part two environmental forces, social responsibility, and ethics
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Part Two Environmental Forces, Social Responsibility, And Ethics. The Marketing Environment Social Responsibility And Ethics In Marketing. Chapter 3 The Marketing Environment. Objectives. Recognize importance of environmental scanning and analysis - PowerPoint PPT PresentationTRANSCRIPT
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Part TwoEnvironmental Forces, Social
Responsibility, And Ethics
3.The Marketing Environment4.Social Responsibility And Ethics In Marketing
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Chapter 3The Marketing Environment
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Objectives
• Recognize importance of environmental scanning and analysis
• Understand how competitive/economic factors affect organizations’ ability to compete and customers’ ability/willingness to buy products
• Identify political forces in marketing environment
• Understand how laws, government regulations, and self-regulatory agencies affect marketing
• Explore effects of new technology on society and on marketing
• Analyze sociocultural issues marketers must deal with as they make decisions.
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Environmental Scanning
The process of collecting information about the forces in the marketing environment.
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Scanning Involves:
• Observation• Secondary Sources
– Business– Trade– Government– General-interest publications– Marketing research
• Cautions– Know how to use information– Don’t gather too much information
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Environmental Analysis
The process of assessing and interpreting the information gathered through environmental scanning.
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Responding To Environmental Forces
• Accept as uncontrollable- passive and reactive
• Attempt to influence and shape them-proactive– Constructive
– Bring desired results
– Are limits
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Competition
Other organizations that market products that are similar to or can be substituted for a marketer’s products in the same geographic area.
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Types Of Competitors
• Brand- products with similar features and benefits for same customers at similar prices
• Product- same product class but products with different features, benefits, and prices
• Generic- different products that solve same problem or satisfy same basic customer need
• Total Budget- compete for limited financial resources of same customers
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Monopoly
A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply.
Royal Mail Monopoly
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Oligopoly
A competitive structure in which a few sellers control the supply of a large proportion of a product.
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Monopolistic Competition
A competitive structure in which a firm has many potential competitors and tries to develop a marketing strategy to differentiate its product.
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Pure Competition
A market structure characterized by an extremely large number of sellers, none strong enough to significantly influence price or supply.
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Types Of Competitive Structures
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Monitoring Competition
• Price- most competitors monitor
• Do more than analyze information
• Develop ongoing system for gathering information
• Understand market - customer needs
• Helps in recognition of own strategy flaws
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Economic Forces
• Economic Conditions
• Buying Power
• Willingness to Spend
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Business Cycle
A pattern of economic fluctuations that has four stages: prosperity, recession, depression, and recovery.
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Economic Conditions
• Prosperity- low unemployment, high total income, ensure buying power
• Recession- unemployment rises, total buying power declines, stifling consumer/business spending
• Depression- unemployment high, wages are low, total disposable income at a minimum, consumers lack confidence in the economy
• Recovery- economy moves from recession/depression to prosperity
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Buying Power
Resources, such as money, goods, and services that can be traded in an exchange.
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Income
For an individual, the amount of money received through wages, rents, investments, pensions, and subsidy payments for a given period.
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Types Of Income
• Disposable - after-tax
• Discretionary - disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter
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Wealth
The accumulation of past income, natural resources, and financial resources.
As people’s wealth increases:1.Make current purchases
2.Generate income
3.Acquire large amounts of credit
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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.
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Political Forces
• Legislation enacted
• Legal decisions interpreted by courts
• Regulatory agencies created and operated
• Marketers
– Adjust to conditions
– Influence through contributions
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Top Corporate DonorsBy Political Party
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Legal AndRegulatory Forces
• Procompetitive legislation- preserves competition• Consumer Protection legislation– Protect people from harm– Prohibit hazardous products– Information disclosure– Particular marketing activities
• Encourage compliance• Regulatory Agencies• Self-Regulatory forces
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Major Laws AffectingMarketing Decisions
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Federal Trade Commission
An agency that regulates a variety of business practices and curbs false advertising, misleading pricing, and deceptive packaging and labeling.
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Federal Trade Commission Enforcement Tools
Federal Trade Commission Website
Source: www.ftc.gov.
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Major Federal Regulatory Agencies
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Direct-To-Consumer Pharmaceutical Guidelines
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Self-Regulatory Forces
• Trade Associations• Better Business Bureau• National Advertising Review Board• Advantages– Less expensive– More realistic
• Limitations– Nonmember firms do not have to abide– Lack of enforcement tools– Often less strict
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Technology
The application of knowledge and tools to solve problems and perform tasks more efficiently.
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Effects Of Technology
• Dynamics- constant change
• Reach- moves throughout society
• Self-sustaining- catalyst to spur faster development
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Sociocultural Forces
The influences in a society and its culture(s) that change people’s attitudes, beliefs, norms, customs, and lifestyles.
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Issues Of Sociocultural Forces
• Demographic and diversity characteristics
– Age, gender, race, ethnicity
– Marital/parental status, income, education
• Cultural values
– Health
– Family
– Environment
• Consumerism- efforts to protect consumers’ rights
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U.S. Population Projections By Race
Source: U.S. Bureau of the Census, Statistical Abstract of the United States, 2000; Reed Business Info, July 11, 2005.