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1、Decision Making in the New Era of MarketingChapter 3 Lecture SlidesSolomon, Stuart, Carson, & SmithYour name hereCourse title/numberDateChapter Learning ObjectivesWhen you have completed your study of this chapter, you should be able to:Explain why organizations have adopted a New Era marketing focu
2、s on ethics and social responsibilityDescribe the New Era emphasis on qualityDiscuss some of the important aspects of an organizations internal environment.Explain why marketers scan an organizations external business environment.3-2Introduction to the TopicSocial profit: the benefit an organization
3、 and society receive from the organizations ethical practices, community service, efforts to promote cultural diversity, and concern for the natural environment.Many organizations have come to recognize that the value of doing the right thing goes beyond the short term public relations benefits that
4、 may be gained.But what does “doing the right thing mean in an organizational context?Figure 3.13-3Ethical Behaviour in the MarketplaceBusiness ethics: rules of conduct for an organization. These are the basic values that guide a firms behaviour.The difference between what is right and wrong is a ve
5、ry subjective thing, which is why there is so much variation in this area.Code of ethics: written standards of behavior to which everyone in the organization must subscribe.“The fish stinks from the head would suggest that employees take their direction from senior managers when considering ethical
6、issues.Shareholders rights, and the behaviour of senior management has come under intense media scrutiny in early 2002, for good reason.3-4AMA Code of EthicsThe American Marketing Association (AMA) publishes a code of ethics for marketers on its web site, which consists of four different categories
7、of responsibilities. To accept responsibility for the consequences of their activitiesTo not knowingly do harmTo adhere to all applicable laws and regulationsBe honest and fair in all dealings with consumers, clients, employees, suppliers, distributors, and the public.Avoid participation in conflict
8、 of interest situations without prior notice to all parties involved.3-5Consumerism: Fighting BackConsumerism: a social movement that attempts to protect consumers from harmful business practices.The Consumers Association of Canada (CAC) was created to inform, educate, and advocate on behalf of cons
9、umers.Their seven (plus one) consumer rights are:The right to safetyThe right to be informedThe right to be heardThe right to redressThe right to chooseThe right to a healthy environmentThe right to a consumer educationThe right to privacy3-6Ethics in the Marketing MixProduct safety is an important
10、issue to protect consumers from harm or loss due to defective or dangerous products. Safety standards for products are established and monitored by independent organizations such as the Canadian Standards Association (CSA). Price fixing: an illegal business practice in which firms decide in advance
11、on a common price for their product.Price discrimination: charging lower prices to larger customers. This is legal when it can be shown that cost savings are available to the manufacturer or it is necessary to meet competitors pricing. Price gouging: charging excessive prices in response to a high d
12、emand/low supply situation.3-7Ethics in the Marketing Mix (continued)Product promotion can be a problem in terms of misleading or false advertising. The advertising industry in Canada is self-regulating through the Advertising Standards Canada (ASC).Advertising to children and gender stereotyping ar
13、e two areas of concern Slotting allowance: a fee paid by a manufacturer to a retailer in exchange for agreeing to place products on the retailers shelves.This is standard practice in the grocery trade, which has been aided by the widespread use of private label brands.The danger is that consumers ma
14、y not have access to the products of smaller manufacturers who cannot afford to pay these fees.3-8A Focus on Social ResponsibilitySocial responsibility: a management practice in which organizations seek to engage in activities that have a positive effect on society and promote the public good.Enviro
15、nmental stewardship: a position taken by an organization to protect or enhance the natural environment as it conducts its business activities.Green marketing: a marketing strategy that supports environmental stewardship by creating an environmentally founded differential benefit in the minds of cons
16、umers.This effort has been hampered by a lack of consensus on what it means to be “green3-9Serving Society and CommunityCause marketing: a marketing strategy in which an organization serves its community by promoting and supporting a worthy cause or by allying itself with a not-for-profit organizati
17、on to tackle a social problem.Consumers will respond to this if they believe the organization to be sincere. Cultural diversity: a management practice that actively seeks to include people of different sexes, races, ethnic groups, and religions in organizations employees, customers, suppliers, and d
18、istribution channel partners. 3-10A Focus on QualityQuality: The level of performance, reliability, features, safety, cost, or other product characteristics that consumers expect to satisfy their needs and wants.The National Quality Institute surveys customers and companies on quality issues. Total
19、Quality Management (TQM): a management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement.ISO 9000: criteria developed by the International Standards Organization (ISO) to regulate product quality internationally.The IS
20、O 9000 program is administered in Canada by the Standards Council of Canada.3-11The Internal Business EnvironmentThe internal environment of the organization includes its resources and competencies.Corporate culture: the set of values, norms, and beliefs that are held by an organizations managers an
21、d that influence that behavior of everyone in the organization.Organizational culture will vary in its attitude towards risk taking, as well as individuality and creativity.Organizations will also vary in their attitude towards the pursuit of profits versus satisfying the needs of stakeholders, such
22、 as employees, customers, suppliers, and the public. 3-12The Internal Business EnvironmentPublics: groups of people- including suppliers, channel intermediaries, customers, employees, shareholders, financial institutions, government, the media, and public interest groups- that have an interest in an
23、 organization.Competition within an industry can become destructive as intensity builds, as seen in the battle for the long distance market since de-regulation of this industry.In the long run, nobody wins in a price war. Who wins in the short run?3-13The External Business EnvironmentThe economic en
24、vironment has a big influence on the success of an organizations marketing strategy.Business cycle: the overall patterns of change in the economy-including periods of prosperity, recession, depression, and recovery- that affect consumer and business purchasing power.Consumer confidence: an indicator
25、 of future spending patterns, measured by the extent to which people are optimistic or pessimistic about the state of the economy.The concept of derived demand tells us that all economic activity is derived from sales at retail, which is why we keep track of consumer spending levels.3-14The Competit
26、ive EnvironmentCompetitive intelligence (CI): the process of gathering and analyzing public information about rival firms. While still a relatively new concept to most firms, CI can assist decision makers in developing superior marketing strategies. Competition within the microenvironment includes a
27、ll product alternatives that a consumer may choose to spend their discretionary income on.Discretionary income: the portion of income people have left over after paying for such necessities as housing, utilities, food, and clothing.We can differentiate between types of competition.3-15Competition in
28、 the MicroEnvironmentProduct competition: very different products competing to satisfy the same consumer needs and wants.Vacation resorts compete against cruise lines, bus tours, adventure tours, and RV camping to satisfy the need for relaxation. Brand competition: similar products or services that
29、compete based on the brands reputation or perceived benefits.Brand names are used by consumers as an indicator of quality or positioning.Successful brand names can use this equity to introduce new products that have a higher rate of acceptance due to their association with the brand.3-16Competition
30、in the Macroenvironment Monopoly: a market situation in which one firm, the only supplier of a particular product, is able to control the price, quality and supply of that product. Oligopoly: a market structure in a which relatively small number of sellers, each holding a substantial share or the ma
31、rket, compete in a market with many buyers.Monopolistic competition: a market structure in which may firms, each having slightly different products, offer consumer unique benefits.Perfect competition: a market structure in which many small sellers, all of which offer similar products, are unable to
32、have impact on the quality, price, or supply of a product.3-17 Rapidly changing technology can create both opportunities and threats to organizations attempting to develop competitive marketing strategies. Organizations may use their investment in technology as the basis of their competitive advanta
33、ge, but this can be an ever-moving target.Proprietary technology is a valuable asset for an organization and needs to be protected.Patent: legal document granting an individual or firm exclusive right to produce and sell a particular invention.The Technological Environment3-18 The legal environment
34、includes all laws-municipal, provincial, federal, and global-that affect businesses. Businesses ignore this area at their peril as some of their actions can pose serious risks of liability.The main federal law governing business activity is the Competition Act, which is intended to promote competition and efficiency in the marketplace.Other laws
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