lamb, marketing 5ce, chapter 3, student...

Lamb, Marketing 5CE, Chapter 3, Student Handout

Copyright ©2012 Nelson Education Limited. All rights reserved. 1

Lecture PowerPoint® slides to accompany

Canadian Adaptation prepared by Don Hill, Langara College

1Copyright © 2012 Nelson Education Limited

Chapter 3: Ethics and the Marketing Environment


LO1

LO2

Discuss corporate social responsibility

Describe the role of ethics and ethicaldecisions in business

Learning Outcomes

LO3 Discuss the external environment of marketingand explain how it affects a firm

Describe the social factors that affect marketingLO4




Explain the importance to marketing managers of current demographic trends

Explain the importance to marketing LO6

LO5

Learning Outcomes

p p gmanagers of multiculturalism and growing ethnic markets

Identify consumer and marketer reactions to the state of the economy

LO6

LO7


Learning Outcomes

Identify the impact of technology on a firm

Discuss the political and legal environment of marketing

LO8

LO9marketing

Explain the basics of foreign and domestic competition

LO10


Corporate Social Responsibility

Discuss corporate social

LO1

Discuss corporate social responsibility.




Sustainability

The idea that sociallyresponsible companies will outperform their peers by

focusing gon the world’s social

problems, viewingthem as opportunities to build

profits and help the world at the same time.

LO1 7Copyright © 2012 Nelson Education Limited

Review Learning OutcomeLO1

Discuss Corporate Social Responsibility

EthicalEthicalDo what is right.Do what is right.

PhilanthropicPhilanthropicBe a good citizen.Be a good citizen.

LegalLegalObey the Law.Obey the Law.

EconomicEconomicBe profitable.Be profitable.


Green Marketing

The developmentand marketing of products

designed to minimize negativedesigned to minimize negativeeffects on the physical

environment or to improvethe environment.




Ethical Behavior

LO2

Describe the role of ethics and ethical decisions in business.


Ethical Behavior

EthicsEthics

The moral principles or values

that generally govern the

d t f i di id lconduct of an individual.


Ethical Behavior in Business

Morals – The rules people develop as a p

result of cultural values and norms.




Ethical Development Levels

PreconventionalMorality

MoreChildlike

• Based on what will be punished or rewarded

• Self-centered, calculating, selfish

ConventionalMorality

PostconventionalMorality

MoreMature

• Moves toward the expectations of society

• Concerned over legality and the opinion of others

• Concern about how they judge themselves

• Concern if it is right inthe long run


Ethical Decision MakingInfluential Factors

Extent of Problems

Top Management Actions on ethics

Probability of Harm

Time UntilConsequences

Potential Magnitude of the Consequences

Social Consensus

q

Number Affected


Code of Ethics

Code of Ethics- A guideline to helpmarketing managers and other

l k b d i iemployees make better decisions.




Creating Ethical Guidelines

• Helps identify acceptable business practices

• Helps control behaviour internally

• Avoids confusion in decision making

• Facilitates discussion about right and wrong


Ethics Checklist

Exhibit 3.3


Review Learning OutcomeDescribe the Role of Ethics and Ethical Decisions in

Business

LO3




The External Marketing Environment

Discuss the external environment of marketing

LO3

environment of marketing, and explain

how it affects a firm


Target Market

Target market- A defined groupTarget market A defined groupmost likely to buy a firm’s

product.


Understanding the External Environment

EnvironmentalScanning

Goalto Identify Future

MarketOpportunities

A d

21Copyright © 2012 Nelson Education LimitedLO3

And Threats




DemographicsDemographics

SocialChangeSocial

Change

EconomicConditionsEconomicConditions

External Environment (uncontrollable)

Ever-ChangingMarketplace

ProductDistribution

ProductDistribution

Internal (within the

organization)Marketing mix

External Environment of Marketing

Political & Legal Factors

Political & Legal Factors

TechnologyTechnology

CompetitionCompetition

EnvironmentalScanning

Target Market

DistributionPromotion

Price

DistributionPromotion

Price


Social Factors

LO4

Describe the social factors that affect marketing.


Social Factors

AttitudesAttitudes

ValuesValues

LifestyleLifestyle




Self-SufficiencySelf-Sufficiency

Upward MobilityUpward Mobility

Social Factors

Work EthicWork Ethic

ConformityConformity

Basic Canadian Values


Social Factors

Social Factors

LO4

Values ComponentLifestyles

Changing Role of Women


Component Lifestyles

The practice of choosing goods and services that meet one’sand services that meet one sdiverse needs and interests

rather than conformingto a single, traditional lifestyle.




Role of Families and Working Women

• The phenomena of working women has had the greatest effect on marketing than any other social change

• Nearly two-thirds of all women (ages 18-65) are in the kfworkforce

• Purchasing power from dual-career families is rising– Less time for family activities

• Cost is more important to women. Quality is more important to men.



Social Factors that Affect Marketing


Demographic Factors

Explain the importance

LO3

to marketing managers of current demographic trends.




Demographic Factors

Demography- The study of people’svital statistics, such as their age, race and ethnicity, and location.


Demographic Facts


Tweens

Pre- and early adolescents, age 9 to 14

Population of 2.3 million

Purchasing power of $2 billion annually

LO5

View TV ads as “just advertising”




Teens

Population of 3 million in Canada


Approximately 70 hours per week tuned in

LO5

electronically

Participate in social networks

Shopping has become social sport– Connected


Generation Y Born between 1979 and 1994

Population of 7 million


Researchers have found Gen Yers to be:– Impatient

il i d– Family-oriented– Inquisitive– Opinionated– Diverse– Time managers– “Street Smart”– Connected


Generation X

Born between 1965 and 1978


Savvy and cynical consumers

More protective and involved with their kids

Value the importance of education

Avid buyers of the latest clothes, technology, and recreational products




Baby Boomers Born between 1946 and 1964

Population of 9 million—the largest demographic segment

Many Boomers expect to continue working past 65.

• Account for a significant part of shopping dollars spent on packaged goods

Four segments of baby boomers:“Looking for balance” “Confident and living well” “At ease” “Overwhelmed”


Older Consumers Over 65


Wealthier, healthier, and better educated than earlier generations

Keep up with the times definite about wants Keep up with the times, definite about wants and needs, and have unique behaviour patterns

Feel that marketers ignore them

Fastest growing segment



Current Demographic Trends




Growing Ethnic Markets

Explain the importance of marketing

LO6

managers of multiculturalism and growing

ethnic markets.


Visible Minority

Persons, other than Aboriginalpeoples, who are non-Caucasian

in race or non-white in colour.


Growing Ethnic Markets

Immigrant’s are the main source of population growth

Nearly 250,000 arriving each year

Three-quarters of the immigrants arriving are visible minorities

Currently 16 percent of Canadians are visible minorities

Expected to grow to 31 percent by 2031




Visible Minorities in Canada


Ethnic and Cultural Diversity

Multiculturalism: occurs when all major ethnic groups in an area (city, county, or census metropolitan area) are roughly equally represented

Canadian trend is toward greater multiculturalism

Greatest multiculturalism is in the largest metropolitan areas


Implications of Multiculturalism

• Diversity can result in bottom-line benefits to companies

• Ethnic markets are not homogeneous

• Many niches requiring micromarketing y g gstrategies

• Growth in Internet usage within ethnic markets outpaces the general public





Multiculturalism and Growing Ethnic Markets


Economic Factors

Identify consumer and marketer reactions to the

LO7

marketer reactions to the state of the economy.


Economic Factors

Consumer’s Income

Inflation

Recession




Consumers’ Incomes

• Median Canadian household income in 2010 was approximately $66,550.

• Incomes have risen at a slow pace• Incomes have risen at a slow pace.

• New level of affluence cuts across all household types.– Not limited to professionals, age or

educationLO7 49Copyright © 2012 Nelson Education Limited

Purchasing Power

Purchasing Power- A comparisonof income versus the relative cost

of a set standard of goods andof a set standard of goods and services in different geographic

areas.


Inflation

Inflation- A measure of the decreasein the value of the money, expressedy, pas the percentage reduction in value

since the previous year.




Recession

Recession- A period of economic activity characterized by negativey y g

growth which reduces demandfor goods and services.


Recession Marketing Strategies

• Redouble efforts to cut costs

• Lower prices to attract new customers and hold existing onesexisting ones



Economic Factors




Technological Factors

Identify the impact of a technology firm

LO8

technology firm.


Research

Basic research – pure research thataims to confirm an

existing theoryor to learn more about a concept

or phenomenon

Applied research – an attempt to developnew or improved products



• New technology is a weapon against inflation and recession

• Canada excels at basic research and is improving at applied researchresearch.

• Information technology and the Internet have been driving increased productivity

• Many firms use the marketing concept to guide research.




• New technology creates a long-term competitive advantage.

• The most innovative firms have an average profit


g pmargin growth of 3 percent higher than the typical firm.



Impact of Technology on a Firm

BasicResearch

BasicResearch

AppliedResearchApplied

ResearchTechnologyAdvances

TechnologyAdvances

MarketingMix

MarketingMix


Political and Legal Factors

Discuss the political and

LO9

legal environment of marketing.




Political and Legal Factors

New technology

Laws and Regulations Protect:Laws and Regulations Protect:

gy

Society

Businesses

Consumers


Competition Bureau

Competition Act

Packaging and Labelling Act

LO9

Textile Labelling Act

Precious Metals Act

Competition Bureau



Political and Legal Environment of Marketing

ProtectingConsumer

ProtectingBusiness

Federal Legislation

Provincial Legislation

Self-Regulation




Competitive Factors

LO10

Explain the basics of foreign and domestic competition.


Competitive Factors

How many competitors?

How big are competitors?

LO10

Specific strategies?

How strong and aggressive?

How interdependent isthe industry?


Competition for Market Share and Profits

• Firms must work harder to

Global Competition

• More foreign firms are entering Canadian

k t

Competitive Factors

maintain profits and market share.

market.

• Foreign firms in Canada now compete on product quality.





Mature Industries

Highly Competitive Marketplace

Foreign and Domestic Competition

Slow Growth / No Growth

Can only increasemarket share bytaking it from a competitor.


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