4 marketing environments

3Ethics and Social Responsibility

Professor Close

Corporate Social Responsibility (1)

• CSR = businesses’ concern for societal welfare

• Ethics = moral values guiding a leader or organization

• Morals = rules developed by cultural values/norms

• Can you think of any companies that practice CSR?

Corporate Social Responsibility (2)

• Happy people = good business• If you have to ask “is this ethical?...” it

likely is NOT cool• Need to rethink long terms solutions

Marketing Environment (1)

• Factors outside our control in the short run (CPA)

• Consider the strategy (where are the opportunities?)

• Broad objectives: beyond pleasing our customers

Marketing Environment (2)• Broad objectives:

– Useful function (Wang computers)• Need satisfaction (Hallmark)• PR purposes (RJR vs. Alcohol)

– Organization to support• Entrepreneur’s challenge• Example: organization charts

– Profit (#1, long run)• Other financial subordinate (market share, Eastern)• Time horizon: When will firm generate profit? (Amazon)• Considers resources (how many years)


• Compatibility is a key• Question to consider: do you think Wal-

Mart can focus on both quality and price? What about their labor issues?

Simpsons on Wal-Mart


• Resources: remember 2x2 matrix; how to find strong areas– Examine functional areas

• Financial: Wal-Mart (purchasing)• Production:

– Larger capacity (cost/unit, economy of scale)– Flexibility (Sara Lee and what else?)– Often opposed

• Marketing:– Brand strength – Channel relationships (car dealers, franchisees, and what

else?)


• Preferable Combination– Example: Wal-Mart - financial, distribution,

and relationships– What other example can you think of that has

a strong combination?

Finding Opportunities (1)

• Types of opportunities:– Market penetration

• Current products and markets• Examples include

– Increase rate of use (shampoo, Coke, and what else??)– Longer duration (airlines and what else??)

• Advantage of market penetration is that it is the easiest method

• Disadvantage is the threat of saturation


• Types of opportunities:– Market development

• Current products, new markets• Example: international expansions

– What successful or unsuccessful international expansions can you think of?

• Advantages include high potential• Disadvantages include applicability (KFC in Japan)

Lipton is Asia…Think it will work?


• Types of opportunities:– Product development

• Current markets, new products• Examples: autos, fashion, and what else??• Advantages include knowing the customer already• Disadvantages include cannibalization (Gillette)


• Types of opportunities:– Diversification

• New market and product• Examples: McDonalds and what else??• Advantage includes high potential• Disadvantage include high risk (ITT – Sheraton)

Social Factors

• American values (upward mobility, work ethic, self-sufficiency, conformity)– Culture: manner in which people live– Very broad

• Women’s role (U.S. vs Japan)• Fitness• Debt• Time-poor society

Economic Factors• Economy: a system of producing,

distributing, & consuming wealth (what is our purchasing power?)– Shifts (purchasing declines in recession)– Examples:

• Interest rates influence buying (0% financing)• Rising costs, inflation unavoidable

– Good life = debt?– Why are we so in debt?

Technological Factors

• Technological: application of knowledge to perform tasks more efficiently/effectively

• Effective: accomplishing tasks• Efficient: accomplishing tasks with minimum use of

resources– Base of economic environment (research)– Technology transfer is rapid (Pentium chips

and what else?)• RSS and blogging

– Ethics: consumer research (hits on web sites, selling your info, privacy??)

Technology Changing Lifestyles

Political Factors

• Political– International

• Nationalism: emphasis on “our” country influences trade (buy American)

• Trade groups: ease trade among members– EU – lowers trade barriers among European nations

(looking East)– NAFTA – Canada, U.S., and Mexico– What do you see as the advantages and disadvantages

of each?• Consumerism

– Champions individual vs company– Ralph Nader – unsafe @ any speed

Legal Factors (1)

• Legal (close with political)– Philosophy:

• Competition is encouraged• Federal law conveys intent, but not detailed

interpretation– Sellers must:

• Tell the truth• Meet contracts

Legal Factors (2)

• Legal (continued)– Regulations:

• Food and drugs must be safe & sanitary• Magnuson-Moss Act: warranties• Robinson-Patman Act: price discrimination• Consumer Product Safety Commission (sets

standards)– Protects from unsafe products (bicycle – unsafe)– Stricter on children

• State/local laws vary (California)– Let the buyer beware (pro-consumer)

Should this be an illegal ad?

Competitive Factors

• Competitors– Fight for market share or profits– Tend to become similar (sodas, beer, any

others?)– Competitive barriers

• Position difficult to copy (any area of firm)• Marketing helps maintain distinction (image, etc)• Can usually avoid “head on” competition

– We love competition, why?

Who Killed My Little Pony?

Summary• Marketing environment and strategy• Six environments

– Social– Economic– Technology– Political– Legal– Competitive

• Note: we will over demographic factors in a following unit.

• Any questions?

4 marketing environments

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