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DecisionMakingintheNewEraofMarketing Chapter3LectureSlidesSolomon Stuart Carson SmithYournamehereCoursetitle numberDate 3 2 ChapterLearningObjectives Whenyouhavecompletedyourstudyofthischapter youshouldbeableto ExplainwhyorganizationshaveadoptedaNewEramarketingfocusonethicsandsocialresponsibilityDescribetheNewEraemphasisonqualityDiscusssomeoftheimportantaspectsofanorganization sinternalenvironment Explainwhymarketersscananorganization sexternalbusinessenvironment 3 3 IntroductiontotheTopic Socialprofit thebenefitanorganizationandsocietyreceivefromtheorganization sethicalpractices communityservice effortstopromoteculturaldiversity andconcernforthenaturalenvironment Manyorganizationshavecometorecognizethatthevalueofdoingtherightthinggoesbeyondtheshorttermpublicrelationsbenefitsthatmaybegained Butwhatdoes doingtherightthing meaninanorganizationalcontext Figure3 1 3 4 EthicalBehaviourintheMarketplace Businessethics rulesofconductforanorganization Thesearethebasicvaluesthatguideafirm sbehaviour Thedifferencebetweenwhatisrightandwrongisaverysubjectivething whichiswhythereissomuchvariationinthisarea Codeofethics writtenstandardsofbehaviortowhicheveryoneintheorganizationmustsubscribe Thefishstinksfromthehead wouldsuggestthatemployeestaketheirdirectionfromseniormanagerswhenconsideringethicalissues Shareholder srights andthebehaviourofseniormanagementhascomeunderintensemediascrutinyinearly2002 forgoodreason 3 5 AMACodeofEthics TheAmericanMarketingAssociation AMA publishesacodeofethicsformarketersonitswebsite whichconsistsoffourdifferentcategoriesofresponsibilities ToacceptresponsibilityfortheconsequencesoftheiractivitiesTonotknowinglydoharmToadheretoallapplicablelawsandregulationsBehonestandfairinalldealingswithconsumers clients employees suppliers distributors andthepublic Avoidparticipationinconflictofinterestsituationswithoutpriornoticetoallpartiesinvolved 3 6 Consumerism FightingBack Consumerism asocialmovementthatattemptstoprotectconsumersfromharmfulbusinesspractices TheConsumers AssociationofCanada CAC wascreatedtoinform educate andadvocateonbehalfofconsumers Theirseven plusone consumerrightsare TherighttosafetyTherighttobeinformedTherighttobeheardTherighttoredressTherighttochooseTherighttoahealthyenvironmentTherighttoaconsumereducationTherighttoprivacy 3 7 EthicsintheMarketingMix Productsafetyisanimportantissuetoprotectconsumersfromharmorlossduetodefectiveordangerousproducts SafetystandardsforproductsareestablishedandmonitoredbyindependentorganizationssuchastheCanadianStandardsAssociation CSA Pricefixing anillegalbusinesspracticeinwhichfirmsdecideinadvanceonacommonpricefortheirproduct Pricediscrimination charginglowerpricestolargercustomers Thisislegalwhenitcanbeshownthatcostsavingsareavailabletothemanufactureroritisnecessarytomeetcompetitors pricing Pricegouging chargingexcessivepricesinresponsetoahighdemand lowsupplysituation 3 8 EthicsintheMarketingMix continued Productpromotioncanbeaproblemintermsofmisleadingorfalseadvertising TheadvertisingindustryinCanadaisself regulatingthroughtheAdvertisingStandardsCanada ASC Advertisingtochildrenandgenderstereotypingaretwoareasofconcern Slottingallowance afeepaidbyamanufacturertoaretailerinexchangeforagreeingtoplaceproductsontheretailer sshelves Thisisstandardpracticeinthegrocerytrade whichhasbeenaidedbythewidespreaduseofprivatelabelbrands Thedangeristhatconsumersmaynothaveaccesstotheproductsofsmallermanufacturerswhocannotaffordtopaythesefees 3 9 AFocusonSocialResponsibility Socialresponsibility amanagementpracticeinwhichorganizationsseektoengageinactivitiesthathaveapositiveeffectonsocietyandpromotethepublicgood Environmentalstewardship apositiontakenbyanorganizationtoprotectorenhancethenaturalenvironmentasitconductsitsbusinessactivities Greenmarketing amarketingstrategythatsupportsenvironmentalstewardshipbycreatinganenvironmentallyfoundeddifferentialbenefitinthemindsofconsumers Thisefforthasbeenhamperedbyalackofconsensusonwhatitmeanstobe green 3 10 ServingSocietyandCommunity Causemarketing amarketingstrategyinwhichanorganizationservesitscommunitybypromotingandsupportingaworthycauseorbyallyingitselfwithanot for profitorganizationtotackleasocialproblem Consumerswillrespondtothisiftheybelievetheorganizationtobesincere Culturaldiversity amanagementpracticethatactivelyseekstoincludepeopleofdifferentsexes races ethnicgroups andreligionsinorganization semployees customers suppliers anddistributionchannelpartners 3 11 AFocusonQuality Quality Thelevelofperformance reliability features safety cost orotherproductcharacteristicsthatconsumersexpecttosatisfytheirneedsandwants TheNationalQualityInstitutesurveyscustomersandcompaniesonqualityissues TotalQualityManagement TQM amanagementphilosophythatfocusesonsatisfyingcustomersthroughempoweringemployeestobeanactivepartofcontinuousqualityimprovement ISO9000 criteriadevelopedbytheInternationalStandardsOrganization ISO toregulateproductqualityinternationally TheISO9000programisadministeredinCanadabytheStandardsCouncilofCanada 3 12 TheInternalBusinessEnvironment Theinternalenvironmentoftheorganizationincludesitsresourcesandcompetencies Corporateculture thesetofvalues norms andbeliefsthatareheldbyanorganization smanagersandthatinfluencethatbehaviorofeveryoneintheorganization Organizationalculturewillvaryinitsattitudetowardsrisktaking aswellasindividualityandcreativity Organizationswillalsovaryintheirattitudetowardsthepursuitofprofitsversussatisfyingtheneedsofstakeholders suchasemployees customers suppliers andthepublic 3 13 TheInternalBusinessEnvironment Publics groupsofpeople includingsuppliers channelintermediaries customers employees shareholders financialinstitutions government themedia andpublicinterestgroups thathaveaninterestinanorganization Competitionwithinanindustrycanbecomedestructiveasintensitybuilds asseeninthebattleforthelongdistancemarketsincede regulationofthisindustry Inthelongrun nobodywinsinapricewar Whowinsintheshortrun 3 14 TheExternalBusinessEnvironment Theeconomicenvironmenthasabiginfluenceonthesuccessofanorganization smarketingstrategy Businesscycle theoverallpatternsofchangeintheeconomy includingperiodsofprosperity recession depression andrecovery thataffectconsumerandbusinesspurchasingpower Consumerconfidence anindicatoroffuturespendingpatterns measuredbytheextenttowhichpeopleareoptimisticorpessimisticaboutthestateoftheeconomy Theconceptofderiveddemandtellsusthatalleconomicactivityisderivedfromsalesatretail whichiswhywekeeptrackofconsumerspendinglevels 3 15 TheCompetitiveEnvironment Competitiveintelligence CI theprocessofgatheringandanalyzingpublicinformationaboutrivalfirms Whilestillarelativelynewconcepttomostfirms CIcanassistdecisionmakersindevelopingsuperiormarketingstrategies Competitionwithinthemicroenvironmentincludesallproductalternativesthataconsumermaychoosetospendtheirdiscretionaryincomeon Discretionaryincome theportionofincomepeoplehaveleftoverafterpayingforsuchnecessitiesashousing utilities food andclothing Wecandifferentiatebetweentypesofcompetition 3 16 CompetitionintheMicroEnvironment Productcompetition verydifferentproductscompetingtosatisfythesameconsumerneedsandwants Vacationresortscompeteagainstcruiselines bustours adventuretours andRVcampingtosatisfytheneedforrelaxation Brandcompetition similarproductsorservicesthatcompetebasedonthebrand sreputationorperceivedbenefits Brandnamesareusedbyconsumersasanindicatorofqualityorpositioning Successfulbrandnamescanusethisequitytointroducenewproductsthathaveahigherrateofacceptanceduetotheirassociationwiththebrand 3 17 CompetitionintheMacroenvironment Monopoly amarketsituationinwhichonefirm theonlysupplierofaparticularproduct isabletocontroltheprice qualityandsupplyofthatproduct Oligopoly amarketstructureinawhichrelativelysmallnumberofsellers eachholdingasubstantialshareorthemarket competeinamarketwithmanybuyers Monopolisticcompetition amarketstructureinwhichmayfirms eachhavingslightlydifferentproducts offerconsumeruniquebenefits Perfectcompetition amarketstructureinwhichmanysmallsellers allofwhichoffersimilarproducts areunabletohaveimpactonthequality price orsupplyofaproduct 3 18 Rapidlychangingtechnologycancreatebothopportunitiesandthreatstoorganizationsattemptingtodevelopcompetitivemarketingstrategies Organizationsmayusetheirinvestmentintechnologyasthebasisoftheircompetitiveadvantage butthiscanbeanever movingtarget Proprietarytechnologyisavaluableassetforanorganizationandneedstobeprotected Patent legaldocumentgrantinganindividualorfirmexclusiverighttoproduceandsellaparticularinvention TheTechnologicalEnvironment 3 19 Thelegalenvironmentincludesalllaws municipal provincial federal andglobal thataffectbusinesses Businessesignorethisareaattheirperilassomeoftheiractionscanposeseriousrisksofliability ThemainfederallawgoverningbusinessactivityistheCompetitionAct whichisintendedtopromotecompetitionandefficiencyinthemarketplace Otherlawsaffe

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