1. CHAPTER 3 Social Responsibility, Ethics, and the Marketing Environment Prepared by Deborah Baker Texas Christian University Designed by Eric Brengle B-books, Ltd. Introduction to Marketing McDaniel, Lamb, Hair 9

2. Learning Outcomes LO I LO 2 LO 3 Discuss corporate social responsibility Describe the role of ethics and ethical decisions in business Discuss the external environment of marketing, and explain how it affects a firm

3. Learning Outcomes Describe the social factors that affect marketing Explain the importance to marketing managers of current demographic trends Explain the importance to marketing managers of multiculturalism and growing ethnic markets LO 5 LO 6 LO 4

4. Learning Outcomes Identify consumer and market reactions to the state of the economy Identify the impact of technology on a firm Discuss the political and legal environment of marketing Explain the basics of foreign and domestic competition LO 9 LO IO LO 8 LO 7

5. Corporate Social Responsibility Discuss corporate social responsibility LO I

6. Corporate Social Responsibility LO I The idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time. Sustainability

7. REVIEW LEARNING OUTCOME LO I Corporate Social Responsibility Ethical Do what is right. Legal Obey the Law. Economic Be profitable. Philanthropic Be a good citizen.

8. Ethical Behavior in Business Describe the role of ethics and ethical decisions in business LO 2

9. Ethical Behavior in Business LO 2 Ethics Morals 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.

11. Ethical Decision Making LO 2 Influential Factors Extent of Problems Top Management Actions Potential Consequences Social Consensus Probability of Harm Time Until Consequences Number Affected

12. Biz Flix Jaws LO 2

13. Code of Ethics LO 2 Code of Ethics A guideline to help marketing managers and other employees make better decisions. http://www.ethicsweb.ca Online

15. Ethical Norms and Values for Marketers LO 2 Exhibit 3.3

16. The External Marketing Environment Discuss the external environment of marketing, and explain how it affects a firm LO 3

17. External Marketing Environment LO 3 Demographics Social Change Economic Conditions Political & Legal Factors Technology Competition Environmental Scanning Target Market External Environment (uncontrollable) Ever-Changing Marketplace Product Distribution Promotion Price Internal (within the organization) Marketing mix

18. Target Market LO 3 Target Market A defined group most likely to buy a firm’s product.

19. Social Factors Describe the social factors that affect marketing LO 4

20. Social Factors LO 4 Values Attitudes Lifestyle

21. Social Factors LO 4 Social Factors Influence: Products purchased Prices paid for products Effectiveness of promotions How, where, and when people purchase

22. Social Factors LO 4 Core American Values Self-Sufficiency Upward Mobility Work Ethic Conformity

23. The Influence of Values on Buying Habits LO 4 Ranked Characteristics of Product Quality Reliability Durability Easy maintenance Ease of use Trusted brand name Low price

24. Component Lifestyles LO 4 Component Lifestyles The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.

26. REVIEW LEARNING OUTCOME LO 4 Social Factors that Affect Marketing

27. Demographic Factors Explain the importance to marketing managers of current demographic trends LO 5

28. Demographic Factors LO 5 Demography The study of people’s vital statistics, such as their age, race and ethnicity, and location.

33. REVIEW LEARNING OUTCOME LO 5 Current Demographic Trends Age Tweens 8 to 14 yrs 29 million Gen Y 1979-1994 60 million Gen X 1965-1978 40 million Baby Boom 1946-1964 77 million

34. Growing Ethnic Markets Explain the importance to marketing managers of multiculturalism and growing ethnic markets LO 6

39. REVIEW LEARNING OUTCOME LO 6 Multiculturalism and Growing Ethnic Markets

40. Economic Factors Identify consumer and marketer reactions to the state of the economy LO 7

41. Economic Factors LO 7 Distribution of Consumer Income Inflation Recession

44. Purchasing Power LO 7 Purchasing Power A comparison of the relative cost of a set standard of goods and services in different geographic areas.

45. Inflation LO 7 Inflation A measure of the decrease in the value of the money, expressed as the percentage reduction in value since the previous year.

46. Recession LO 7 Recession A period of economic activity characterized by negative growth, which reduces demand for goods and services.

48. Technological Factors Identify the impact of technology on a firm LO 8

49. Research LO 8 Basic Research Applied Research 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

52. REVIEW LEARNING OUTCOME LO 8 Impact of Technology on a Firm Basic Research Marketing Mix Applied Research Technology Advances

53. Political and Legal Factors Discuss the political and legal environment of marketing LO 9

56. Regulatory Agencies LO 9 http://www.ftc.gov Consumer Product Safety Commission Federal Trade Commission Food & Drug Administration Protects consumer safety in and around their homes Prevents unfair methods of competition in commerce Enforces safety regulations for food and drug products Online

57. Powers of the FTC LO 9 Cease-and-Desist Order Consent Decree Affirmative Disclosure Corrective Advertising Restitution Counteradvertising

59. REVIEW LEARNING OUTCOME LO 9 Political and Legal Environment of Marketing

60. Competitive Factors Explain the basics of foreign and domestic competition LO IO

63. REVIEW LEARNING OUTCOME Political and Legal Environment LO IO Mature Industries Slow Growth / No Growth Highly Competitive Marketplace Can only increase market share by taking it from a competitor.