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Chapter 3

Chapter 3. Decision Making in the New Era of Marketing: Ethics and the Marketing Environment. Chapter Objectives. Explain how organizations adopt a New Era marketing orientation on ethics and social responsibility Describe the New Era emphasis on quality. Chapter Objectives_2.

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Chapter 3

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  1. Chapter 3 Decision Making in the New Era of Marketing:Ethics and the Marketing Environment Marketing: Real People, Real Choices 3rd edition

  2. Chapter Objectives • Explain how organizations adopt a New Era marketing orientation on ethics and social responsibility • Describe the New Era emphasis on quality Marketing: Real People, Real Choices 3rd edition

  3. Chapter Objectives_2 • Discuss some of the important aspects of an organization’s internal environment • Explain why marketers scan an organization’s external business environment Marketing: Real People, Real Choices 3rd edition

  4. Doing it Right • Ethics are rules of conduct; Business ethics are basic values that guide firm’s behavior • Codes of ethics are written standards of behavior • bribery, political contributions, equal employment opportunity, environment, health, safety, etc. • Figure 3.2 provides the AMA code of ethics Marketing: Real People, Real Choices 3rd edition

  5. The Consumer Bill of Rights • President John F. Kennedy outlines in his 1961 inaugural speech what came to be known as the Consumer Bill of Rights: • The right to be safe • The right to be informed • The right to be heard • The right to choose freely Marketing: Real People, Real Choices 3rd edition

  6. Ethics in the Marketing Mix • Making a product safe • Pricing the product fairly • Promoting the product • Puffery versus deceptive advertising • Getting the product where it belongs • slotting allowances Marketing: Real People, Real Choices 3rd edition

  7. Social Responsibility • Management philosophy in which organizations engage in activities that have a positive effect on society and promote the public good • Tools of social responsibility • environmental stewardship • cause marketing • cultural diversity Marketing: Real People, Real Choices 3rd edition

  8. Environmental Stewardship • Firms make choices that protect the environment • Green marketing describes a type of environmental stewardship in which firms choose packages, product designs and other aspects of the marketing mix that are earth friendly Marketing: Real People, Real Choices 3rd edition

  9. Cause Marketing • Strategy of joining forces with a not-for- profit organization to tackle a social problem • Straight donations to a charity • Donations linked to consumer sales response Marketing: Real People, Real Choices 3rd edition

  10. Promoting Cultural Diversity • Cultural diversity programs ensure that marketing policies and hiring practices give people an equal chance to work for the company and buy its products • Examples of strong programs: • TJX (TJ Maxx, Marshalls) • American Airlines • Hertz Marketing: Real People, Real Choices 3rd edition

  11. A Focus on Quality • TQM • Adding a dose of quality Marketing: Real People, Real Choices 3rd edition

  12. TQM • Calls for company-wide dedication to development, maintenance, and continuous improvement of all aspects of the company’s operations • Seeks to assure customer satisfaction by involving all employees to continually improve quality • Malcolm Baldrige National Quality Award recognizes excellence in U.S. firms Marketing: Real People, Real Choices 3rd edition

  13. Adding a Dose of Quality • Product: Improve customer service support • Place: Improve on-time delivery rate • Price: Reduce costs to keep prices fair • Promotion: Provide information when it is convenient for customers Marketing: Real People, Real Choices 3rd edition

  14. The Internal Business Environment • Corporate Resources and Competencies • Corporate Culture • Risk-Taking Cultures • Profit-Centered versus People-Centered Cultures Marketing: Real People, Real Choices 3rd edition

  15. Where to Work • Fortune magazine publishes a list of the top places to work • The Container Store • SAS Institute • Cisco Systems • Southwest Airlines • Charles Schwab Marketing: Real People, Real Choices 3rd edition

  16. Scanning the External Environment • The Economic Environment • The Competitive Environment • The Legal Environment • The Technological Environment • The Sociocultural Environment Marketing: Real People, Real Choices 3rd edition

  17. The Economic Environment • The Business Cycle • All economies go through cycles of prosperity, recession, and recovery • The cycle directly affects marketers because of its effect on consumer behavior Marketing: Real People, Real Choices 3rd edition

  18. Consumer Confidence • The Power of Expectations • Consumer confidence represents consumer beliefs about what the future holds • Like business cycles, it affects whether consumers buy or cut back on spending Marketing: Real People, Real Choices 3rd edition

  19. The Competitive Environment • Analyzing the Competition • Strengths and weaknesses analysis • Competitive intelligence (CI) • Competition in the Microenvironment • Competition in the Macroenvironment Marketing: Real People, Real Choices 3rd edition

  20. Competition: The Microenvironment • competition means the alternatives from which the target may choose • Level 1: competition for discretionary income (for income left after a consumer pays for necessities) • Level 2: product competition in which different products attempt to satisfy the same needs or wants • Level 3: brand competition in which competitors offering similar products compete for consumer choice Marketing: Real People, Real Choices 3rd edition

  21. Competition: The Macroenvironment • Monopoly - one seller controls market • Oligopoly - relatively small number of sellers, each with a substantial share of market • Monopolistic - many sellers compete for buyers; each offers a slightly different product and has a small share of market • Perfect competition - many small sellers each offering the same product Marketing: Real People, Real Choices 3rd edition

  22. The Technological Environment • Technology is an investment a firm must make to succeed • Patents protect inventions Marketing: Real People, Real Choices 3rd edition

  23. The Legal Environment: Regulatory Agencies • Food and Drug Administration (FDA) • Federal Trade Commission (FTC) • Federal Communications Commission (FCC) • Interstate Commerce Commission (ICC) • Consumer Product Safety Commission (CPSC) • Environmental Protection Agency (EPA) Marketing: Real People, Real Choices 3rd edition

  24. The Sociocultural Environment • Characteristics of society • Characteristics of people in that society • Cultural values and beliefs • Popular culture Marketing: Real People, Real Choices 3rd edition

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