1. The Marketing Environment and Marketing Ethics2
chapter
Prepared by
Deborah Baker
Texas Christian University
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2. chapter 2 Learning Objectives
1. Discuss the external environment of marketing, and explain how it affects a firm.
2. Describe the social factors that affect marketing.
3. Explain the importance to marketing managers of current demographic trends. 2
chapter
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3. Learning Objectives (continued)
4. Explain the importance to marketing managers of multiculturalism and growing ethnic markets.
5. Identify consumer and marketer reactions to the state of the economy.
6. Identify the impact of technology on a firm. 2
chapter
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4. Learning Objectives (continued)
7. Discuss the political and legal environment of marketing.
8. Explain the basics of foreign and domestic competition.
9. Describe the role of ethics and ethical decisions in business.
10. Discuss corporate social responsibility. 2
chapter
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5. Discuss the external environment and explain how it affects a firm.1
Learning Objective
Discuss the external environment
of marketing,
and explain how it affects a firm.
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6. A defined group most likely to buy a firm’s product.1
Target Market
A defined group most likely to buy a firm’s product.
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7. External Marketing Environment1
External Marketing Environment
Demographics
Social
Change
Economic
Conditions
Political &
Legal Factors
Technology
Competition
Environmental
Scanning
Target Market
Product
Distribution
Promotion
Price
External Environment is not controllable
Ever-Changing
Marketplace
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8. External Marketing Environment1
External Marketing Environment
Social
Demographic
Economic
Technologic
Political and Legal
Competitive
External
Environmental
Factors
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9. Describe the social factors2
Learning Objective
Describe the social factors
that affect marketing.
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10. 2 Social Factors Social Factors Values Attitudes Lifestyle
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11. 2 Social Values Today’s Marketing- Oriented Values Cultural Creativity
Modernism
Cultural Creativity
Traditionalism
Today’s
Marketing-
Oriented
Values
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12. Marketing-Oriented Values2
Marketing-Oriented Values
Cultural
Creativity
Traditionalism
Modernism
Interested in new products
and services.
“Heartlanders” with
nostalgic views
Place high value on success, materialism, technology
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13. 2
The Poverty of Time
A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep...
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14. 2
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.
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15. Role of Families & Women2
Role of Families & Women
58% of all females are in the workforce
Rising purchasing power from dual-income families
Change of “traditional” purchasing roles
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16. Explain the importance of current demographic trends.3
Learning Objective
Explain the importance
to marketing managers
of current demographic trends.
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17. 3 Demographic Factors Demographics Age Location Ethnicity
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18. Age Groups: Generation Y3
Age Groups: Generation Y
Born between 1979 and 1994
Size creates immense marketing impact
Respond to ads differently
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19. Age Groups: Generation X3
Age Groups: Generation X
Born between 1965 and 1978
Savvy and cynical consumers
Indulge themselves with meals/alcohol, clothing, and electronics
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20. Age Groups: Baby Boomers3
Age Groups: Baby Boomers
Born between 1946 and 1964
Cherish youth, convenience, and individuality
Individualism has led to a personalized economy
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21. Delivering goods and services at a good value3
Personalized Economy
Delivering goods and services at a good value
on demand.
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22. Product Characteristics in a Personalized Economy3
Customization
Immediacy
Value
Products are custom designed and marketed to small target markets
Products are delivered at
the consumer’s convenience
Businesses must price competitively or create innovative products
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23. Age Groups: Older Consumers3
Age Groups: Older Consumers
Age “50 plus”
Healthier, wealthier, better educated
Considerable purchasing power
Market potential not fully tapped
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24. Location: Americans on the Move3
Location: Americans on the Move
Average U.S. citizen moves every six years
Immigrants add $10 billion yearly to economy
Migration is a global phenomenon
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25. 4 Learning Objective Explain the importance to marketing managers
of multiculturalism and
growing ethnic markets.
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26. Growing Ethnic Markets4
Growing Ethnic Markets
U.S. population is becoming a multicultural society and workforce
Trend in U.S. is toward greater multiculturalism
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27. 4 Multiculturalism When all major ethnic
groups in an area-- such as a city, county, or census tract--are roughly represented.
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28. U.S. Multicultural Makeup4
U.S. Multicultural Makeup 0%
20%
40%
60%
80%
100%
1999
2023
Whites
African
Hispanic
Asian
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29. Multicultural Marketing4
Multicultural Marketing
Stitching
Niches
Niche
Marketing
Adapting
Promotion
Strategies
for
Multicultural
Markets
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30. markets, on some common basis, to form a large market.4
Stitching Niches
A strategy for
multicultural marketing that combines ethnic, age, income, and lifestyle
markets, on some common basis, to form a large market.
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31. Identify consumer and marketer reactions to the state of the economy.5
Learning Objective
Identify consumer and marketer reactions to the state of the economy.
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32. Economic Areas of Concern to Marketers Distribution of Consumer Income5
Economic Factors
Economic Areas of Concern to Marketers
Distribution of Consumer Income
Recession
Inflation
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33. 5 Rising Incomes 66% of U.S. households earn “middle-class” income
Over 10% earn over $75,000, primarily from dual-income families
More discretionary income for high-end goods and services
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34. 5
Inflation
Prices rise with no wage increase Purchasing Power decreases
Increase profit margins by increasing efficiency
Consumers reaction:
Search for lowest prices
Rely on coupons and sales
Prices
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35. 5 Recession Income, production and employment fall
Reduced demand for goods and services
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36. Recession Marketing Strategies5
Recession Marketing Strategies
Improve existing products
Introduce new products
Maintain customer services
Emphasize top-of -the line products
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37. 6 Learning Objective Identify the impact of technology on a firm.
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38. 6
Basic Research
Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon.
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39. An attempt to develop new or improved products.6
Applied Research
An attempt to develop new or improved products.
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40. Technological & Resource Factors6
Technological & Resource Factors
New technology helps firm cope with other environmental factors
U.S. excels at basic research, but falls short at applied research
Information technology has helped U.S. economic growth
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41. Discuss the political and legal environment of marketing.7
Learning Objective
Discuss the political and
legal environment of marketing.
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42. Political and Legal Factors7
Political and Legal Factors
Laws and Regulations Protect
Consumers
Businesses
Society
New
Technology
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43. 7 Federal Legislation Sherman Act of 1890 Clayton Act of 1914
Federal Trade Commission Act of 1914
Robinson-Patman Act of 1936
Wheeler-Lea Amendments to the FTC Act of 1938
Lanhma Act of 1946
Celler-Kefauver Antimerger Act of 1950
Hart-Scott-Rodino Act of 1976
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44. 7 Regulatory Agencies Consumer Product Safety Commission
Federal Trade Commission
Food & Drug Administration
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45. 7 Regulatory Agencies Consumer Product Safety Commission
Federal Trade Commission
Food & Drug Administration
Protects consumer safety in and around their homes
Prevents unfair methods of
competition in commerce
Enforces safety regulations for food and drug products
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46. Explain the basics of foreign and8
Learning Objective
Explain the basics of foreign and
domestic competition.
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47. Control 8 Competitive Factors How many competitors?
How big are competitors?
How interdependent is industry?
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48. 8 Global Competition More foreign firms are entering U.S. market
Foreign firms in U.S. now compete on product quality
Global markets are highly competitive
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49. Describe the role of ethics and ethical decisions in business.9
Learning Objective
Describe the role of ethics and
ethical decisions in business.
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50. 9
Ethics
The moral principles or values that generally govern the conduct of an individual.
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51. The rules people develop as a result of cultural values and norms.9
Morals
The rules people develop as a result of cultural values and norms.
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52. Ethical Behavior in Business9
Ethical Behavior in Business
Ethical?
Legal?
???
Judgments Vary
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53. Ethical Development Levels9
Ethical Development Levels
More
Mature
Selfish
Preconventional
Morality
Conventional
Postconventional
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54. Morality and Business Ethics9
Morality and Business Ethics
Preconventional
Morality
Childlike level
Based on what will be punished or rewarded.
Self-centered, calculating, selfish.
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55. Morality and Business Ethics9
Morality and Business Ethics
Conventional
Morality
Moves toward the expectations of society
Concerned over legality and the opinion of others.
“When in Rome, do as the Romans”
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56. Morality and Business Ethics9
Morality and Business Ethics
Postconventional
Morality
Morality of the mature adult
Concern about how they judge themselves.
Concern if it is right in the long run.
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57. Ethical Decision Making9
Ethical Decision Making
Extent of Problems
Top Management Actions
Potential Consequences
Social Consensus
Probability of Harm
Time Until Consequences
Number Affected
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58. 9
Code of Ethics
A guideline to help marketing managers and other employees make better decisions.
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59. Creating Ethical Guidelines9
Creating Ethical Guidelines
Help identify acceptable business practices
Help control behavior internally
Reduce confusion in decision making
Facilitate discussion about right and wrong
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60. Discuss corporate social responsibility.10
Learning Objective
Discuss corporate social responsibility.
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61. Corporate Social Responsibility10
Corporate Social Responsibility
Ethical
Do what is right.
Legal
Obey the Law.
Economic
Be profitable.
Philanthropic
Be a good citizen.
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