Chapter 3
The Marketing
Environment, Ethics,
and Social
Responsibility
CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Chapter Objectives
1.  Identify the five components of the marketing environment.
2.  Explain the types of competition marketers face and the steps
necessary for developing a competitive strategy.
3.  Describe how marketing activities are regulated and how
marketers can influence the political-legal environment.
4.  Outline the economic factors that affect marketing decisions
and consumer buying power.
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Chapter Objectives
5.  Discuss the impact of the technological environment on a
firm’s marketing activities.
6.  Explain how the social-cultural environment influences
marketing.
7.  Describe the ethical issues in marketing.
8.  Identify the four levels of the social responsibility pyramid.
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Environmental Scanning
o  Collecting external marketing environment
information to identify and interpret potential trends
o  Environmental management - Attainment of
organizational objectives by predicting and influencing
the competitive, political-legal, economic,
technological, and social- cultural environments
o  Strategic alliance - Partnership in which two or more
companies combine resources and capital to create
competitive advantages in a new market
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
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2012
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Learning.
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
The Competitive Environment
o  Interactive process that occurs in the marketplace
among:
o  Marketers of directly competitive products
o  Marketers of products that can be substituted for one
another
o  Marketers competing for the consumer’s purchasing
power
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
The Political-Legal Environment
o  Consists of laws and their interpretations that require
firms to operate under competitive conditions and to
protect consumer rights
o  Ignorance or non-compliance can result in fines,
negative publicity, and civil damage suits
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2012
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
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2012
by
South
Western,
a
division
of
Cengage
Learning.
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rights
reserved.
CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Copyright
©
2012
by
South
Western,
a
division
of
Cengage
Learning.
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rights
reserved.
CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
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2012
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Cengage
Learning.
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
The Economic Environment
o  Gross domestic product (GDP) - Sum of all goods and
services produced by a nation in a year
o  Economic environment - Factors that influence
consumer buying power and marketing strategies
o  Business cycle - Pattern of stages in the level of
economic activity
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Stages in the Business Cycle
o  Prosperity - Consumer spending is brisk; growth in
services sector
o  Recession - Consumers focus on basic, fundamental
products
o  Depression - Consumer spending sinks to its lowest
level
o  Recovery - Consumer purchasing power increases
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
The Technological Environment
o  Application of knowledge based on discoveries in
science, inventions, and innovations to marketing
o  Technology leads to:
o  New products
o  Improvements in existing products
o  Better customer service
o  Reduced prices
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
The Social-Cultural Environment
o  The relationship between the marketer, society, and
culture
o  Marketers must be sensitive to demographic shifts and
changing values
o  Increasing importance of cultural diversity
o  Example: Univision and Telemundo face growing
competition in Spanish-language television
programming
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Consumerism
o  Social force within the environment that aids and
protects the consumer by exerting legal, moral, and
economic pressures on business and government
o  Consumer rights:
o  The right to choose freely
o  The right to be informed
o  The right to be heard
o  The right to be safe
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Ethics in Marketing Research
o  Consumers are concerned about privacy
o  Proliferation of databases
o  Selling of address lists
o  Ease with which consumer information can be gathered
o  Several agencies offer assistance to Internet consumers
o  The U.S. government maintains a Do Not Call registry
to prevent unwanted telemarketing
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Source: The Four Step Pyramid of Corporate
Social Responsibility from Business Horizons,
Vol. 34, 1991, page 92, Freeman & Liedtka,
“Corp. Social Responsibility.” Reprinted from
Business Horizons © 1991 with permission
From Elsevier.
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CHAPTER 3 The Marketing Environment, Ethics, and Social Responsibility
Marketing’s Responsibilities
o  Marketers must consider:
o  The global effects of their decisions
o  The long-term effects of their decisions
o  The well-being of future generations
o  Entire communities can benefit through socially
responsible investing
o  Green marketing - Production, promotion, and
reclamation of environmentally sensitive products
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2012
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