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Chapter 3

Chapter 3. The Marketing Environment, Ethics, and Social Responsibility. Environmental Scanning. the process of collecting info about the external mkt environment in order to id & interpret potential trends. Competition in a Competitive Environment.

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Chapter 3

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  1. Chapter 3 The Marketing Environment, Ethics, and Social Responsibility

  2. Environmental Scanning • the process of collecting info about the external mkt environment in order to id & interpret potential trends

  3. Competition in a Competitive Environment 1. direct competition between marketers of similar products ie: Huggies vs. Pampers 2. marketers of products that can be substituted for each other ie: bus vs airplane

  4. 3. Competition for consumer dollars • product can be similar or dissimilar, all firms compete for part of consumer dollars ie: car purchase vs. lawn service

  5. Competitive Strategy 1. Should we compete? • decide based on: resources, objectives & profitability 2. If so, in what markets should we compete? • allocate resources to areas of greatest opportunity (target market) 3. How should we compete? • Price, Quality, etc.

  6. The Political-Legal Environment • laws that govern business activity Table 2.1 Pg. 49 • FTC: false/misleading advertising • What happens if firms don’t comply??

  7. The Economic Environment

  8. 5 Factors 1. BUSINESS CYLES • prosperity • marketers: expand product lines, raise prices, etc. • recession • marketers: lower prices,eliminate marginal products, etc. (6 months) • depression • recovery - consumer ability to buy is up - but confidence is not

  9. 2. INFLATION • rising price level that results in reduced consumer buying power 3. UNEMPLOYMENT • rises during recessions, lowers during prosperity & recovery periods

  10. 4. RESOURCE AVAILABILITY • Limited resources: • DEMARKETING - try to reduce consumer demand - ie: utility companies

  11. 5. INCOME • marketers study income stats & trends to estimate market potential • interested in discretionary income

  12. THE TECHNOLOGICAL ENVIRONMENT • Can create an entire new industry, not just new products. What are some examples??

  13. The Social-Cultural Environment • relate btw marketing & society and its culture • marketers must be sensitive to changes in values & demographics • Ex. Low-fat food

  14. Criticisms of Competitive Marketing System 1. Costs too high 2. Marketing system is inefficient 3. Marketers guilty of collusion & price fixing 4. product quality & service are poor

  15. 5. consumers get incomplete, false, or misleading information 6. marketing system has produced health & safety hazards 7. unwanted/unnecessary products are promoted to those who need them least

  16. MARKETING ETHICS AREAS OF CONCERN 1. Marketing Research- invasion of privacy 2. Product Strategy Ethics - misleading packaging - odd sizing of products - bottles w/ concave bottoms 3. Distribution Strategy Ethics - should products in marginally profitable outlets be kept because no alternative source of supply?

  17. 4. Promotional Strategy Ethics • gives rise to majority of ethical questions • gifts & bribes common enticements 5. Pricing Ethics • unethical price behavior is usually illegal

  18. AMA Code of Ethics:

  19. SOCIAL RESPONSIBILITY • acceptance of obligation to consider profit, consumer satisfaction, & societal well-being of equal value in evaluating firm performance

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