3Ethics and Social ResponsibilityProfessor Close

Corporate Social Responsibility (1)CSR = businesses concern for societal welfareEthics = moral values guiding a leader or organizationMorals = rules developed by cultural values/normsCan you think of any companies that practice CSR?

Corporate Social Responsibility (2)Happy people = good businessIf you have to ask is this ethical?... it likely is NOT coolNeed to rethink long terms solutions

Marketing Environment (1)Factors outside our control in the short run (CPA)Consider the strategy (where are the opportunities?)Broad objectives: beyond pleasing our customers

Marketing Environment (2)Broad objectives:Useful function (Wang computers)Need satisfaction (Hallmark)PR purposes (RJR vs. Alcohol)Organization to supportEntrepreneurs challengeExample: organization chartsProfit (#1, long run)Other financial subordinate (market share, Eastern)Time horizon: When will firm generate profit? (Amazon)Considers resources (how many years)

Marketing Environment (3)Compatibility is a keyQuestion to consider: do you think Wal-Mart can focus on both quality and price? What about their labor issues?

Simpsons on Wal-Mart

Marketing Environment (4)Resources: remember 2x2 matrix; how to find strong areasExamine functional areasFinancial: Wal-Mart (purchasing)Production:Larger capacity (cost/unit, economy of scale)Flexibility (Sara Lee and what else?)Often opposedMarketing:Brand strength Channel relationships (car dealers, franchisees, and what else?)

Marketing Environment (5)Preferable CombinationExample: Wal-Mart - financial, distribution, and relationshipsWhat other example can you think of that has a strong combination?

Finding Opportunities (1)Types of opportunities:Market penetrationCurrent products and marketsExamples includeIncrease rate of use (shampoo, Coke, and what else??)Longer duration (airlines and what else??)Advantage of market penetration is that it is the easiest methodDisadvantage is the threat of saturation

Finding Opportunities (2)Types of opportunities:Market developmentCurrent products, new marketsExample: international expansionsWhat successful or unsuccessful international expansions can you think of?Advantages include high potentialDisadvantages include applicability (KFC in Japan)

Lipton is AsiaThink it will work?

Finding Opportunities (3)Types of opportunities:Product developmentCurrent markets, new productsExamples: autos, fashion, and what else??Advantages include knowing the customer alreadyDisadvantages include cannibalization (Gillette)

Finding Opportunities (4)Types of opportunities:DiversificationNew market and productExamples: McDonalds and what else??Advantage includes high potentialDisadvantage include high risk (ITT Sheraton)

Social FactorsAmerican values (upward mobility, work ethic, self-sufficiency, conformity)Culture: manner in which people liveVery broadWomens role (U.S. vs Japan)FitnessDebtTime-poor society

Economic FactorsEconomy: a system of producing, distributing, & consuming wealth (what is our purchasing power?)Shifts (purchasing declines in recession)Examples:Interest rates influence buying (0% financing)Rising costs, inflation unavoidable Good life = debt?Why are we so in debt?

Technological FactorsTechnological: application of knowledge to perform tasks more efficiently/effectivelyEffective: accomplishing tasksEfficient: accomplishing tasks with minimum use of resourcesBase of economic environment (research)Technology transfer is rapid (Pentium chips and what else?)RSS and bloggingEthics: consumer research (hits on web sites, selling your info, privacy??)

Technology Changing Lifestyles

Political FactorsPoliticalInternationalNationalism: emphasis on our country influences trade (buy American)Trade groups: ease trade among membersEU lowers trade barriers among European nations (looking East)NAFTA Canada, U.S., and MexicoWhat do you see as the advantages and disadvantages of each?ConsumerismChampions individual vs companyRalph Nader unsafe @ any speed

Legal Factors (1)Legal (close with political)Philosophy:Competition is encouragedFederal law conveys intent, but not detailed interpretationSellers must:Tell the truthMeet contracts

Legal Factors (2)Legal (continued)Regulations:Food and drugs must be safe & sanitaryMagnuson-Moss Act: warrantiesRobinson-Patman Act: price discriminationConsumer Product Safety Commission (sets standards)Protects from unsafe products (bicycle unsafe)Stricter on childrenState/local laws vary (California)Let the buyer beware (pro-consumer)

Should this be an illegal ad?

Competitive FactorsCompetitorsFight for market share or profitsTend to become similar (sodas, beer, any others?)Competitive barriersPosition difficult to copy (any area of firm)Marketing helps maintain distinction (image, etc)Can usually avoid head on competitionWe love competition, why?

Who Killed My Little Pony?

SummaryMarketing environment and strategySix environmentsSocialEconomicTechnologyPoliticalLegalCompetitiveNote: we will over demographic factors in a following unit.Any questions?