Chapter 3 - Understanding the Marketing Environment, Ethical Behavior, and Social Responsibility

Environmental scanning

Continuously acquiring information on events occurring outside the organization to identify and interpret possible trends.

Environmental trends (5 sources)

Social, Economic, Technological, Competitive, and Regulatory forces.

Social Forces

The demographic characteristics of the population and its culture.

Demographics

Population according to selected characteristics such as age, gender, ethnicity, and occupation (includes generation cohorts and diversity profiles).

Baby boomers

The wealthiest generation due to work force participation.

Gen X

A generation cohort that is self

Gen Y (Millennials)

A generation cohort with strong influence on communication, networking, and work

Gen Z

A generation cohort that embraces diversity, inclusivity, and natural looks.

Multicultural marketing programs

Combinations of the marketing mix that reflect unique attitudes, ancestry, communication preferences, and lifestyles of different races.

Culture

The set of values, ideas, and attitudes that are learned and shared among the members of a group.

Macroeconomic conditions

The monitoring of inflationary or recessionary economic states based on GDP, employment, and price changes.

Inflationary economy

An economic state where the cost to produce and buy products/services rises as prices increase; if prices rise faster than income, purchases decline.

Recessionary economy

An economic state where activity is slow or declining, unemployment rises, and consumers have less money to spend.

Gross income

The total amount of money made in one year by a person's household.

Disposable income

The money left after paying taxes to use for necessities.

Discretionary income

The money remaining after paying for taxes and necessities.

Technology

Inventions or innovations from applied science or engineering (e.g., AI, IoT, automation).

Marketspace

An information and communication

Electronic Commerce (E

commerce)

Intranet

A private internet

Extranet

Internet

Competition

Alternative firms that could provide a product to satisfy a specific market's needs.

Pure competition

A competitive environment with many sellers offering similar products.

Monopolistic competition

A competitive environment where many sellers compete with substitutable products within a price range.

Oligopoly

A competitive environment where a few companies control the majority of industry sales.

Pure monopoly

A competitive environment where only one firm sells the product.

Regulation

Restrictions state and federal laws place on business with regard to the conduct of its activities.

Sherman Antitrust Act

A law that forbids contracts, combinations, or conspiracies in restraint of trade.

Clayton Act

A law that forbids certain actions that are likely to lessen competition.

Patent Law

Gives inventors the right to exclude others from making, using, or selling their invention.

Copyright Law

Gives authors of artistic work the right to print and perform it.

Consumerism

A grassroots movement to increase the influence, power, and rights of consumers.

Self

regulation

Ethics

The moral principles and values that govern the actions and decisions of an individual or group.

Business Culture

Defines the rules of the game and boundaries between competitive and unethical behavior.

Consumer Bill of Rights

Codified ethics of exchange, establishing the right to safety, to be informed, to choose, and to be heard.

Economic espionage

The clandestine collection of trade secrets or proprietary information (illegal theft, fraud, etc.).

Corporate culture

A set of values, ideas, and attitudes learned and shared among members (includes Code of Ethics and Whistleblower protection).

Moral idealism

A moral philosophy that considers certain individual rights or duties as universal regardless of outcome.

Utilitarianism

A moral philosophy that focuses on the greatest good for the greatest number.

Social responsibility

The idea that organizations are accountable to a larger society.

Profit responsibility

The obligation to maximize profits for owners/stockholders.

Stakeholder responsibility

The obligations to those who can affect achievement of the organization's objectives.

Societal responsibility

The obligations to the ecological environment and general public (associated with the Triple Bottom Line).

Green marketing

Marketing efforts to produce/promote environmentally sensitive products.

Cause marketing

Charitable contributions tied directly to customer revenues from a specific product.

Sustainable development

Conducting business to protect the environment while making economic progress.