1chapter 3 marketing 7e lamb hair mcdaniel ©2004 south-western/thomson learning the marketing...
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1Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
The Marketing Environment The Marketing Environment and Marketing Ethicsand Marketing Ethics
Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 3
2Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning ObjectivesLearning 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.
3Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(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.
4Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(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.
5Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the external environment of marketing, and explain how it affects a firm.
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On Linehttp://www.levi.com
On Linehttp://www.levi.com
6Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Target MarketTarget Market
A defined group most likely
to buy a firm’s product.
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7Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
External Marketing External Marketing EnvironmentEnvironment
DemographicsDemographics
SocialChangeSocial
Change
EconomicConditionsEconomicConditions
Political & Legal FactorsPolitical &
Legal Factors
TechnologyTechnology
CompetitionCompetition
EnvironmentalEnvironmentalScanningScanning
Target Market
ProductDistributionPromotion
Price
ProductDistributionPromotion
Price
External Environment External Environment is not controllableis not controllable
Ever-ChangingEver-ChangingMarketplaceMarketplace
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8Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
External Marketing External Marketing EnvironmentEnvironment
SocialSocial
DemographicDemographic
EconomicEconomic
TechnologicTechnologic
Political and LegalPolitical and Legal
CompetitiveCompetitive
External Environmental
Factors
External Environmental
Factors
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9Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe the social factors that affect marketing.
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10Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Social FactorsSocial Factors
ValuesValues AttitudesAttitudes LifestyleLifestyle
Social FactorsSocial Factors
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11Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
American ValuesAmerican Values
Self-SufficiencySelf-Sufficiency
Basic Basic American American
ValuesValues
Basic Basic American American
ValuesValues
Upward MobilityUpward Mobility
Work EthicWork Ethic
ConformityConformity
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12Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
The Influence of Values The Influence of Values on Buying Habitson Buying Habits
1. Reliability1. Reliability
2. Durability2. Durability
3. Easy maintenance3. Easy maintenance
4. Ease of use4. Ease of use
5. Trusted brand5. Trusted brand
6. Low price6. Low price
RankedCharacteristics
of Product Quality
RankedCharacteristics
of Product Quality
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13Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
The Poverty of TimeThe 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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14Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Component LifestylesComponent 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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15Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Role of Families & WomenRole of Families & Women
58% of all females (ages 16-65) are in the workforce
Purchasing power from dual-career families is rising
“Traditional” purchasing roles and patterns are changing
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16Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Who Holds the Purse Strings?Who Holds the Purse Strings?22
17Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the importance to marketing managersof current demographic trends.
33
18Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Demographic FactorsDemographic Factors
AgeAge LocationLocation Race and Ethnicity
Race and Ethnicity
DemographyDemography
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19Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
The Demographic Facts of lifeThe Demographic Facts of life33
20Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Age Groups: Generation YAge Groups: Generation Y
Born between 1979 and 1994
Size creates immense marketing impact
Respond to ads differently
Love customized products and services
33
On Linehttp://www.generation-y.com
On Linehttp://www.generation-y.com
On Linehttp://www.mountaindew.comhttp://www.northface.com
On Linehttp://www.mountaindew.comhttp://www.northface.com
21Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Age Groups: Generation XAge Groups: Generation X
Born between 1965 and 1978
Savvy and cynical consumers
Indulge themselves with meals/alcohol, clothing, and electronics
33
22Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Age Groups: Baby BoomersAge Groups: Baby Boomers
Born between 1946 and 1964
Cherish youth, convenience, and individuality
In the “nesting stage” of life
Individualism has led to a personalized economy
33
23Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Personalized EconomyPersonalized Economy
Delivering customized
goods and services at a
good value on demand.
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24Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Age Groups: Older Age Groups: Older ConsumersConsumers
Age “55 plus”
Healthier, wealthier, better educated
Definite about wants and needs
Have unique behavior patterns
Not happy with advertising treatment
33On Linehttp://www.gct.comhttp://www.maupintour.com
On Linehttp://www.gct.comhttp://www.maupintour.com
25Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the importance to marketing managers of multiculturalism and growing ethnic markets.
44
26Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Growing Ethnic MarketsGrowing Ethnic Markets
U.S. population is becoming a multicultural society and workforce
Trend in U.S. is toward greater multiculturalism
Growth in three ethnic minorities:
• African-Americans
• U.S. Hispanics
• Asian-Americans
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27Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
MulticulturalismMulticulturalism
When all major ethnic
groups in an area--
such as a city, county, or
census tract--are roughly
represented.
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On Linehttp://www.bet.comhttp://www.multiculturalmarketingresources.com
On Linehttp://www.bet.comhttp://www.multiculturalmarketingresources.com
28Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Identify consumer and marketer reactions to the state of the economy.
55
29Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Economic FactorsEconomic Factors
Distribution of Consumer
Income
Distribution of Consumer
Income
InflationInflation
RecessionRecession
Economic Areas of Concern to
Marketers
Economic Areas of Concern to
Marketers
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30Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Rising IncomesRising Incomes
66% of U.S. households earn “middle-class” income
Over 10% earn over $75,000, primarilyfrom dual-income families
More discretionary income for high-end goods and services
55
31Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
InflationInflation
Prices rise with no wage increasePurchasing Power decreases
Increase profit margins by increasing efficiency
Consumers reaction:• Search for lowest prices• Rely on coupons and sales
55
32Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
RecessionRecession
Income, production and employment fall
Reduced demand for goods and services
55
33Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Recession Marketing Recession Marketing StrategiesStrategies
Improve existing products
Introduce new products
Maintain customer services
Emphasize top-of -the line productsand promote product value
55
34Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Identify the impact of technology on a firm.
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35Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Basic and Applied ResearchBasic and Applied Research
Basic ResearchBasic Research
AppliedResearchAppliedResearch
Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon.
Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon.
An attempt to develop new or improved products
An attempt to develop new or improved products
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36Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Technological & Resource Technological & Resource FactorsFactors
New technology is a weapon against inflation and recession
U.S. excels at basic and applied research
Information technology and the Internet have increased productivity
66
37Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Using Technology to Using Technology to Boost ProductivityBoost Productivity
66
38Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the political and legal environment of marketing.
77
39Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Political and Legal FactorsPolitical and Legal Factors
Consumers
Businesses Society
New Technology
Laws and Regulations ProtectLaws and Regulations ProtectLaws and Regulations ProtectLaws and Regulations Protect
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40Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Federal LegislationFederal Legislation
Sherman Act
Clayton Act
Federal Trade Commission Act
Robinson-Patman Act
Wheeler-Lea Amendments to the FTC Act
Lanham Act
Celler-Kefauver Antimerger Act
Hart-Scott-Rodino Act
77
41Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Regulatory AgenciesRegulatory Agencies
Consumer Product Safety Commission
Federal Trade Commission
Food & Drug Administration
77
On Linehttp://www.ftc.gov
On Linehttp://www.ftc.gov
42Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Regulatory AgenciesRegulatory Agencies
Consumer Product Safety Commission
Consumer Product Safety Commission
Federal Trade Commission
Federal Trade Commission
Food & Drug AdministrationFood & Drug
Administration
Protects consumer safety in and around their homes
Prevents unfair methods ofcompetition in commerce
Enforces safety regulations for food and drug products
77
On Linehttp://www.fda.gov
On Linehttp://www.fda.gov
43Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain the basics of foreign and domestic competition.
88
44Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Competitive FactorsCompetitive Factors
How many competitors?
How big are competitors?
How interdependent isthe industry?
Control
88
45Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Competitive FactorsCompetitive Factors88
Competition forCompetition forMarket ShareMarket Share
and and ProfitsProfits
Competition forCompetition forMarket ShareMarket Share
and and ProfitsProfits
Global Global CompetitionCompetition
Global Global CompetitionCompetition
46Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Global CompetitionGlobal Competition
More foreign firms are entering U.S. market
Foreign firms in U.S. now compete on product quality
Global markets are highly competitive
88
47Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe the role of ethics and ethical decisions in business.
99
48Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Ethics and MoralsEthics and Morals
EthicsEthics
MoralsMorals
The moral principles or values
that generally govern the conduct
of an individual.
The rules people develop as a result of cultural values and norms.
99
49Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Ethical Behavior in BusinessEthical Behavior in Business
Ethical?Ethical? Legal?Legal?
99
50Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Ethical Development LevelsEthical Development Levels
PreconventionalMorality
PreconventionalMorality
ConventionalMorality
ConventionalMorality
PostconventionalMorality
PostconventionalMorality
MoreMature
MoreSelfish
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51Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Morality and Business EthicsMorality and Business Ethics
PreconventionalMorality
PreconventionalMorality
Childlike level
Based on what will be punished or rewarded
Self-centered, calculating, selfish
99
52Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Morality and Business EthicsMorality and Business Ethics
ConventionalMorality
ConventionalMorality
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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53Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Morality and Business EthicsMorality and Business Ethics
PostconventionalMorality
PostconventionalMorality
Morality of the mature adult
Concern about how they judge themselves
Concern if it is right in the long run
99
54Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Ethical Decision MakingEthical Decision Making
Social Consensus
Social Consensus
Extent of ProblemsExtent of Problems
Top Management
Actions
Top Management
ActionsPotential
ConsequencesPotential
Consequences
Probability of Harm
Probability of Harm
Number AffectedNumber Affected
Time Until Consequences
Time Until Consequences
99
55Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Code of EthicsCode of Ethics
A guideline to help marketing
managers and other employees
make better decisions.
99
On Linehttp://www.ethics.ubc.ca/resources/business
On Linehttp://www.ethics.ubc.ca/resources/business
56Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Creating Ethical GuidelinesCreating Ethical Guidelines
Help identify acceptable business practices
Help control behavior internally
Reduce confusion in decision making
Facilitate discussion about right and wrong
99
57Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Unethical PracticesUnethical Practices99
58Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss corporate social responsibility.
1010
59Chapter 3 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Corporate Social Corporate Social ResponsibilityResponsibility
EthicalEthicalDo what is right.Do what is right.
LegalLegalObey the Law.Obey the Law.
EconomicEconomicBe profitable.Be profitable.
PhilanthropicPhilanthropicBe a good citizen.Be a good citizen.
1010On Linehttp://www.equalexchange.comhttp://www.crest.com
On Linehttp://www.equalexchange.comhttp://www.crest.com