chapter 14 marketing environments and ethics. learning objectives 1discuss the external environment...
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Chapter 14Marketing environments
and ethics
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Learning objectives
1 Discuss the external environment of marketing, and explain how it affects an organisation
2 Describe the sociocultural factors that affect marketing
3 Explain the importance to marketing managers of current demographic trends
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Learning objectives (cont.)
4 Explain the importance to marketing managers of multiculturalism and growing ethnic markets
5 Identify consumer and marketer reactions to the state of the economy
6 Identify the impact of technology on an organisation
7 Discuss the political and legal environment of marketing
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Learning objectives (cont.)
8 Explain the basics of foreign and domestic competition
9 Describe the role of ethics and ethical decisions in business
10 Discuss corporate social responsibility
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Learning objective 1
Define the term marketingDiscuss the external environment of marketing, and explain how it affects an organisation
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Target market
A defined group most
likely to buy a firm’s
product.
1
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External marketing environmentExternal environment
is not controllable
Ever-changing marketplace
1
Target market
Product Distribution
PricingIntegrated marketing
communication
Competitive environment
Technological environment
Political and legal environment
Sociocultural environment
Economic environment
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External environmental factors1
• Social
• Demographic
• Economic
• Technological
• Political and legal
• Competitive
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Learning objective 2
Describe four marketing management philosophies.
Describe the sociocultural
factors that affect
marketing
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Sociocultural factors2
Age factors
• Generation Y
• Generation X
• Baby boomers
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Age groups: Generation Y
• Born between 1979 and 1994
• Size creates immense marketing impact
• Respond to ads differently
2
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Age groups: Generation X
• Born between 1965 and 1978
• Savvy and cynical consumers
• Indulge themselves with meals, alcohol, clothing and electronics
2
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Age groups: Baby boomers
• Born between 1946 and 1964
• Cherish youth, convenience and individuality
• Individualism has led to a personalised economy
2
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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.
2
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Learning objective 3
Describe four marketing management philosophies.
Explain the importance to marketing managers of current demographic trends
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Components of Australian natural population increase
3
0
5
10
15
20
25
30
1901 1920 1940 1960 1980 2000
Crude birth rate
Crude death rate
ABS
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Demographic factors3
• Age
• Location
• Ethnicity
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Learning objective 4
Explain the importance to
marketing mangers of
multiculturalism and
growing ethnic markets
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Growing ethnic markets
• Australian population is becoming a multicultural society and workforce.
• Trend in Australia is toward greater multiculturalism.
4
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Multiculturalism
When a society has more than one ethnic culture, the society receives benefits as a result of this diversity
4
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Multicultural marketing4
Marketing strategies for multicultural markets
• Niche marketing
• Adapting promotion
• Stitching niches
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Learning objective 5
Identify consumer and marketer reactions to the state of the economy
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Economic areas of concern to marketers
5
• Distribution of consumer income
• Inflation
• Recession
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Inflation
• Prices rise with no wage increase.
• Purchasing power decreases.
• Increase profit margins by increasing efficiency.
• Consumers’ reaction:- search for lowest prices- rely on sales.
5
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Recession
• Income, production and employment fall.
• Reduced demand for goods and services.
5
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Recession marketing strategies
• Improve existing products.
• Maintain and expand customer service.
• Emphasise top-of-the-line products.
5
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Learning objective 6
Identify the impact of
technology on an
organisation
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Primary research
Pure research that aims to
confirm an existing theory
or to learn more about a
concept phenomenon.
6
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Applied research
An attempt to develop new
or improved products.
6
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Learning objective 7
Discuss the political and legal environment of marketing
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Political and legal factors
Every aspect of the marketing mix is subject to laws and regulations
7
• Product• Price• Place• Promotion
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Australian Competition and Consumer Commission (ACCC)
Ensures compliance with partsIV, IVA, V and VA of the Trade Practices Act, Conduct Code and Prices Surveillance Act. Actively pursues violations of their marketing statutes.
7
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Explain the basics of
foreign and domestic
competition
Learning objective 8
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Competitive factors
• How many competitors?
• How big are competitors?
• How interdependent is industry?
8
No control
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Competition
Global competitionProvide same product in all markets around the world
International competitionModified products for different countries
8
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Describe the role of
ethics and ethical
decisions in business
Learning objective 9
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Ethics
The moral principles or
values that generally
govern the conduct of
an individual.
9
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Morals
The rules people develop as a result of cultural values and norms.
9
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Ethical behaviour in business9
• Who is helped or hurt?
• How long-lasting are the consequences?
• What actions produce the greatest good for the greatest number of people?
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Ethical development levels9
More selfish
More mature
Preconventional morality
Conventional morality
Postconventional morality
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Ethical decision-making
• Extent of ethical problems within the organisation
• Top management actions on ethics• Potential magnitude of the consequences• Social consensus• Probability of a harmful outcome• Length of time between the decision and
the onset of consequences• Number of people to be affected
9
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Code of ethics
A guideline to help
marketing managers and
other employees make
better decisions.
9
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Creating ethical guidelines9
• Helps identify acceptable business practices.
• Helps control behaviour internally.
• Reduces confusion in decision-making.
• Facilitates discussion about right and wrong.
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Discuss corporate social
responsibility
Learning objective 10
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Corporate social responsibility10
Philanthropic – Be a good citizen
Ethical – Do what is right
Legal – Obey the law
Economic – Be profitable