2. HOW DO YOU ATTRACT 1 BILLION CUSTOMERS? MOVE FAST AND BREAK THINGS!
Facebook and the Influence of Environmental Forces

3. Environmental Scanning
Collecting external marketing environment information to identify and interpret potential trends
Trends represent significant opportunities or threats to the company
Example: Consumer Product Safety Commission issued a recall of American Girl Craft Pearly Beads & Ribbon Bracelets kits, citing high levels of lead in some of the beads

4. Environment
Competitive environment
Marketing environment

5. Figure 3.1 - Elements of the Marketing Mix within an Environmental Framework

6. ALTERNATIVE FORMS OF COMPETITION
COMPETITIVE FORCES
ALTERNATIVE FORMS OF COMPETITION
LO 3-5
Competition
Pure Competition
Monopolistic Competition
Oligopoly
Pure Monopoly

7. FIGURE 3-A Continuum of competition

8. Types of Competition Direct Indirect
Among marketers of similar products
Example: Alternative suppliers in the cell phone market such as Verizon and AT&T
Indirect
Involves products that are easily substituted
Example: In the fast-food industry, pizza competes with chicken, hamburgers, and tacos

9. Types of Competition
Competition among all firms that compete for consumers’ purchases
All firms compete for a limited number of dollars that consumers can or will spend
Example: The purchase of a Honda Accord might compete with a Norwegian Cruise Line cruise

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

11. The Macroenvironment Key Demographic Trends World population growth
Now 6.2 billion
Projected to reach 7.9 billion by 2025

12. The Macroenvironment Key Demographic Trends
Changing American household
Geographic population shifts
Better-educated, more white-collar workforce
Increasing Diversity

13. The Economic Environment
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
The Economic Environment
Gross domestic product (GDP) - Sum of all goods and services produced by a nation in a year
Economic environment - Factors that influence consumer buying power and marketing strategies
Business cycle - Pattern of stages in the level of economic activity

14. Chapter 1
Economic Cycles

15. MACROECONOMIC CONDITIONS
ECONOMIC FORCES
MACROECONOMIC CONDITIONS
LO 3-3
Economy: Refers to the income and resources that affect running a business or household
Inflation
/Deflation
Recession

16. The Technological Environment
The technological environment represents the application of knowledge in science, inventions, and innovations to marketing.
Applying technology helps Fidelity improve customer service

17. The Political-Legal Environment
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
The Political-Legal Environment
Consists of laws and their interpretations that require firms to operate under competitive conditions and to protect consumer rights
Ignorance or non-compliance can result in fines, negative publicity, and civil damage suits

18. PROTECTING COMPETITION
REGULATORY FORCES
PROTECTING COMPETITION
LO 3-6
Regulations: Restrictions places on business conduct
Sherman Antitrust Act (1890): Forbids conspiracies in trade
Clayton Act (1914): Forbids actions likely to lessen competition
Robinson-Patman Act (1936): Unlawful to discriminate in prices charged to different purchasers

19. Responding to the Marketing Environment
Reactive: Passive Acceptance and Adaptation
Companies design strategies that avoid threats and capitalize upon opportunities.
Proactive: Environmental Management
Use of lobbyists, PR, advertorials, lawsuits, complaints, and contractual agreements to influence environmental forces.

20. UNDERSTANDING ETHICAL MARKETING BEHAVIOR
LO 3-7
Ethics:
The moral principles and values that guide actions and decisions of individuals or groups.

21. FIGURE 3-2 A framework for understanding ethical behavior

22. Social Responsibility in Marketing
Marketing philosophies, policies, procedures, and actions that have the enhancement of society’s welfare as a primary objective
Four dimensions of social responsibility:
Economic
Legal
Ethical
Philanthropic

23. Social Responsibility and Ethics
Ethical = morally right
Socially Responsible = society views as best
Promote well-being
Promote harmony, stability
Influence
elections
Draw
crowds to events
Responsible marketing
can...

24. Figure 3.5 - The Four Step Pyramid of Social Responsibility