Chapter 16 Marketing

Deficient products

such as bad-tasting and ineffective medicine, have neither immediate appeal nor long-run benefits

Some marketers are urging "______ _____" to combat materialism

"conscious consumption"

How can acquisitions be good for society?

(1) The acquiring company may gain economies of scale that lead to lower costs and lower prices. (2) A well-managed company may take over a poorly managed company and improve its efficiency

How do marketing practices impact other companies and reduce competition?

(1) acquisitions of competitors (2) marketing practices that create barriers to entry (3) unfair competitive marketing practices

What is the process of greening activities for a company looking to the future.

(1) first, internally, companies can plan for new clean technology. (2) finally, companies can develop a sustainability vision.

What are the impacts of marketing as detailed by its common social criticisms?

(1) impact on individual consumers (2) impact on society as a whole (3) impact on other businesses

What arguments do marketers use to answer the charges of commercial noise?

(1) they hope their ads primarily reach the target audience (2) many television, radio, online, and social media sites are free to users. Thus, to hold consumer attention, advertisers are making their ads more entertaining and informative

What are the ways in which a balance can be restored between private and public goods?

(1) to make producers bear the full social costs of their operations (2) to make consumers pay for the social costs.

____________________________ that will help them figure out the moral importance of each situation and decide how far they can go in good conscience

*Managers need a set of principles* (1) One philosophy is that the free market and the legal system should decide such issues. Under this principle, companies and their managers are not responsible for making moral judgments. Companies can, in good conscience, do whatever the market and legal systems allow. (2) A second philosophy puts responsibility not on the system but in the hands of individual companies and managers. This more enlightened philosophy suggests that a company should have a social conscience.

What are the norms that the american marketing association has set up for companies to follow?

- The first norm, which is to do no harm, - The second norm, which is to foster trust in the marketing system. -The third norm is to embrace ethical values.

What additional rights should be added to the list of consumer rights?

-the right to be well informed about important aspects of the product; - the right to be protected against questionable products and marketing practices; - the right to influence products and marketing practices in ways that will improve "quality of life"; and - the right to consume now in a way that will preserve the world for future generations of consumers.

Societal Marketing

A company makes marketing decisions by considering consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests

Environmental sustainability

A management approach that involves developing strategies that both sustain the environment and produce profits for the company.

How can products be classified within marketing concepts?

According to their degree of immediate consumer satisfaction and long-run consumer benefit.

The ______________, an international association of marketing managers and scholars, developed a code of ethics that calls on marketers to adopt the following ethical norms.

American Marketing Association

Seller's right - to introduce any product and style with proper warnings and controls, if necessary

Buyer's right - to buy a product that is offered for sale

Seller's right - to spend any amount to promote the product if competing fairly

Buyer's rights - to expect the product to perform as claimed

Seller's right - to use any product message that is not misleading or dishonest

Buyer's rights -?

Seller's right - to use buying incentive programs that are not unfair or misleading

Buyer's rights -?

Seller's right - to charge any price for the product without any discrimination

Buyers right - to expect the product to be safe

What is an example of a marketing practice that bars new companies from entering an industry?

Companies can use heavy promotions, including price cutting, to keep out or drive out competitors.

Challenge with deficient products?

Companies don't want them at all!

Redlining

Drawing a red line around disadvantaged neighborhoods and avoiding placing stores there.

Desirable products

Give both high immediate satisfaction and high long-run benefits, such as a tasty and nutritious breakfast food.

Figure 16.4 Deficient Products

Immediate satisfaction low Long-run consumer benefits low

Design for environment (DFE)

Involves thinking ahead to design products that are easier to recover, reuse, recycle, or safely return to nature after usage, thus becoming part of the ecological cycle (also cradle-to-cradle practices)

What is *environmentalism* concerned with?

It is concerned with damage to the ecosystem caused by global warming, resource depletion, toxic and solid wastes, litter, the availability of fresh water, and other problems. ++Other issues include the loss of recreational areas and the increase in health problems caused by bad air, polluted water, and chemically treated food.

Fig 16.1 Sustainable Marketing Concept Matrix

Needs of Consumers Future Needs of Business Future

Fig 16.1 Societal Marketing Concept Matrix

Needs of Consumers Future Needs of Business Now

Fig 16.1 Strategic Planning Concept Matrix

Needs of Consumers Now Needs of Business Future

Fig 16.1 Marketing Concept Matrix

Needs of Consumers Now Needs of Business Now

Marketing Concept

Recognizes that organizations thrive from day to day by determining the current needs and wants of target customers and fulfilling those needs and wants more effectively and efficiently than competitors do. It focuses on meeting the company's short-term sales, growth, and profit needs by engaging customers and giving customers what they want now.

Innovative marketing

Requires that the company continuously seek real product and marketing improvements

High-pressure selling

Salespeople persuade people to buy goods they had no thought of buying. Too often, products and services are not made well or do not perform well. Also many products deliver little benefit, or may even be harmful.

Planned obsolescence

Some companies practice this, causing their products to become obsolete before they need replacement.

Perceived obsolescence

Some companies practice this, that is, continually changing consumer concepts to encourage more and earlier buying

Customer value marketing

The company should put most of its resources into customer value-building marketing investments. By creating value for consumers, the company can capture value from consumers in return.

What are environmentalists primarily concerned with?

They are concerned with marketing's effects on the environment and the environmental costs of serving consumer needs and wants. They want people and organizations to operate with more care for the environment.

Companies are also developing programs to teach managers about important ethical issues and help them find the proper responses. What have they done?

They hold ethics workshops and seminars and create ethics committees.

What is the challenge posed by pleasing products?

They sell very well but may end up hurting the consumer. The product opportunity, therefore, is to add long-run benefits without reducing the product's pleasing qualities

what is the third norm, to embrace ethical values?

This means building relationships and enhancing consumer confidence in the integrity of marketing by affirming core values such as, honesty, responsibility, fairness, respect, transparency, and citizenship.

What is the challenge posed by salutary products?

To add some pleasing qualities to them so that they will become more desirable in consumers' minds.

Figure 16.2 Product Stewardship

Today: Greening External

Figure 16.2 Pollution Prevention

Today: Greening Internal

Figure 16.2 Sustainability Vision

Tomorrow: Beyond Greening External

Figure 16.2 New Clean Technology

Tomorrow: Beyond Greening Internal

Critics charge the marketing system with creating __________ ____________, which mainly focuses on promotional side of marketing.

cultural promotion

Materialism

a tendency to consider material possessions and physical comfort as more important than spiritual values.

Acquisitions have caused concern that vigorous young competitors will be ________, thereby reducing competition

absorbed

Consumerism

an organized movement of citizens and government agencies designed to improve the rights and power of buyers in relation to sellers

Environmentalism

an organized movement of concerned citizens, businesses, and government agencies designed to protect and improve people's current and future living environment.

Sustainable companies

are those that create value for customers through socially, environmentally, and ethically responsible actions.

At ______ _________ ______, companies can practice product stewardship.

at the next level

Corporate marketing ethics policies

broad guidelines that everyone in the organization must follow

Sustainable Marketing Concept

calls for socially and environmentally responsible actions that meet both the immediate and future needs of customers and the company.

Sustainable marketing provides the context in which

companies can build profitable customer relationships by creating value for customers in order to capture value from customers in return, now and in the future.

Strategic planning concept

considers future company needs

Societal marketing concept

considers the future welfare of consumers

What internal green marketing programs have been created by companies emphasizing pollution prevention?

designing and developing ecologically safer products, recyclable and biodegradable packaging, better pollution controls, and more energy-efficient operations.

What policies should corporate marketing ethics cover?

distributor relations, advertising standards, customer service, pricing, product development, and general ethic standards

The sustainable marketing goals of long-term consumer and business welfare can be achieved only through

ethical marketing conduct

Companies and managers should apply high standards of _______ and _______ when making corporate decisions, regardless of what the system allows

ethics ; morality

Firms are harmed and competition is reduced when companies ________ _________________ rather than by developing their own new products.

expand by acquiring competitors

Critics do not view the interest in material things as a natural state of mind but rather as a matter of ___________ ______________ created by marketing.

false wants

Concerns related to the environment have resulted in what?

federal and state laws and regulations governing industrial commercial practices impacting the environment.

Pleasing products

give high immediate satisfaction but may hurt consumers in the long run. Examples include cigarettes and junk food

Many observers predict a new age of more sensible consumption. As a a result, instead of encouraging today's more sensible consumers to overspend their means, most marketers are working to help them find __________________________.

greater value with less

Salutary products

have low immediate appeal but may benefit consumers in the long run. Bicycle helmets or some insurance products are examples.

Critics point to three factors behind high consumer prices, what are they?

high costs of distribution, high advertising, and promotion costs, and excessive markups

Figure 16.4 Desirable products

immediate satisfaction high long-run consumer benefit high

Figure 16.4 Pleasing products

immediate satisfaction high long-run consumer benefit low

Figure 16.4 Salutary Products matrix

immediate satisfaction low Long-run consumer benefit high

Deceptive pricing

includes practices such as falsely advertising prices from a phony high retail

Deceptive promotion

includes practices such as misrepresenting the product's features.

Critics feel that the buyer has too little ________________ to make wise decisions when facing sophisticated sellers.

information, education, and protection

As with environmentalism, the issue of ethics presents special challenges for _________________. Business standards and practices vary a great deal from one country to the next.

international marketers

Deceptive packaging

involves exaggerating package contains in misleading terms.

Product stewardship

involves minimizing not only pollution from production and product design but also all environmental impacts throughout the full product life cycle, while at the same time reducing costs.

Under the sustainable marketing concept, a company's marketing should support the best _________-_______ performance of the marketing system

long-run

What is the first norm, to do no harm?

means consciously avoiding harmful actions or omissions by embodying high ethical standards and adhering to all applicable laws and regulations in the choices we make.

Pollution prevention

means eliminating or minimizing waste before it is creating

what is the second norm, to foster trust in the marketing system?

means striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process, and avoiding deception in product design, pricing, communication, and delivery or distribution.

Sense-of-mission marketing

means that the company should define its mission in broad social terms rather than narrow product terms. Brands linked with broader missions can serve the best long-run interests of both the brand and consumers

Consumer-oriented marketing

means that the company should view and organize its marketing activities from the consumer's point of view. It should work hard to sense, serve, and satisfy the needs of a defined group of customers, both now and in the future.

At the _______ _____ _______, a company can practice pollution prevention.

most basic level

Dealing with issues of ethics and social responsibility, in an __________________, helps to build and maintain strong customer relationships based on honesty and trust.

open and forthright way

Many critics charge that the American marketing system causes _______ _____ _______ ______ than they would be under more sensible systems.

prices to be higher

What is an example of an unfair competitive marketing practice that hurts or destroys other firms?

pricing below costs

Businesses has been accused of overselling _______ __________ at the expense of public goods.

private goods

As private goods increase, they require more _____________ ___________ that are usually not forthcoming.

public services.

Sustainable marketing goes beyond caring for the needs and wants of today's customers. It means...

pursuing the mission of a triple bottom line which is people, planet, and profits.

In recent years, most companies have accepted the:

responsibility for doing no harm to the environment.

Comparing traditional seller and buyer rights leads many to believe that the balance of power lies on the

seller's side

Sustainability vision

serves as a guide to the future. It shows how the company's products and services, processes, and policies must evolve.

Who can consumers contact if they feel they got a bad deal?

the company or the media; contacting federal (FTC), state (consumer affairs), or local agencies, and going to small-claims courts.

Marketers, they claim, stimulate people's desires for goods and create materialistic models of the good life. In this view, marketing's purpose is to promote consumption, and ____

the inevitable outcome of successful marketing is unsustainable overconsumption

What should guide a company's sustainable marketing concept (five sustainable marketing principles)?

(1) consumer-oriented marketing (2) customer value marketing (3) innovative marketing (4) sense-of-mission marketing (5) societal marketing