Marketing chapter 3

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

Discuss forms of competition that affect marketing

Pure competition monopolistic competition oligopoly monopoly While large companies are often used as examples of marketplace competitors, there are 28 million small businesses in the United States that have a significant impact on the economy.

Explain how regulatory forces ensure competition and protect consumers and producers

Regulation exists to protect companies and consumers. Legislation that ensures a competitive marketplace includes the Sherman Antitrust 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.

Regulation

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

The _______ Act forbids actual monopolies, whereas the ______ Act forbids actions that are likely to lessen competition.

Sherman Anti-trust; Clayton

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.

Discuss 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. Electronic commerce is transforming how companies do business.

Competition

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

How does the Better Business Bureau encourage companies to follow its standards for commerce?

The better business bureau (BBB) uses moral suasion to comply with its standards

Social forces

The demographic characteristics of the population and its culture.

Generation X

The generation of the 50 million babies born between 1965 and 1976.

Social responsibility

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

Ethics

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

Environmental scanning

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

What rights are included in the consumer bill of right

The rights of safety, to be informed, to choose, and to be heard.

Culture

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

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, and Generation Y), and a description of racial and ethnic diversity. Culture incorporates the set of values, ideas, and attitudes that is learned and shared among the members of a group.

The Federal Trade Commissions (FTC) monitors________.

The unfair business practices

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.

Code of Ethiccs

A formal statement of ethical principles and rules of conduct.

Consumerism

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

Consumer bill of rights

A law that codeified the ethics of exchange between buyers and sellers, including the rights to safety, to be informed, to choose and to be heard.

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 cost and benefits of the consequences of an ethical behavior.

Self-regulation

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

Marketspace

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

Describe three generational cohorts

Answer: (1) Baby boomers are the generation of 76 million among the U.S. population born between 1946 and 1964. These Americans are growing older and will all be 65 or older by 2030. (2) Generation X are those among the 15 percent of the U.S. population born between 1965 and 1976. These well-educated Americans, also known as the baby bust cohort because of declining birth rates, are supportive of racial and ethic diversity. (3) Generation Y, or millennials, are the 72 million Americans among the U.S. population born between 1977 and 1994. The rising birth rate of this "baby boomlet" cohort is the result of baby boomers having children.

How does technology impact customer value?

Answer: (1) Consumers can now assess value on the basis of dimensions such as quality, service, and relationships due to the decline in the cost of technology. (2) Technology provides value through the development of new products.

Economic espionage includes what kinds of activities?

Answer: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company's competitors. This practice includes trespassing, theft, fraud, misrepresentation, wiretapping, searching competitors' trash, and violations of written and implicit employment agreements with noncompete clauses.

How are important values such as sustainability reflected in the market place today

Answer: Many Americans desire and practice sustainability to preserve the environment. Specifically, these consumers buy products such as hybrid gas-electric cars. Consumers also prefer brands that have a strong link to social action (like Ben & Jerry's—see Chapter 2). Companies are responding to this consumer trend by producing products that use renewable energy and less packaging.

What is meant by moral idealism

Answer: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Why are many companies developing multicultural marketing programs?

Answer: Multicultural marketing programs consist of combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races and ethnic groups. The reason for developing these programs is that the racial and ethnic diversity of the U.S. is changing rapidly due to the increases in the African American, Asian, and Hispanic populations, which increases their economic impact.

What is meant by social responsibility

Answer: Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. It comprises three concepts: (1) profit responsibility—maximizing profits for the organization's shareholders; (2) stakeholder responsibility—the obligations an organization has to those who can affect the achievement of its objectives; and (3) societal responsibility—the obligations an organization has to preserve the ecological environment and to the general public.

What is sustainable development

Answer: Sustainable development involves conducting business in such a way that protects the natural environment while making economic progress. Green marketing is an ecological example of such an initiative.

Multicultural marketing

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

Demographics

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

Explain the purpose of environmental scanning

Environmental scanning is the process of continually acquiring information on events occurring outside the organization 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 changing use of media, the increasing impact of new technologies, and many others.

Identify factors that influence ethical and unethical marketing decisions

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

Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called

Green marketing

Generation Y

Includes the 72 million americans born between 1977 and 1994. These were the children born from the baby boomer generation.

Baby boomers

Includes the 76 million people born between 1946 and 1964

Technology

Inventions or innovations from applied science or information research.

In pure competition there are a number of sellers.

Large

Green Marketing

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