Key Concepts

Corporate Social Responsibility

Corporate Social Responsibility

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.

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.

A guideline to help marketing

managers and other employees

make better decisions.

Code of EthicsCode of Ethics

Dot.com bubble of 1990s Enron Madoff Subprime crisis Financial institutions - AIG, Wachovia, Lehman Brothers, Merrill Lynch and Citigroup

GREED ** IRRESPONSIBILITY GLOBAL CRISIS

Helps identify acceptable business practices

Helps control behavior internally

Avoids confusion in decision making

Facilitates discussion about right and wrong

DemographicsDemographics

SocialChangeSocial

Change

EconomicConditionsEconomicConditions

Political & Legal FactorsPolitical &

Legal FactorsTechnologyTechnology

CompetitionCompetition

EnvironmentalScanning

Target Market

External Environment (uncontrollable)

Ever-ChangingMarketplace

ProductDistributionPromotion

Price

ProductDistributionPromotion

Price

Internal (within the

organization)Marketing mix

A defined group most likely to

buy a firm’s product.

Target MarketTarget Market

Social factors that affect marketing

ValuesValues

AttitudesAttitudes

LifestyleLifestyle

Social Factors Influence:Social Factors Influence:

Products purchasedProducts purchased

Prices paid for productsPrices paid for products

Effectiveness of promotionsEffectiveness of promotions

How, where, and when people purchaseHow, where, and when people purchase

Self-SufficiencySelf-Sufficiency

Upward MobilityUpward Mobility

Work EthicWork Ethic

ConformityConformity

Core American Values

Ranked Characteristics of Product Quality

Reliability

Durability

Easy maintenance

Ease of use

Trusted brand name

Low price

Growth of dual-income families results in increased purchase power

Approximately 63% of work-age females are in the workforce

Women expect different things in life ◦ purchase bulk of technology products ◦ do most of the grocery shopping◦ second largest group of home buyers

after couples

Single households outnumber married households with kids

DemographyDemography The study of people’s

vital statistics, such as

their age, race and

ethnicity, and location.

Pre- and early adolescents, age 8 to 14

Population of 29 million

Purchasing power of $39 billion in 2007

View TV ads as “just advertising”

Emerging as “the richest generation” and the “most influential generation in history”

Born between 1979 and 1994 Population of 60 million Purchasing power of $200 billion annually

Researchers have found Gen Yers to be:◦ Impatient◦ Family-oriented◦ Inquisitive◦ Opinionated◦ Diverse◦ Time managers◦ “Street Smart”

Word of mouth marketing is effective

http://www.mountaindew.comhttp://www.northface.com

Born between 1965 and 1978

Population of 40 million

Savvy and cynical consumers

Time is at a premium, and outsourcing is utilized

Entering their money-making years

Born between 1946 and 1964 Population of 77 million—the largest

demographic segment $1 trillion in spending power for

people aged 50 to 60 Income will continue to grow

as they keep working

AgeTweens

8 to 14 yrs29 million

Gen Y

1979-199460 million

Gen X

1965-197840 million

Baby Boom

1946-196477 million

The importance of multiculturalism and growing ethnic markets to marketing managers

Spending power of ethnic markets by 2008:

Hispanics: $1 trillion

African Americans: $921 billion

Asian Americans: $526 billion

Diversity can result in bottom-line benefits to companies.

The population’s diversity creates challenges for targeting this group.

Hispanics tend to be brand loyal, but are not aware of many U.S. brands.

Nearly half of adult U.S. Hispanics have home Internet access.

Many firms are creating products for the African American market.

Promotional dollars and media choices directed toward African Americans continue to increase.

Younger, better educated, and have highest average income of all groups

Many products have been developed for Asian American market.

Cultural diversity within the Asian American market complicates promotional efforts.

Consumer and marketer reactions to the state of the economy

Economic Factors

Distribution of Consumer Income

Inflation

Recession

Consumers’ Incomes

LO7

Median U.S. household income in 2007 projected at $45,000

Incomes have risen at a slow pace.

Education is the primary determinant of earning potential.

Consumers are strapped for cash.

The Financial Power of Women

Women bring in half of the household income.

Women control 51.3 percent of the private wealth in the U.S.

Women control 80 percent of household spending.

Women are now the primary buyers in male-dominated categories: 68% of new cars 66% of computers 66% of home improvements 53% of investments 51% of consumer electronics

Recession

A period of economic activity

characterized by negative growth,

which reduces demand for goods

and services.

RecessionRecession

Recession Marketing Strategies

Improve existing products and introduce new ones

Maintain and expand customer services

Emphasize top-of-the-line products and promote product value

The impact of technology on a firm

Technological Factors

U.S. excels at basic and applied research.

Many firms use the market concept to guide research.

New technology internally creates a long-term competitive advantage.

External technology Creates more efficient operation or better

products May render existing products obsolete

Technological Factors

Innovation is becoming a global process.

New technologies create new opportunities

RSS (Really Simple Syndication)

Blogging

BasicResearch

BasicResearch

MarketingMix

MarketingMix

AppliedResearch

AppliedResearch

TechnologyAdvances

TechnologyAdvances

Political and Legal Factors

New technology Society Businesses Consumers

Laws and Regulations Protect:Laws and Regulations Protect:

Federal Legislation

Sherman ActClayton ActFederal Trade Commission Act Celler-Kefauver Antimerger ActHart-Scott-Rodino Act

Sherman ActClayton ActFederal Trade Commission Act Celler-Kefauver Antimerger ActHart-Scott-Rodino Act

Regulate competitive

environment

Robinson-Patman ActRobinson-Patman ActRegulate

pricing practices

Wheeler-Lea ActWheeler-Lea ActControl falseadvertising

Regulatory 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

http://www.ftc.gov

Powers of the FTC

Cease-and-Desist OrderCease-and-Desist Order

Consent DecreeConsent Decree

Affirmative DisclosureAffirmative Disclosure

Corrective AdvertisingCorrective Advertising

RestitutionRestitution

CounteradvertisingCounteradvertising

Consumer Privacy

Gramm-Leach-Bliley Act

Health Insurance Portability and Accountability Act (HIPPA)

California’s Notice of Security Breach Law

Government ActionsGovernment Actions