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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
1. Companies that fail to develop strategies and programs to incorporate ethics and social
responsibility into their organizational culture may pay the price with poor marketing
performance and the potential costs of legal violations, civil litigation, and damaging
publicity when questionable activities are made public.
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
DISCUSSION STARTERS
Discussion Starter 1: Monopoly
ASK: Have you ever heard anyone call Google a monopoly? Did you know that the company was declared
a monopoly in France, where antitrust legislation tends to be stricter than in the United States?
ASK: Do you think Microsoft is a monopoly? If yes, is it a bad thing?
Discussion Starter 2: Consumer Confidence Index
ASK: Have any of you heard of the Consumer Confidence Index (CCI)?
ASK: How would marketers use the CCI?
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or dup licated, or posted to a publicly accessible website, in whole or in part.
By tracking the CCI marketers can make better predications about how much consumers will be willing to
spend in the upcoming months. For example, if the CCI is falling, consumers are pessimistic about the
future of the economy. This information might indicate consumers are less willing to purchase high-ticket
items, such as cars or computers. It might also indicate that consumers may cut back on non-essential items.
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
CLASS EXERCISES
Class Exercise 1
The six environmental forces are competitive, economic, political, legal and regulatory, technological, and
sociocultural. With which are each of the following most associated?
Question
Answer
1.
Prosperity
economic
2.
Federal Trade Commission
regulatory
3.
Personal computers that understand human speech
technological
4.
Development and widespread use of cellular phones
technological
5.
People’s willingness to spend
economic
6.
Contributions to campaign funds
political
7.
A society’s high material standard of living
sociocultural
8.
Sherman Antitrust Act
legal
9.
Better Business Bureau
regulatory
10.
Consumerism
sociocultural
11.
Discretionary income
economic
12.
Food and Drug Administration
regulatory
13.
A monopoly
competitive
14.
Government purchases of goods and services
political
15.
Group of people threatening to boycott the sponsors
of a television program that they believe contains too
much sex and violence
sociocultural
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
CHAPTER QUIZ
1. The rapid adoption of the use of the Internet has resulted in rapid changes such as the increase of
distance learning. These effects of technology are collectively known as:
a. reach.
b. the self-sustaining nature.
c. growth.
d. technological advancement.
e. dynamics.
2. Although all types of competition will affect Specialty Motors’ marketing performance, it will be most
concerned about __________ competitors.
a. total budget
b. generic
c. Japanese
d. product
e. brand
3. Total disposable income is at its lowest during which of the following?
a. Stagflation
b. Recession
c. Recovery
d. Depression
e. Inflation
4. Environmental scanning means __________ information about the marketing environment, whereas
environmental analysis is concerned with __________ this information.
a. assessing; collecting
b. assessing; interpreting
c. collecting; assessing
d. interpreting; observing
e. gathering; observing
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
ANSWERS TO ISSUES FOR DISCUSSION AND REVIEW
1. Why are environmental scanning and analysis important to marketers?
2. What are four types of competition? Which is most important to marketers?
Four types of competition include:
3. Define income, disposable income, and discretionary income. How does each type of income affect
consumer buying power?
4. What factors influence a buyer’s willingness to spend?
5. What are the goals of the Federal Trade Commission? List the ways in which the FTC affects
marketing activities. Do you think that a single regulatory agency should have such broad
jurisdiction over so many marketing practices? Why or why not?
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
The FTC enforces laws and establishes guidelines and operating procedures. A major goal is to assist
6. Name several nongovernmental regulatory forces. Do you believe self-regulation is more or less
effective than governmental regulatory agencies? Why?
Students’ answers may vary. One well-known nongovernmental agency is the Better Business Bureau
7. Discuss the impact of technology on marketing activities.
8. In what ways are cultural values changing? How are marketers responding to these changes?
9. What is social responsibility, and why is it important?
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
ANSWERS TO DEVELOPING YOUR MARKETING PLAN
The information obtained from the following questions should assist you in developing various aspects of
your marketing plan. Develop your marketing plan online using the Interactive Marketing Plan at
www.cengagebrain.com.
1. Describe the current competitive market for your product. Can you identify the number of
brands or market share they hold? Expand your analysis to include other products that are
similar or could be substituted for yours.
Students should conduct solid research into their potential markets and support their answers.
2. Using the business cycle pattern, in which of the four stages is the current state of the
economy? Can you identify any changes in consumer buying power that would affect the sale
and use of your product?
3. Referring to Tables 3.2 and 3.3, do you recognize any laws or regulatory agencies that would
have jurisdiction over your type of product?
4. Conduct a brief technology assessment, determining the impact that technology has on your
product, its sale, or use.
5. Discuss how your product could be affected by changes in social attitudes, demographic
characteristics, or lifestyles.
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
or target markets with different lifestyles than have been traditionally drawn to their product.
Mostly, this exercise should make students aware of how much is not controllable by marketers,
and how important it is to plan and anticipate changes in the marketing environment.
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Chapter 3: The Marketing Environment, Social Responsibility, and Ethics
COMMENTS ON VIDEO CASE 3: TOMS EXPANDS ONE FOR ONE®
MODEL TO EYEWEAR
Summary
TOMS is known for its for-profit philanthropic business model, which allows the company to donate one
pair of shoes to a child for every pair of shoes purchased. TOMS is now applying that model to eyewear.
For every pair of sunglasses TOMS sells, a person with vision problems in a developing nation receives
surgery, prescription glasses, or medical treatment to help restore his or her sight. TOMS takes its
obligations for social responsibility seriously by working closely with local humanitarian organizations and
striving for a responsible supply chain. Even though they pay higher prices, TOMS’s customers feel
committed to the company because they know that their purchases are going toward a good cause.
Questions for Discussion
1. Do you think TOMS is successful because of its unique products, or its approach to social
responsibility?
Students’ opinions will vary. Some people really like TOMS for its products, regardless of the
2. How does TOMS manage its supply chain in order to ensure ethical and socially responsible
conduct?
3. How does TOMS’s business model relate to the understanding of stakeholders and strategic
philanthropy?