•
•
•
•
•
Generation Z (1995-2009) —Brand consciousness, easy access to information, and technical
sophistication have made this age group a fast growing and attractive segment for marketers.
Generation Y (1979–2000) —Their purchase decisions are influenced by a heightened sense of
social responsibility, environmental conscientiousness, and a better work–life balance.
Generation X (1966–1978) —A generation of dual-career households with competing demand for their
time. Though influential, many companies at times tend to ignore them.
Baby Boomers—The largest demographic segment today, they have a high income potential and the
larger part of the population lives in metropolitan areas.
DEMOGRAPHIC FACTORS
Target
Market
Environmental
scanning
continually
collects and
evaluates
information.
Marketing managers can only shape and reshape the
marketing mix to react to the external environment, in
an attempt to influence the target market.
Understanding the
external
environment will
help a firm to
intelligently plan
for the future.
factors (CREST model).
Companies cannot control the elements in the external
environment that continually evolve. The environment
reshapes the target market. Factors within the external
environment can be classified as competitive,
regulatory, economic, social, and technological
THE EXTERNAL MARKETING
ENVIRONMENT
Every aspect of the marketing mix is subject to laws and restrictions.
Federal legislation—The Competition Bureau enforces several laws covering areas such as bankruptcy, trade
practices, competition, credit, labelling, packaging, copyrights, hazardous products, patents, and trademarks.
Provincial and territorial laws—Companies that market their products across Canada will have to change their
communication and other trade practices depending on provincial legislation.
Self-regulation—Business groups have formed associations to police themselves guided by a code of conduct.
Consumer privacy—Marketing managers must be aware of legislation that relates to privacy as they develop
their marketing strategies.



Encompasses competitors a firm must face,
both directly and indirectly.
Management has little control over the
competitor environment.
Porter’s Five Forces of Competition (direct
competitors, substitutes, new entrants,
suppliers, and buyers) is a useful model to
plan a defense against such competition.
COMPETITIVE FACTORS
cellular agriculture, virtual reality, autonomous
driving, and spaces as participants are some
of the top tech trends of 2017.
• Smart building materials, synthetic food,
• Technology continues to be a critical factor in
shaping the competitiveness and productivity
of organizations.
• A new technology may render existing
products obsolete, pressuring product
replacement/innovation.
• Basic and applied research continues to
expand the frontiers of knowledge and
innovation.
• Technology factors are the fastest changing
factors with, perhaps, the most significant
impact on business.
TECHNOLOGY FACTORS
Eighty-two percent of Canadians are urban dwellers. With over 200 different languages spoken, Canada is
becoming increasingly multicultural, which provides opportunities to target products based on culturally
diverse needs.
•
•
•
•
REGULATORY FACTORS
• Consumer’s income—The median Canadian income in
2014 was $78,870. Along with willingness and ability to
buy, income is a key purchase determinant.
• Purchasing Power (income comparative to the relative
cost of a set standard of goods/services) —Purchasing
power will either increase or decrease discretionary
income. This will impact the purchases of nonessential
items.
• Inflation—Inflation will compel consumers to make more
economical purchases to maintain their standard of living.
They will react more to price-based incentives.
• Recession—When economic activities are
characterized by negative growth (e.g., Alberta in
2014–16), it puts pressure on consumer spending
and drives price–value relationships when making
purchases.
ECONOMIC FACTORS
• Core values such as self-sufficiency, upward mobility,
work ethic, and fairness influence attitudes, lifestyles,
and buying habits of Canadian consumers.
• Component lifestyles influence purchase choices to meet
the diverse needs of Canadian consumers rather than
confirming to traditional stereotypes.
• The unprecedented level of diversity, time and resource
constraints, and recent developments in technology has
influenced the choices of media and products used by the
Canadian families.
SOCIAL FACTORS
Chapter 2 —The Marketing Environment, Social Responsibility, and Ethics
Copyright © 2019 Nelson Education Ltd.


Pyramid of Social Responsibility
Portrays economic performance as the
foundation for the legal, ethical, and
philanthropic responsibilities of an
organization. It reminds us that a
business must be profitable to
accommodate the needs of customers,
owners, society, and the environment.
Economic
Responsibilities
Legal
Responsibilities
In Canada, CSR
has become
increasingly
professionalized
and integrated
across all levels.
CSR is part of
the long-term
strategy that is
coordinated
through the
organization.
Growth of Social
Responsibility

The development
and marketing of
products
designed to
minimize
negative effects
on the physical
environment. It
can also help the
bottom line of the
organization.
Green Marketing
Corporate Social Responsibility (CSR)
 Socially responsible
organizations tend
to pursue the Triple
Bottom Line:
profitability, care for
the planet, and care
for people.
 Corporate social
responsibility is a
business’s concern
for social and
environmental
welfare.
Ethical
Responsibilities
Philanthropic
Responsibilities
Morals are the rules
people develop as a
result of cultural
values and norms.
Ethical Decision Making




Help employees identify the
business practices their firm
recognizes as being
acceptable.
Can be an effective internal
control on behaviour.
A written code helps
employees avoid confusion
when determining whether
their decisions are ethical.
The process of formulating the
code will facilitate a discussion
among employees about what
is right and wrong, which
ultimately leads to better
decisions.
Ethical Guidelines
Ethical values are situation specific and time oriented.
Ethical decision making could be approached in three ways:
o To examine the consequences of decisions
o Relying on rules and regulations to guide decision making
o Emphasis on the development of moral character within
individuals
Factors that influence ethical
decision making:

Extent of ethical problems
within the organization

Top management actions
on ethics

Potential magnitude of the
consequences of unethical
behaviour

Social consensus of
unethical behaviour

Probability of harmful
outcomes

Length of time between the
decision and the onset of
consequences

Number of people to be
affected


Morality and Business Ethics
Ethics refers to the moral principles or values
that generally govern the conducts of an
individual or a group. It is also viewed as a
standard of behaviour by which conduct is
judged.
Ethical Behaviour in Business
Copyright © 2019 Nelson Education Ltd