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ConsumerBehavior:Buying,Having,andBeingFourteenthEditionChapter2ConsumerEthics,theMarketplace,andthePlanetCopyright©2024
PearsonEducation,Inc.AllRightsReservedLearningObjectives(1of2)2.1
DefinebusinessethicsandidentifytheelementsthatcomprisetheP
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Eframework.2.2
Summarizehowthepoliticalenvironmentaffectsconsumerdecisionmaking.2.3
Discusshowtheeconomiclandscapeaffectsconsumers’accesstothemarketplace.2.4Explainthewaysmarketersrespondtosocialissuestoshapeconsumerbehavior.LearningObjectives(2of2)2.5
Describethetechnologicalchangesthatarecreatingnewchallengesforconsumerprotection.2.6
Explainhowthelegalenvironmentinfluencesconsumerbehavior.2.7
Describehowconsumerbehaviordirectlyimpactstheenvironment.LearningObjective2.1DefinebusinessethicsandidentifytheelementsthatcomprisetheP
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Eframework.Whatisthe“Right”Thing?BusinessethicsarerulesofconductthatguideactionsinthemarketplaceThereareculturaldifferencesinwhatisconsideredethicalConsumersincreasinglyareconcernedabouttheimpactofmarketingactivitiesonimportantissueslikesocialjusticeForReflection(1of4)Advertisersareoftenblamedforpromotingamaterialisticsocietybymakingtheirproductsasdesirableaspossible.Doyouagreewiththis?Ifyes,ismaterialismabadthing?Ifno,whatareyourreasons?TheP
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EFrameworkTable2.1.ThePestleFrameworkPPoliticalEEconomicSSocialTTechnologicalLLegalEEnvironmentalConsumeractivismandslacktivismCulturejammingCorporatesocio-politicalactivismMarketaccessandliteracySocialjusticeandcancelcultureDataprivacyDataaccuracyandalgorithmbiasDatasecuritySocialmediaaddictionCyberbullyingGovernmentalregulationsandagenciesCorrectiveadvertisingConsumertheftandcounterfeitingConsciousconsumerismBrandpurposeCirculareconomyandfastfashionGreenmarketingProsocialbehaviorLearningObjective2.2Summarizehowthepoliticalenvironmentaffectsconsumerdecisionmaking.Culturejamming:astrategytodisrupteffortsbythecorporateworldtodominateourculturallandscapeP
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E:ThePoliticalEnvironmentConsumeractivism:consumersbandtogethertoattackwhattheyviewasunsafeorotherwiseharmfulCorporatesociopoliticalactivism(C
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A):todeliberatelytakeastandonacontroversialissueSlacktivism:smallandrelativelymeaninglessexpressionsofsupportforimportantcauses,suchaslikingacharityonFacebookNiketookaverycontroversialstandtosupportColinKaepernick’seffortsforracialjusticeLearningObjective2.3Discusshowtheeconomiclandscapeaffectsconsumers’accesstothemarketplace.Asthenumberofpeopleusingwheel-chairsgrowsbyovertwomillionperyearintheUnitedStatesalone,themarketforadaptiveclothingthatprovidesabroaderrangeofappareloptionsgrowsaswell.P
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E:TheEconomicEnvironmentDisabledconsumers:morethan10millionadultAmericanslivewithadisabilityConsumedconsumers:peoplewhoareusedorexploited,willinglyornot,forcommercialgaininthemarketplaceFooddeserts:acensustractwhere33percentofthepopulationor500peoplelivemorethanamilefromagrocerystoreinanurbanareaormorethan10milesawayinaruralareaLiteracyMedialiteracyFinancialliteracyFunctionalliteracyLearningObjective2.4Explainthewaysmarketersrespondtosocialissuestoshapeconsumerbehavior.ThenegativeracialstereotypeofUncleBenwasrecentlyretiredasthebrandwasrenamedBen’sOriginalP
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E:TheSocialEnvironment(1of2)Cancelculture:thephenomenonofthepubliccallingoutcompaniesformisstepsandrecommendingthatconsumersboycotttheguiltybrands.Causemarketing:apopularstrategythatalignsacompanyorbrandwithacausetogeneratebusinessandsocietalbenefits.P
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E:TheSocialEnvironment(2of2)Corporatesocialresponsibility(C
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R):processesthatencouragetheorganizationtomakeapositiveimpactonthestakeholdersinitscommunity,includingconsumers,employees,andtheenvironment.BenevolenthaloeffectTheshoecompanyT
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Siswell-knownforitspromisetogiveachildinneedapairofshoesforeverypairitsellsForReflection(2of4)Doyoupurchaseacertainproductbecauseoftheircause?Why?Doyouthinkorganizationssupportacauseforprofitsorbecausetheywanttobeactiveintheircommunity?LearningObjective2.5Describethetechnologicalchangesthatarecreatingnewchallengesforconsumerprotection.SaudiArabiaawardedcitizenshiptoa(Japanese-made)robotP
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E:TheTechnologicalEnvironmentDataPrivacyGeneralDataProtectionRegulation:requireswebsitestoprovidevisiblenoticeregardingprivateinformationtheycollectthroughcookiesandtogiveconsumersthechoicetodisagreetosuchtrackingDataAccuracyAcollagethataresearchsubjectmadeshowshowpervasivetechnologyisinacustomerjourneyIdentityTheftTable2.2PoisoningtheWell:TypesofMisinformationTheTechnologicalEnvironmentPushingtheEnvelopeArtificialintelligence:creatingnewopportunitiesandchallengesforconsumersandconsumerprotectionTechnologyAddictionsConsumeraddiction:aphysiologicalorpsychologicaldependencyonproductsorservicesCyberbullying:the“willfulandrepeatedharminflictedthroughtheuseofcomputer,cellphones,andotherelectronicdevicesDarkSideofC
BConsumedconsumersIllegalacquisitionandproductuseConsumertheftandfraudShrinkageSerialwardrobersCounterfeitingAnticonsumptionAddictiveConsumptionConsumeraddictionSocialmediaaddictionCyberbullyingPhantomVibrationSyndromeCompulsiveconsumptionForReflection(3of4)Doyouknowsomeonewhoisaddictedtosocialmedia?Inwhatway?Ifyouworkinretail,haveyouexperiencedconsumershabituallyreturningitems?ConsumerTerrorismCyberterrorismGuerrillamarketingLearningObjective2.6Explainhowthelegalenvironmentinfluencesconsumerbehavior.P
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E:TheLegalEnvironmentGovernmentalregulationsandagenciesConsumersbehavingbadlyConsumertheftandfraudUnauthorizedknock-offsThepopularcontraceptivedrugYazwasrequiredtoruncorrectiveadvertisingtoaddressexaggeratedorinaccurateclaimsSampleofFederalLegislationIntendedtoEnhanceConsumers’Welfare(1of3)Table2.3SampleofFederalLegislationIntendedtoEnhanceConsumers’WelfareYearActPurpose1953FlammableFabricsActProhibitsthetransportationofflammablefabricsacrossstatelines1958NationalTrafficandSafetyActCreatessafetystandardsforcarsandtires1958AutomobileInformationDisclosureActRequiresautomobilemanufacturerstopostsuggestedretailpricesonnewcars1966FairPackagingandLabelingActRegulatespackagingandlabelingofconsumerproducts(manufacturersmustprovideinformationaboutpackagecontentsandorigin)1966ChildProtectionActProhibitssaleofdangeroustoysandotheritems
1967FederalCigaretteLabelingandAdvertisingActRequirescigarettepackagestocarryawarninglabelfromtheSurgeonGeneral1968Truth-in-LendingAct
Requireslenderstodivulgethetruecostsofacredittransaction1969NationalEnvironmentalPolicyActEstablishedanationalenvironmentalpolicyandcreatedtheCouncilonEnvironmentalQualitytomonitortheeffectsofproductsontheenvironment1972ConsumerProductsSafetyActEstablishedtheConsumerProductSafetyCommissiontoidentifyunsafeproducts,establishsafetystandards,recalldefectiveproducts,andbandangerousproducts
SampleofFederalLegislationIntendedtoEnhanceConsumers’Welfare(2of3)Table2.3[Continued]Year
Act
Purpose
1975ConsumerGoodsPricingActBanstheuseofpricemaintenanceagreementsamongmanufacturersandresellers.1975Magnuson-MossWarrantyImprovementAct
CreatesdisclosurestandardsforconsumerproductwarrantiesandallowstheFederalTradeCommissiontosetpolicyregardingunfairordeceptivepractices.1990TheNutritionLabelingandEducationActReaffirmsthelegalbasisfortheFoodandDrugAdministration’snewrulesonfoodlabellingandestablishesatimetablefortheimplementationofthoserules.1998InternetTaxFreedomActEstablishedamoratoriumonspecialtaxationoftheInternet,includingtaxationofaccessfeespaidtoAmericaOnlineandotherInternetServiceProviders.2010Dodd-FrankWallStreetReformandConsumerProtectionActPromptedbytherecessionthatbeganin2008,intendstopromotethefinancialstabilityoftheUnitedStatesbyimprovingaccountabilityandtransparencyinthefinancialsystem,toend“toobigtofail,”toprotecttheAmericantaxpayerbyendingbailouts,andtoprotectconsumersfromabusivefinancialservicespractices.SampleofFederalLegislationIntendedtoEnhanceConsumers’Welfare(3of3)Table2.3[Continued]Year
Act
Purpose
2016.ConsumerReviewFairnessActof2016Passedinresponsetoanumberofincidentswherecompaniestriedtostiflenegativeonlineuserreviewsbyincludinga“gagclause”inacontractthatthreatenslegalactionormonetarydamageswhencustomerssaybadthingsaboutthecompany.ThebillallowstheF
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Candindividualstatestotakeactionagainstcompaniesthattrythistactic.2021ConsumerProtectionActThislegislationauthorizestheFederalTradeCommission(F
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C)toexpanditsprotectionofconsumersfromfraudinthemarketplacebyempoweringtheFederalTradeCommissiontoseeklegalandmonetaryreliefforvictims.U.S.RegulatoryAgenciesandResponsibilitiesTable2.4U.S.RegulatoryAgenciesandResponsibilitiesRegulatoryagency
Responsibilities
ConsumerProductSafetyCommission(C
P
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C)
Protectsthepublicfrompotentiallyhazardousproducts.Throughregulationandtestingprograms,theC
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Chelpsfirmsmakesuretheirproductswon’tharmcustomersEnvironmentalProtectionAgency(E
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A)
Developsandenforcesregulationsaimedatprotectingtheenvironment.SuchregulationshaveamajorimpactonthematerialsandprocessesthatmanufacturersuseintheirproductsandthusontheabilityofcompaniestodevelopproductsFederalCommunicationsCommission(F
C
C)
Regulatestelephone,radio,andtelevision.F
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Cregulationsdirectlyaffectthemarketingactivitiesofcompaniesinthecommunicationsindustries,andtheyhaveanindirecteffectonallfirmsthatusebroadcastmediaformarketingcommunicationsFederalTradeCommission(F
T
C)Enforceslawsagainstdeceptiveadvertisingandproductlabelingregulations.MarketersmustconstantlykeepabreastofchangesinF
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CregulationstoavoidcostlyfinesFoodandDrugAdministration(F
D
A)Enforceslawsandregulationsonfoods,drugs,cosmetics,andveterinaryproducts.Marketersofpharmaceuticals,over-the-countermedicines,andavarietyofotherproductsmustgetF
D
Aapprovalbeforetheycanintroduceproductstothemarket.
InterstateCommerceCommission(I
C
C)
Regulatesinterstatebus,truck,rail,andwateroperations;theabilityofafirmtoefficientlymoveproductstoitscustomersdependsonI
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CpoliciesandregulationLearningObjective2.7Describehowconsumerbehaviordirectlyimpactstheenvironment.P
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E:TheNaturalEnvironmentSustainability:basedonasimpleprinciple:Everythingthatweneedforoursurvivalandwell-beingdepends,eitherdirectlyorindirectly,onournaturalenvironmentEnvironmentalactivistGretaThunberg’spassionhasfueledaglobalmovementinwhichconsumersareurginggovernmentsandcorporationstoaddresstheclimatechangecrisisFigure2.1TheCircularEconomySustainabilityandEnvironmentalStewardshipAsustainablebusinessmodel
isnotjustaboutreducingacompany’scarbonfootprintSixoutofeverytencompaniesthatconverttoasustainablebusinessmodelhaveprofitedfinanciallyNativedeodorantisapopularchoiceforsomeconsumersbecauseofitsfocusonsustainabilityGreenMarketingandGreenWashingGreenmarketing:astrategythatinvolvesthedevelopmentandpromotionofenvironmentallyfriendlyproductsandafocusonthisattributewhenthemanufacturercommunicateswithcustomersGreenwashing:companiesmakefalseorexaggeratedclaimsabouthowenvironmentallyfriendlytheirproductsareAirinumisonecompanythatistappingintoadesireforfunctionalyetstylishprotectivewearasconcernsgrowabouttheeffectsofairpollutiononconsumers’healthTheS
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T:ChangingConsumerBehaviorfortheBetterTheS
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Tframeworksumsuptheactionsmarketersneedtopromoteprosocialbehaviorbyidentifyingfivekeydrivers:SocialInfluence–UsesocialpressureandnormstoencouragebehaviorHabits–EncourageformationofprosocialhabitsIndividualSelf–Appealtoidentity,self-interest,andpersonalitytraitsFeelingsandCognition–EmploydifferentframesandemotionalappealsintheappropriatesituationsandcontextsTangibility–Makeclearwhattheprosocialbehavioraccomplishes(e.g.,whobenefits,self-efficacy)The“Tree-Huggers”ItistypicaltofindthatasmallnumberofconsumersaccountforalargeamountoftheactionwithregardtoconsumptionactivityorpurchaseThisadunderscoresthegrowingpriorityconsumersplaceuponorganicfoodsL
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SMarketSectorsMarketerspointtoasegmentofconsumerswhoarelikelytoc
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