1. Part 1 STRATEGIC MARKETING AND ITS ENVIRONMENT

2. 1: Customer-Driven Strategic Marketing
2: Planning, Implementing, and Evaluating Marketing Strategies
3:The Marketing Environment, Social Responsibility, and Ethics

3. Chapter 3 The Marketing Environment, Social Responsibility, and Ethics
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258

4. Marketing Applications

5. 1. Assume you are opening one of the following retail businesses
1. Assume you are opening one of the following retail businesses. Identify publications at the library or online that provide information about the environmental forces likely to affect the business. Briefly summarize the information each source provides.
a. Convenience store
b. Women’s clothing store
c. Grocery store
d. Fast-food restaurant
e. Furniture store
Student answers may be very general if they are unfamiliar with specific sources at your school’s business library. This exercise also is a great opportunity for your students to visit the business library or for a member of the library staff to give a brief presentation to your students. However, student responses will fall into these general areas:

6. Women’s clothing store
1. Answer:
Convenience store
transportation studies (sociocultural and competitive information)
Women’s clothing store
fashion magazines (sociocultural forces),
government economic data (economic forces including disposable income)
Grocery store
government legislation (regulatory forces),
newspapers (sociocultural forces and food recalls),
census data (demographic information)

7. d) Fast-food restaurant
1. Answer (cont.):
d) Fast-food restaurant
government legislation (regulatory forces),
newspapers (sociocultural forces),
census data (demographic information)
e) Furniture store
government economic data (economic forces including disposable income),
home magazines (sociocultural trends)

8. 4. Competitive forces are very important to companies, particularly those that operate in many different countries. However, the importance of each competitive force might vary depending upon the industry. For instance, legal and regulatory forces limit many of the activities of cigarette firms. While rising prices might impact the purchase of luxury goods, necessities such as diapers and antibiotics will not experience as much of an impact, because people require them whether the prices are high or not.
With this in mind, examine the impact that economic forces, political forces, legal and regulatory forces, technological forces, and sociocultural forces have upon Exxon Mobil, General Motors, and Procter & Gamble. Rate each of these factors on a scale of 1-5, with 5 being most important and 1 as least important. Based on these three companies, which environmental variable do you think would be the highest priority for each company and why? And which environmental variable do you feel would be most important for marketers?

9. Figure 1.1 - Components of Strategic Marketing#2 #1 #3
4 P’s
(place+time) #6 #4 #5

10. 4. Answer:
Student answers will vary due to the subjective nature of this question. You may suggest that students answer the question in a table like the one below in order to encourage comparison between companies and industries. You may also ask that students provide reasons or examples to support their ratings.
Economic
Political
Legal and Regulatory
Technological
Sociocultural
Exxon Mobile
General Motors
Procter & Gamble

11. Internet Exercise Business for Social Responsibility (BSR) Summary:
Business for Social Responsibility (BSR) is a nonprofit organization for companies who want to operate responsibly and demonstrate respect for ethical values, people, communities, and the natural environment. Founded in 1992, BSR offers members practical information, research, educational programs, and technical assistance, as well as the opportunity to network with peers on current social responsibility issues. To learn more about this organization and access its many resources, visit

12. 1. What types of businesses join BSR, and why?
BSR membership is open to all companies, regardless of size, sector, location, level of CSR experience, corporate reputation, or other factors. BSR prefers to work with companies who have an interest and commitment to improving their overall performance in key CSR areas.
Companies join to gain access to a powerful network of member companies, and thought leaders, peers, and stakeholders focused on creating viable sustainability solutions.

13. 2. Describe the services available to member companies
2. Describe the services available to member companies. How can these services help companies improve their performances?
Member companies get access to networks, newsletters, information, discounts on consulting and workshops, invitations to events, and job postings on the site.
This helps companies to exchange ideas, find qualified people, and fine-tune their activities to improve their social responsibility and business performance.

14. 3. Peruse the “BSR Conference - Overview” link, located at the top of the home page. What are some advantages to attending the BSR conference and listening to industry leaders and experts in corporate social responsibility?
According to the website, “The BSR Conference 2013 will celebrate and explore the power of networks, bringing together more than 1,000 leaders from business and sustainability from around the world to share their expertise and knowledge.
For more than 20 years, the BSR Conference has provided the preeminent global platform for sharing best practices, collaborative approaches, and opportunities to advance sustainable business. Joining the Conference will help experience the power of networks firsthand and to accelerate progress as BSR works to create a just and sustainable world.”

15. Video Case 3.1
VIDEO Case 3.1 : TOMS Shoes Expands One-to-One Model to Eyewear

16. Summary
TOMS is known for their for-profit philanthropic business model, which allows the company to donate one pair of shoes to a child for every pair of shoes purchased. TOMS is now applying that model to eyewear. For every pair of sunglasses TOMS sells, a person with vision problems in a developing nation receives surgery, prescription glasses, or medical treatment to help restore his or her sight.
TOMS takes its obligations for social responsibility seriously by working closely with local humanitarian organizations and striving for a responsible supply chain. Even though they pay higher prices, TOMS’ customers feel committed to the company because they know that their purchases are going toward a good cause.
Philanthropy: charity, humanity

17. 1. Do you think TOMS is successful because of its unique products, or is it the firm’s approach to social responsibility?
Some people really like TOMS for its products, regardless of the company’s activities. Some of TOMS’ products are stylish and have not been replicated at lower prices, so students may argue that the shoes and eyewear are important.
However, students will most likely answer that the one to one model is a large contributor to TOMS’ success. Students may believe that they receive extra benefits when they know they are helping someone in need with their purchase.

18. 2. How does TOMS manage its supply chain in order to ensure ethical and socially responsible conduct?
TOMS uses factories in China, Argentina, and Ethiopia for manufacturing, which creates complex supply chain relationships that must be carefully managed. TOMS created a set of manufacturing standards based on International Labor Organization compliance standards for its manufacturers.
The company regularly performs audits to check that the factories are complying with company standards. TOMS also seeks to create strong organizational relationship with its employees and volunteers. The company often allows employees to participate in Shoe Drops (distributing the shoes to children) so they can see firsthand how their efforts are helping others.

19. 3. How does TOMS’ business model relate to the understanding of stakeholders and strategic philanthropy?
Strategic philanthropy is the synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits. TOMS address the needs of a wide variety of stakeholders, including their customers, employees, and society, which helps the company to accomplish both their financial and philanthropic goals.
Philanthropy: charity, humanity