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DecisionMakingintheNewEraofMarketing,Chapter3LectureSlidesSolomon,Stuart,Carson,&SmithYournamehereCoursetitle/numberDate,ChapterLearningObjectives,Whenyouhavecompletedyourstudyofthischapter,youshouldbeableto:,ExplainwhyorganizationshaveadoptedaNewEramarketingfocusonethicsandsocialresponsibilityDescribetheNewEraemphasisonqualityDiscusssomeoftheimportantaspectsofanorganizationsinternalenvironment.Explainwhymarketersscananorganizationsexternalbusinessenvironment.,IntroductiontotheTopic,Socialprofit:thebenefitanorganizationandsocietyreceivefromtheorganizationsethicalpractices,communityservice,effortstopromoteculturaldiversity,andconcernforthenaturalenvironment.,Manyorganizationshavecometorecognizethatthevalueofdoingtherightthinggoesbeyondtheshorttermpublicrelationsbenefitsthatmaybegained.Butwhatdoes“doingtherightthing”meaninanorganizationalcontext?,Figure3.1,EthicalBehaviourintheMarketplace,Businessethics:rulesofconductforanorganization.Thesearethebasicvaluesthatguideafirmsbehaviour.Thedifferencebetweenwhatisrightandwrongisaverysubjectivething,whichiswhythereissomuchvariationinthisarea.,Codeofethics:writtenstandardsofbehaviortowhicheveryoneintheorganizationmustsubscribe.“Thefishstinksfromthehead”wouldsuggestthatemployeestaketheirdirectionfromseniormanagerswhenconsideringethicalissues.Shareholdersrights,andthebehaviourofseniormanagementhascomeunderintensemediascrutinyinearly2002,forgoodreason.,AMACodeofEthics,TheAmericanMarketingAssociation(AMA)publishesacodeofethicsformarketersonitswebsite,whichconsistsoffourdifferentcategoriesofresponsibilities.,ToacceptresponsibilityfortheconsequencesoftheiractivitiesTonotknowinglydoharmToadheretoallapplicablelawsandregulationsBehonestandfairinalldealingswithconsumers,clients,employees,suppliers,distributors,andthepublic.Avoidparticipationinconflictofinterestsituationswithoutpriornoticetoallpartiesinvolved.,Consumerism:FightingBack,Consumerism:asocialmovementthatattemptstoprotectconsumersfromharmfulbusinesspractices.TheConsumersAssociationofCanada(CAC)wascreatedtoinform,educate,andadvocateonbehalfofconsumers.,Theirseven(plusone)consumerrightsare:TherighttosafetyTherighttobeinformedTherighttobeheardTherighttoredressTherighttochooseTherighttoahealthyenvironmentTherighttoaconsumereducationTherighttoprivacy,EthicsintheMarketingMix,Productsafetyisanimportantissuetoprotectconsumersfromharmorlossduetodefectiveordangerousproducts.SafetystandardsforproductsareestablishedandmonitoredbyindependentorganizationssuchastheCanadianStandardsAssociation(CSA).,Pricefixing:anillegalbusinesspracticeinwhichfirmsdecideinadvanceonacommonpricefortheirproduct.Pricediscrimination:charginglowerpricestolargercustomers.Thisislegalwhenitcanbeshownthatcostsavingsareavailabletothemanufactureroritisnecessarytomeetcompetitorspricing.Pricegouging:chargingexcessivepricesinresponsetoahighdemand/lowsupplysituation.,EthicsintheMarketingMix(continued),Productpromotioncanbeaproblemintermsofmisleadingorfalseadvertising.TheadvertisingindustryinCanadaisself-regulatingthroughtheAdvertisingStandardsCanada(ASC).Advertisingtochildrenandgenderstereotypingaretwoareasofconcern,Slottingallowance:afeepaidbyamanufacturertoaretailerinexchangeforagreeingtoplaceproductsontheretailersshelves.Thisisstandardpracticeinthegrocerytrade,whichhasbeenaidedbythewidespreaduseofprivatelabelbrands.Thedangeristhatconsumersmaynothaveaccesstotheproductsofsmallermanufacturerswhocannotaffordtopaythesefees.,AFocusonSocialResponsibility,Socialresponsibility:amanagementpracticeinwhichorganizationsseektoengageinactivitiesthathaveapositiveeffectonsocietyandpromotethepublicgood.,Environmentalstewardship:apositiontakenbyanorganizationtoprotectorenhancethenaturalenvironmentasitconductsitsbusinessactivities.Greenmarketing:amarketingstrategythatsupportsenvironmentalstewardshipbycreatinganenvironmentallyfoundeddifferentialbenefitinthemindsofconsumers.Thisefforthasbeenhamperedbyalackofconsensusonwhatitmeanstobe“green”,ServingSocietyandCommunity,Causemarketing:amarketingstrategyinwhichanorganizationservesitscommunitybypromotingandsupportingaworthycauseorbyallyingitselfwithanot-for-profitorganizationtotackleasocialproblem.,Consumerswillrespondtothisiftheybelievetheorganizationtobesincere.Culturaldiversity:amanagementpracticethatactivelyseekstoincludepeopleofdifferentsexes,races,ethnicgroups,andreligionsinorganizationsemployees,customers,suppliers,anddistributionchannelpartners.,AFocusonQuality,Quality:Thelevelofperformance,reliability,features,safety,cost,orotherproductcharacteristicsthatconsumersexpecttosatisfytheirneedsandwants.,TheNationalQualityInstitutesurveyscustomersandcompaniesonqualityissues.TotalQualityManagement(TQM):amanagementphilosophythatfocusesonsatisfyingcustomersthroughempoweringemployeestobeanactivepartofcontinuousqualityimprovement.ISO9000:criteriadevelopedbytheInternationalStandardsOrganization(ISO)toregulateproductqualityinternationally.TheISO9000programisadministeredinCanadabytheStandardsCouncilofCanada.,TheInternalBusinessEnvironment,Theinternalenvironmentoftheorganizationincludesitsresourcesandcompetencies.Corporateculture:thesetofvalues,norms,andbeliefsthatareheldbyanorganizationsmanagersandthatinfluencethatbehaviorofeveryoneintheorganization.,Organizationalculturewillvaryinitsattitudetowardsrisktaking,aswellasindividualityandcreativity.Organizationswillalsovaryintheirattitudetowardsthepursuitofprofitsversussatisfyingtheneedsofstakeholders,suchasemployees,customers,suppliers,andthepublic.,TheInternalBusinessEnvironment,Publics:groupsofpeople-includingsuppliers,channelintermediaries,customers,employees,shareholders,financialinstitutions,government,themedia,andpublicinterestgroups-thathaveaninterestinanorganization.,Competitionwithinanindustrycanbecomedestructiveasintensitybuilds,asseeninthebattleforthelongdistancemarketsincede-regulationofthisindustry.Inthelongrun,nobodywinsinapricewar.Whowinsintheshortrun?,TheExternalBusinessEnvironment,Theeconomicenvironmenthasabiginfluenceonthesuccessofanorganizationsmarketingstrategy.Businesscycle:theoverallpatternsofchangeintheeconomy-includingperiodsofprosperity,recession,depression,andrecovery-thataffectconsumerandbusinesspurchasingpower.,Consumerconfidence:anindicatoroffuturespendingpatterns,measuredbytheextenttowhichpeopleareoptimisticorpessimisticaboutthestateoftheeconomy.Theconceptofderiveddemandtellsusthatalleconomicactivityisderivedfromsalesatretail,whichiswhywekeeptrackofconsumerspendinglevels.,TheCompetitiveEnvironment,Competitiveintelligence(CI):theprocessofgatheringandanalyzingpublicinformationaboutrivalfirms.Whilestillarelativelynewconcepttomostfirms,CIcanassistdecisionmakersindevelopingsuperiormarketingstrategies.,Competitionwithinthemicroenvironmentincludesallproductalternativesthataconsumermaychoosetospendtheirdiscretionaryincomeon.Discretionaryincome:theportionofincomepeoplehaveleftoverafterpayingforsuchnecessitiesashousing,utilities,food,andclothing.Wecandifferentiatebetweentypesofcompetition.,CompetitionintheMicroEnvironment,Productcompetition:verydifferentproductscompetingtosatisfythesameconsumerneedsandwants.Vacationresortscompeteagainstcruiselines,bustours,adventuretours,andRVcampingtosatisfytheneedforrelaxation.,Brandcompetition:similarproductsorservicesthatcompetebasedonthebrandsreputationorperceivedbenefits.Brandnamesareusedbyconsumersasanindicatorofqualityorpositioning.Successfulbrandnamescanusethisequitytointroducenewproductsthathaveahigherrateofacceptanceduetotheirassociationwiththebrand.,CompetitionintheMacroenvironment,Monopoly:amarketsituationinwhichonefirm,theonlysupplierofaparticularproduct,isabletocontroltheprice,qualityandsupplyofthatproduct.,Oligopoly:amarketstructureinawhichrelativelysmallnumberofsellers,eachholdingasubstantialshareorthemarket,competeinamarketwithmanybuyers.Monopolisticcompetition:amarketstructureinwhichmayfirms,eachhavingslightlydifferentproducts,offerconsumeruniquebenefits.Perfectcompetition:amarketstructureinwhichmanysmallsellers,allofwhichoffersimilarproducts,areunabletohaveimpactonthequality,price,orsupplyofaproduct.,Rapidlychangingtechnologycancreatebothopportunitiesandthreatstoorganizationsattemptingtodevelopcompetitivemarketingstrategies.,Organizationsmayusetheirinvestmentintechnologyasthebasisoftheircompetitiveadvantage,butthiscanbeanever-movingtarget.Proprietarytechnologyisavaluableassetforanorganizationandneedstobeprotected.Patent:legaldocumentgrantinganindividualorfirmexclusiverighttoproduceandsellaparticularinvention.,TheTechnologicalEnvironment,Thelegalenvironmentincludesalllaws-municipal,provincial,federal,andglobal-thataffectbusinesses.Businessesignorethisareaattheirperilassomeoftheiractionscanposeseriousrisksofliability.,ThemainfederallawgoverningbusinessactivityistheCompetitionAct,whichisintendedtopromotecompetitionandefficiencyinthemarketplace.Otherlawsaffe

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