FUNDAMENTAL OF MARKETING

(MKT243)
Chapter 2
Marketing Environment &
Marketing Ethics
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By,
Roslina Abd Latiff
COURSE OUTLINE:
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2.0 Marketing Environment And Marketing
Ethnics
2.1 Internal Marketing Environment
2.2 External Marketing Environment
2.3 Ethical Behavior In Business
2.4 Corporate Social Responsibilities
DEFINITION OF TERM:

Marketing Environment;
The actors & forces outside marketing that affect marketing
managements ability to build and maintain successful
relationship with target customers
Microenvironment
The actors close to the company that affect its ability to serve
its customers the company, suppliers, marketing
intermediaries, customers market, competitors, and public
Macro environment
The large societal force that affect the macroenvironment
demographic, economic, natural, technological, political, and
cultural forces.


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2.1THE COMPANYS MICRO ENVIRONMENT
(INTERNAL ENVIRONMENT)
MARKETING
The
Company
Suppliers
Marketing
Intermediarie
s
Competitors
Public
Customers
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THE COMPANY
Top Management
Finance department
Research and development
Purchasing department
Operation department
Accounting department
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SUPPLIERS
Provide the resource needed by the company to
produce its goods and services
Marketing manager responsibility watch supply
availability and costs.
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WHO IS THE SUPPLIER????
MARKETING INTERMEDIARIES
Help the company to promote, sell, and distribute
its product to final buyers.
Types of Marketing Intermediaries
Resellers
Physical distribution
Marketing service agencies
Financial intermediaries
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COMPETITORS
Company must provide greater Customer value &
satisfaction than its competitors.
Must gain strategic advantages by positioning their
offerings strongly against competitors offerings in
the minds of consumers.
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PUBLIC
Any group that has an actual or potential interest in
or impact on an organizations ability to achieve its
objectives.
Types of public
Financial public
Media public
Government public
Local public
General public

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CUSTOMERS
To serve target customer and create strong
relationship.
Types of Customers
Consumers market
Business markets
Reseller markets
Government markets
International markets
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2.2 THE COMPANYS MACRO ENVIRONMENT
(EXTERNAL ENVIRONMENT)
Company
Demographi
c
Economic
Natural
Technologic
al
Political
Cultural
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DEMOGRAPHIC
Demography the study of human populations in
terms of size, location, age, gender, race,
occupation.
Important of demographic environment
Involve people that make up markets
Baby boomers people born between 1946 and
1964

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Baby boomers
(1946-1964)
Gen X (1965-
1976)
Gen Y(1977-
current)
CHARACTERISTIC OF GEN X AND Y
Generation X Generation Y
People born between 1965
and 1976
High potential divorce rates
Cautious economic outlook
Less Materialistic
Family Comes First
Lag behind retirement
Savings
Born between 1977 and 2000
/current
More than 3 times larger then
Gen X
Impatient
Family-Oriented
Inquisitive
Opinionated
Diverse
Time Managers
Street Smart
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ECONOMIC ENVIRONMENT
Consist of factors that affect consumers purchasing
power and sending patterns
Industrial economic are richer markets
Marketer need to concern of three economic area;
Change in income
Inflation
Recession
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CONT.
Changes in income
Increase in income give
consumers greater power in
spending and create demand
Produce better quality products
generate more sales
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CONT
Changes in consumer
spending
As income rises
The percentage spent on food
declines
The percentage spent on housing
remains constants
The percentage spent on the
savings increases
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Inflation
Situation in rise in price, without
corresponding increase in salaries
As a resulted, purchasing power will
be decreased.



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$
,
Spendin
g
Recessions
Make greater efforts in improving
product
Try introduce new product
Provide additional customer
services
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Unemployment ,
Demand
NATURAL ENVIRONMENT
Involves the natural resources that are needed as
inputs by marketers or that are affected by
marketing activities

Trends
Shortage of raw materials
Increased pollution
Increase government intervention
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TECHNOLOGICAL ENVIRONMENT
Most dramatic force in changing
marketplace
Creates new products and
opportunities
Safety of new product always a
concern
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POLITICAL ENVIRONMENT
Consist of laws, government agencies, and
pressure groups that influence or limit various
organizations and individuals in a given society.
Legal influence in marketing
General monetary & fiscal policies
Broad social legislation & policies
Government relationship with individual industries
Laws affecting marketing itself
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CULTURAL ENVIRONMENT
Consist of demographic characteristic, custom &
value of population
Understanding of beliefs, attitudes, customs &
cultural lead the business to successes & make
profits.
Need to understand by marketers to produce the
right product.


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2.3 ETHICAL BEHAVIOR IN BUSINESS
Ethic refer to the moral principles or
value that generally govern the
conduct of an individuals or a group,
morals are the rules people develop
a result of cultural values and norm
(Lamb)

ethic as a beliefs about what is right
and wrong, or good and bad that
affect others (Giffin, 1995)

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ETHICS AND MORALS
Good or Bad
Foundation of ethical behavior

Morals and Business Behavior
Examine the consequences
Stress the importance of rules


ETHICAL DEVELOPMENT LEVELS
Preconventional
Morality
Conventional
Morality
Postconventional
Morality
More
Mature


More
Childlike
Based on what will be
punished or rewarded
Self-centered, calculating,
selfish
Moves toward the
expectations of society
Concerned over legality and
the opinion of others
Concern about how they
judge themselves
Concern if it is right in
the long run
FACTORS INFLUENCING ETHICAL
DECISION MAKING
Extent of ethical
problems
Top-management
actions
Potential magnitude of
consequences
Social consensus
Probability of harm
Time between decision
and consequences
Number affected by the
decision
LO
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UNETHICAL PRACTICE IN MARKETING
False & Misleading advertisement
Misleading product & service
warranty
Price discrimination
Unsafe product or services
Unfair remarks about competitors
& their products
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2.4 CORPORATE SOCIAL & RESPONSIBILITY (CSR)

Social responsibility is a business obligation to
maximize its positive impact & minimize its negative
impact (Ferrel & Hirt, 1993)

The attempt of business to balance its commitments
to groups & individuals in its environment, including
customers, other business, employees & investors
(Giffin (1996)
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Ethical
Do what is right.
Legal
Obey the Law.
Economic
Be profitable.
Philanthropic
Be a good citizen.
Contribute resource to community;
improve the quality of life
Be ethical, do what is right,
just & fair. Avoid harm.
Obey the law. Law is
societys codification of
right & wrong. Play by
the rules of game.
Be profitable. Profit is
the foundation on which
all other responsibilities
rest.
STAKEHOLDERS THEORY
A theory that holds that social responsibility is
paying attention to the interest of every affected
stakeholders in every aspect of a firms operation.
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Stakeholder theory
Jobs and income at stakes
Expect wages, benefits, & meaningful work
Employees
Must safeguard the welfare of organization
Must balance the multiple claims of conflicting stakeholders
Management
Generate revenue for the organization
Expect quality goods and service, achieve satisfaction
Customers
Grants the firm the right to build facilities
Expects good citizenship
Local community
Materials determine the quality of the product
Depend on firms success for survival
suppliers
Have a financial stake in the form of stock
Expect a reasonable return based upon inherent risk of their
investment
Owners/
Stock holders
End of slides
Next chapter : 3.0 Consumer Decisions Making

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