competition Brand Competition

Copyright 2000 Prentice Hall3-16 Competitive Environment Monopoly Oligopoly Perfect Competition Perfect Competition Monopolistic Competition Monopolistic Competition Competition in the Macro Environment

Copyright 2000 Prentice Hall3-17 Technological Environment Patents Technology is the Key to the Future Technology is the Key to the Future Many Developments Affect Marketing Many Developments Affect Marketing

Copyright 2000 Prentice Hall3-18 Legal Environment n n The legal environment is the local, state, national, and global laws and regulations that affect businesses. n n U.S. laws governing business have two purposes: – – ensure that businesses compete fairly with each other, – – ensure that businesses don’t take advantage of consumers. n n Regulatory agencies monitor business activities.

Copyright 2000 Prentice Hall3-19 Sociocultural Environment n n This includes the characteristics of the: – – society, and – – people who live in that society, and » » Demographics include such observable aspects as size, age, gender, ethnic group, income, education and others. – – culture that reflects the values and beliefs of the society.

Copyright 2000 Prentice Hall3-20 Chapter Summary n n Explain why organizations have adopted a New Era marketing focus on ethics and social responsibility. n n Describe the New Era emphasis on quality. n n Discuss some of the important aspects of an organization’s internal environment. n n Explain why marketers scan an organization’s external business environment.