1. Chapter 3 The Marketing Environment, Ethics, and Social Responsibility
Principles of
Contemporary Marketing
Kurtz & Boone
Chapter 3 The Marketing Environment, Ethics, and Social Responsibility

2. Chapter Objectives
Identify the five components of the marketing environment.
Explain the types of competition marketers face and the steps necessary for developing a competitive strategy.
Describe how marketing activities are regulated and how marketers can influence the political-legal environment.
Outline the economic factors that affect marketing decisions and consumer buying power.
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3. Chapter Objectives
Discuss the impact of the technological environment on a firm’s marketing activities.
Explain how the social-cultural environment influences marketing.
Describe the ethical issues in marketing.
Identify the four levels of the social responsibility pyramid.
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4. Environmental Scanning
Collecting external marketing environment information to identify and interpret potential trends
Environmental management - Attainment of organizational objectives by predicting and influencing the competitive, political-legal, economic, technological, and social- cultural environments
Strategic alliance - Partnership in which two or more companies combine resources and capital to create competitive advantages in a new market
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6. The Competitive Environment
Interactive process that occurs in the marketplace among:
Marketers of directly competitive products
Marketers of products that can be substituted for one another
Marketers competing for the consumer’s purchasing power
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7. 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
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11. 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
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12. Stages in the Business Cycle
Prosperity - Consumer spending is brisk; growth in services sector
Recession - Consumers focus on basic, fundamental products
Depression - Consumer spending sinks to its lowest level
Recovery - Consumer purchasing power increases
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13. The Technological Environment
Application of knowledge based on discoveries in science, inventions, and innovations to marketing
Technology leads to:
New products
Improvements in existing products
Better customer service
Reduced prices
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14. The Social-Cultural Environment
The relationship between the marketer, society, and culture
Marketers must be sensitive to demographic shifts and changing values
Increasing importance of cultural diversity
Example: Univision and Telemundo face growing competition in Spanish-language television programming
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15. Consumerism
Social force within the environment that aids and protects the consumer by exerting legal, moral, and economic pressures on business and government
Consumer rights:
The right to choose freely
The right to be informed
The right to be heard
The right to be safe
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18. Ethics in Marketing Research
Consumers are concerned about privacy
Proliferation of databases
Selling of address lists
Ease with which consumer information can be gathered
Several agencies offer assistance to Internet consumers
The U.S. government maintains a Do Not Call registry to prevent unwanted telemarketing
Consumers are concerned about privacy
Proliferation of databases
Selling of address lists
Ease with which consumer information can be gathered
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19. Source: The Four Step Pyramid of Corporate
Social Responsibility from Business Horizons,
Vol. 34, 1991, page 92, Freeman & Liedtka,
“Corp. Social Responsibility.” Reprinted from
Business Horizons © 1991 with permission
From Elsevier.
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20. Marketing’s Responsibilities
Marketers must consider:
The global effects of their decisions
The long-term effects of their decisions
The well-being of future generations
Entire communities can benefit through socially responsible investing
Green marketing - Production, promotion, and reclamation of environmentally sensitive products
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