1. Copyright © Houghton Mifflin Company. All rights reserved. 3–13–1 The Marketing Environment Environmental Scanning –The process of collecting information about forces in the marketing environment Observation Secondary sources Market research Environmental Analysis –The process of assessing and interpreting the information gathered through environmental scanning Accuracy Consistency Significance

2. Copyright © Houghton Mifflin Company. All rights reserved. 3–23–2 The Marketing Environment (cont’d) Responding to Environmental Forces –Reactive approach Passive view of environment as uncontrollable Current strategy is cautiously adjusted to accommodate environmental changes –Proactive approach Actively attempts to shape and influence environment Strategies are constructed to overcome market challenges and take advantage of opportunities

3. Copyright © Houghton Mifflin Company. All rights reserved. 3–33–3 Competitive Forces Monitoring Competition –Helps determine competitors’ strategies and their effects on firm’s own strategies –Guides development of competitive advantage and adjusting firm’s strategy –Provides ongoing information about competitors –Assists in maintaining a marketing orientation

4. Copyright © Houghton Mifflin Company. All rights reserved. 3–43–4 Economic Forces Buying Power –Resources, such as money, goods, and services, that can be traded in an exchange –Income Disposable income—after tax income Discretionary income—disposable income available for spending and saving beyond the basic necessities of life –Credit –Wealth

5. Copyright © Houghton Mifflin Company. All rights reserved. 3–53–5 Economic Forces (cont’d) Willingness to Spend –An inclination to buy because of expected satisfaction from a product, influenced by the ability to buy and numerous psychological and social forces –Expectations influencing the willingness to spend: Future employment Income levels Prices Family size General economic conditions (e.g., rising prices)

6. Copyright © Houghton Mifflin Company. All rights reserved. 3–63–6 Legal and Regulatory Forces: Major Laws

7. Copyright © Houghton Mifflin Company. All rights reserved. 3–73–7 Major Laws (cont’d)

8. Copyright © Houghton Mifflin Company. All rights reserved. 3–83–8 Major Laws (cont’d)

9. Copyright © Houghton Mifflin Company. All rights reserved. 3–93–9 Regulation Regulatory Agencies –Federal Trade Commission (FTC) influences marketing activities most; can seek civil penalties and require corrective advertising Self-Regulatory Forces –Better Business Bureau –National Advertising Review Board (NARB)

10. Copyright © Houghton Mifflin Company. All rights reserved. 3–10 Major Regulatory Agencies

11. Copyright © Houghton Mifflin Company. All rights reserved. 3–11 Major Regulatory Agencies (cont’d)

12. Copyright © Houghton Mifflin Company. All rights reserved. 3–12 Technological Forces Technology –The application of knowledge and tools to solve problems and perform tasks more efficiently Impact of Technology –Dynamic means constant change –Reach refers to how technology quickly moves through society. –The self-sustaining nature of technology as the catalyst for even faster development

13. Copyright © Houghton Mifflin Company. All rights reserved. 3–13 Sociocultural Forces –The influences in a society and its culture(s) that change people’s attitudes, beliefs, norms, customs, and lifestyles Demographic Diversity and Characteristics –Increasing proportion of older consumers –Entering another baby boom –Increasingly multicultural U.S. society Cultural Values –Primary source of values is the family –Values influence: Eating habits (healthier foods) Alternative health and medical treatment choices

14. Copyright © Houghton Mifflin Company. All rights reserved. 3–14 Social Responsibility and Ethics in Marketing Social Responsibility –An organization’s obligation to maximize its positive impact and minimize its negative impact on society Marketing citizenship –The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders Stakeholders –Constituents who have a “stake” or claim in some aspect of the company’s products, operations, markets, industry, and outcomes

15. Copyright © Houghton Mifflin Company. All rights reserved. 3–15 The Pyramid of Corporate Social Responsibility FIGURE 3.3 Source: Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,” adaptation of Figure 3, p. 42. Reprinted from Business Horizons, July/Aug. 1991. Copyright © 1991 by the Trustees at Indiana University, Kelley School of Business. Used with permission.

16. Copyright © Houghton Mifflin Company. All rights reserved. 3–16 Ethical Dimension Marketing Ethics –Principles and standards that define acceptable marketing conduct as determined by various stakeholders Ethical Issue –An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical

17. Copyright © Houghton Mifflin Company. All rights reserved. 3–17 Influence Factors of Ethical Standards Ethical Standards CompanyIndustryGovernmentCustomers Interest Groups Society Influence Factors

18. Copyright © Houghton Mifflin Company. All rights reserved. 3–18 Ethical Issues in Marketing

19. Copyright © Houghton Mifflin Company. All rights reserved. 3–19 Texas Instruments’ Ethics “Quick Test” Is the action legal? Does it comply with our values? If you do it, will you feel bad? How will it look in the newspaper? If you know it’s wrong, don’t do it! If you’re not sure, ask. Keep asking until you get an answer Source: Texas Instruments. Used with permission.

20. Copyright © Houghton Mifflin Company. All rights reserved. 3–20 Green Marketing The specific development, pricing, promotion, and distribution of products that do not harm the natural environment

21. Copyright © Houghton Mifflin Company. All rights reserved. 3–21 Will Consumers Pay an Extra 25 cents/ Gallon to Reduce Pollution and Global Warming? Source: “Americans Split on Paying Higher Prices to Reduce Pollution,” USA Today, September 4, 2001, p. A1.

22. Copyright © Houghton Mifflin Company. All rights reserved. 3–22 Foundations of Consumerism Consumerism –The organized efforts of individuals, groups, and organizations to protect the rights of consumers Lobbying government officials and agencies Letter-writing campaigns and boycotts –Kennedy’s Consumer “Bill of Rights” Right to safety Right to be informed Right to choose Right to be heard

23. Copyright © Houghton Mifflin Company. All rights reserved. 3–23 Incorporating Social Responsibility and Ethics into Strategic Planning Overall Strategic Marketing Planning Ethics Individual and group decisions Ethics Individual and group decisions Social Responsibility The total effect of marketing decisions on society Social Responsibility The total effect of marketing decisions on society