MKT 291 Ch. 3 Understanding the Environment, Ethical Behavior and Social Responsibility

Self-regulation is ______.

An alternative to government control in which industry attempts to police itself

self-regulation

An alternative to government control whereby an industry attempts to police itself.

caveat emptor

The legal concept of "let the buyer beware" that was pervasive in the American business culture prior to the 1960s.

cause marketing

Occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.

economy

Pertains to the income, expenditures, and resources that affect the cost of running a business and household.

disposable income

The money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation.

discretionary income

The money that remains after paying for taxes and necessities.

social responsibility

The idea that organizations are part of a larger society and are accountable to that society for their actions.

Ethics refers to ______.

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

ethics

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

Internet of Things (IoT)

The network of products embedded with connectivity-enabled electronics.

Generation Z

The post-millennial generation, which includes consumers born between 1997 and 2010.

environmental scanning

The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.

triple bottom line

The recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth.

culture

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

Corporate culture can be defined as ______.

The set of values, ideas, and attitudes that are learned and shared among the members of an organization

Describe social forces such as demographics and culture.

The social forces of the environment include the demographic characteristics and the culture of the population. Three key demographic characteristics include a population profile, a description of generational cohorts (baby boomers, Generation X, Generation Y, and Generation Z), and the racial and ethnic diversity of the population. Culture incorporates the set of values, ideas, and attitudes that is learned and shared among the members of a group. Notable cultural changes include the trend toward fewer differences in male and female roles and attitudes and the growing importance of values such as sustainability on consumer preferences.

gross income

The total amount of money made in one year by a person, household, or family unit. Also known as money income at the Census Bureau.

Discuss the forms of competition that exist in a market.

There are four forms of competition: pure competition, monopolistic competition, oligopoly, and monopoly. The key components of competition include the likelihood of new competitors, the power of buyers and suppliers, and the presence of competitors and possible substitutes. While large companies are often used as examples of marketplace competitors, there are 30.2 million small businesses in the United States, which have a significant impact on the economy.

Discuss how economic forces affect marketing.

Two aspects of economic forces include macroeconomic conditions related to the marketplace and microeconomic factors such as consumer income. Indicators of marketplace conditions include GDP, unemployment, and price changes (inflation or deflation). Consumer income has gross, disposable, and discretionary components. The state of the economy and changes in income can influence consumers' ability to buy products and services.

Which two of the following are personal moral philosophies that have the most direct bearing on marketing practice?

Utilitarianism Moral idealism

Pure Monopoly

When only one firm sells the product - common for producers of products and services considered essential to a community: water, electricity, and cable service.

Three concepts of social responsibility

profit responsibility societal responsibility stakeholder responsibility

To get a comprehensive look at your competition, you should consider firms that

provide a product that satisfies the same specific need as yours does.

Which two laws forbid monopolies or other actions that cause restraint in trade?

- Sherman Anti-Trust Act - Clayton Act

Which are rights codified by the 1962 Consumer Bill of Rights?

- The right to safety. - The right to be heard.

code of ethics

A formal statement of ethical principles and rules of conduct.

consumerism

A grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.

moral idealism

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

utilitarianism

A personal moral philosophy that focuses on "the greatest good for the greatest number" by assessing the costs and benefits of the consequences of ethical behavior.

marketspace

An information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digital offerings.

Consumer Bill of Rights

An outline presented by President John F. Kennedy in 1962 that codified the ethics of exchange between buyers and sellers, including the rights to safety, to be informed, to choose, and to be heard.

multicultural marketing

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

Oligopoly

Common industry structure, occurs when a few companies control the majority of industry sales. - Cell phone services (Verizon, AT&T) - Entertainment (Disney, Viacom, Time Warner) - Defense Contractor (Boeing, Lockheed Martin)

sustainable development

Conducting business in a way that protects the natural environment while making economic progress.

The right to safe products and to be informed by businesses that sell them are part of the ____ Bill of Rights enacted in 1962 by President John F. Kennedy.

Consumer

A company's ______ can be described as the set of values, ideas, and attributes that is learned and shared among its members.

Culture

demographics

Describing a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.

whistle-blowers

Employees who report unethical or illegal actions of their employers.

Explain the purpose of environmental scanning.

Environmental scanning is the process of continually acquiring information on events occurring outside the organization to allow marketers to identify and interpret potential trends. Environmental trends typically arise from five sources: social, economic, technological, competitive, and regulatory forces. A firm conducting an environmental scan of the marketplace might uncover key trends such as the growing interest in health and wellness, the increasing popularity of the concept of a circular economy, and the momentum of new technologies such as 5G networks, AI, the IoT, and robotics.

The moral values that govern the actions and decisions of an individual or group and serve as guidelines on how to act rightly and justly when faced with a moral dilemma are referred to as ______.

Ethics

Identify factors that influence ethical and unethical marketing decisions.

Four factors (presented in Figure 3-2) influence ethical marketing behavior: (1) societal culture and norms, (2) business culture and industry practices, (3) corporate culture and expectations, and (4) personal moral philosophy and ethical behavior.

Generation X

Includes the 55 million people born between 1965 and 1980. Also called the baby bust.

Generation Y

Includes the 62 million Americans born between 1981 and 1996. Also called the echo-boom.

baby boomers

Includes the generation of 76 million children born between 1946 and 1964.

technology

Inventions or innovations from applied science or engineering research.

Monopolistic Competition

Many sellers compete with substitutable products within a price range - Example, if the price of coffee rises too much, consumers may switch to tea. - Coffee and Tea

Pure Competition

Many sellers each w a similar product - Wheat, Grains, and Rice

green marketing

Marketing efforts to produce, promote, and reclaim environmentally sensitive products.

What is considered a human rights abuse by an American company may be viewed as an acceptable business practice in China, which illustrates that ______.

Moral standards are relative to particular societies

Social responsibility includes the concepts of ___ responsibility, stakeholder responsibility, and societal responsibility.

Profit

Sustainable development involves conducting business in a way that _____.

Protects the natural environment while making economic progress

Explain how regulatory forces ensure competition and protect producers and consumers.

Regulation exists to protect companies and consumers. Legislation that ensures a competitive marketplace includes the Sherman Antitrust Act and the Clayton Act. Companies can protect their competitive position with patent and copyright laws. Consumers are protected by laws that address each of the four elements of the marketing mix. Laws such as the Lanham Act, which provides for the registration of trademarks, benefit both companies and consumers. Self-regulation through organizations such as the Better Business Bureau provides an alternative to federal and state regulation.

Which statement about regulation as an environmental force is true?

Regulation often places restrictions on the activities of businesses.

An environmental scan will include ____ forces impacting a business by way of state and federal laws that may restrict its activities.

Regulatory

Because culture is a socializing force that dictates what is morally right, moral standards are _____.

Relative to particular societies

regulation

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

The fact that organizations are part of a larger society and are accountable to that society for their actions is the essence of ______.

Social Responsibility

Describe the different concepts of social responsibility.

Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. There are three concepts of social responsibility: profit responsibility, stakeholder responsibility, and societal responsibility.

sustainable marketing

The effort to meet today's (global) economic, environmental, and social needs without compromising the opportunity for future generations to meet theirs.

____ development involves conducting business in a way that protects the natural environment while making economic progress.

Sustainable

________ development involves conducting business in a way that protects the natural environment while making economic progress.

Sustainable

Describe how technological changes can affect marketing.

Technological innovations can replace existing products and services. Changes in technology can also have an impact on customer value by reducing the cost of products, improving the quality of products, and providing new products that were not previously feasible. Artificial intelligence, the Internet of Things, wearable technology, and data analytics are transforming how companies do business.

The act that makes it unlawful to discriminate in prices charged to different purchasers of the same product is called ______.

The Robinson-Patman Act

electronic commerce

The activities that use electronic communication in the inventory, promotion, distribution, purchase, and exchange of products and services. Also called e-commerce. p. 81

competition

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

economic espionage

The clandestine collection of trade secrets or proprietary information about a company's competitors.

social forces

The demographic characteristics of the population and its culture.

The Sherman Antitrust Act and the Clayton Act were passed to protect ______.

competition

Two personal moral philosophies are ________, which considers certain rights and duties as universal, and ________, which focuses on the greatest good for the greatest number.

moral idealism; utilitarianism

Moral idealism and utilitarianism are two prominent personal ________ that are important in marketing.

moral philosophies

Profit responsibility, stakeholder responsibility, and societal responsibility are the three concepts of ______.

social responsibility