3

Ethics and Social Responsibility

Professor Close

Corporate Social Responsibility (1)

CSR = businesses concern for societal
welfare
Ethics = moral values guiding a leader or
organization
Morals = rules developed by cultural
values/norms
Can you think of any companies that
practice CSR?

Corporate Social Responsibility (2)

Happy people = good business
If you have to ask is this ethical?... it
likely is NOT cool
Need 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 support
Entrepreneurs challenge
Example: organization charts

Profit (#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 key
Question to consider: do you think WalMart 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 areas
Examine functional areas
Financial: Wal-Mart (purchasing)
Production:
Larger capacity (cost/unit, economy of scale)
Flexibility (Sara Lee and what else?)
Often opposed

Marketing:
Brand strength
Channel relationships (car dealers, franchisees, and what
else?)

Marketing Environment (5)

Preferable Combination
Example: Wal-Mart - financial, distribution,
and relationships
What other example can you think of that has
a strong combination?

Finding Opportunities (1)

Types of opportunities:
Market penetration
Current products and markets
Examples include
Increase rate of use (shampoo, Coke, and what else??)
Longer duration (airlines and what else??)

Advantage of market penetration is that it is the

easiest method
Disadvantage is the threat of saturation

Finding Opportunities (2)

Types of opportunities:
Market development
Current products, new markets
Example: international expansions
What successful or unsuccessful international
expansions can you think of?

Advantages include high potential

Disadvantages include applicability (KFC in Japan)

Lipton is AsiaThink it will work?

Finding Opportunities (3)

Types of opportunities:
Product development

Current markets, new products

Examples: autos, fashion, and what else??
Advantages include knowing the customer already
Disadvantages include cannibalization (Gillette)

Finding Opportunities (4)

Types of opportunities:
Diversification

New market and product

Examples: McDonalds and what else??
Advantage includes high potential
Disadvantage include high risk (ITT Sheraton)

Social Factors
American values (upward mobility, work
ethic, self-sufficiency, conformity)
Culture: manner in which people live
Very broad

Womens role (U.S. vs Japan)

Fitness
Debt
Time-poor society

Economic Factors
Economy: 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 Factors
Technological: application of knowledge to
perform tasks more efficiently/effectively
Effective: accomplishing tasks
Efficient: accomplishing tasks with minimum use of
resources

Base of economic environment (research)

Technology transfer is rapid (Pentium chips
and what else?)
RSS and blogging

Ethics: consumer research (hits on web sites,

selling your info, privacy??)

Technology Changing Lifestyles

Political Factors
Political
International
Nationalism: emphasis on our country influences
trade (buy American)
Trade groups: ease trade among members
EU lowers trade barriers among European nations
(looking East)
NAFTA Canada, U.S., and Mexico
What do you see as the advantages and disadvantages
of each?

Consumerism
Champions individual vs company
Ralph Nader unsafe @ any speed

Legal Factors (1)

Legal (close with political)
Philosophy:
Competition is encouraged
Federal law conveys intent, but not detailed
interpretation

Sellers must:
Tell the truth
Meet contracts

Legal Factors (2)

Legal (continued)
Regulations:

Food and drugs must be safe & sanitary

Magnuson-Moss Act: warranties
Robinson-Patman Act: price discrimination
Consumer Product Safety Commission (sets
standards)
Protects from unsafe products (bicycle unsafe)
Stricter on children

State/local laws vary (California)

Let the buyer beware (pro-consumer)

Should this be an illegal ad?

Competitive Factors
Competitors
Fight for market share or profits
Tend to become similar (sodas, beer, any
others?)
Competitive barriers
Position difficult to copy (any area of firm)
Marketing helps maintain distinction (image, etc)
Can usually avoid head on competition

We love competition, why?

Who Killed My Little Pony?

Summary
Marketing environment and strategy
Six environments
Social
Economic
Technology
Political
Legal
Competitive
Note: we will over demographic factors in a
following unit.

Any questions?