Decision Making in the New Era of Marketing: Ethics and the Marketing Environment

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Chapter 3

• Decision Making in the New Era of
  MarketingEthics and the Marketing Environment

2
Chapter Objectives

• Explain how organizations adopt a New Era
  marketing orientation on ethics and social
  responsibility
• Describe the New Era emphasis on quality

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Chapter Objectives_2

• Discuss some of the important aspects of an
  organizations internal environment
• Explain why marketers scan an organizations
  external business environment

4
Doing it Right

• Ethics are rules of conduct Business ethics are
  basic values that guide firms 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

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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

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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

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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

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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

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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

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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

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A Focus on Quality

• TQM
• Adding a dose of quality

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TQM

• Calls for company-wide dedication to development,
  maintenance, and continuous improvement of all
  aspects of the companys 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

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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

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The Internal Business Environment

• Corporate Resources and Competencies
• Corporate Culture
• Risk-Taking Cultures
• Profit-Centered versus People-Centered Cultures

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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

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Scanning the External Environment

• The Economic Environment
• The Competitive Environment
• The Legal Environment
• The Technological Environment
• The Sociocultural Environment

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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

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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

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The Competitive Environment

• Analyzing the Competition
• Strengths and weaknesses analysis
• Competitive intelligence (CI)
• Competition in the Microenvironment
• Competition in the Macroenvironment

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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

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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

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The Technological Environment

• Technology is an investment a firm must make to
  succeed
• Patents protect inventions

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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)

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The Sociocultural Environment

• Characteristics of society
• Characteristics of people in that society
• Cultural values and beliefs
• Popular culture