Chapters 4-5 MKT 3300
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Date Created: 09/20/15
Ch 4Ethical and Social Responsibility in Marketing Thursday September 1Q 2 1S 1124 AM Ethical vs Legal 0 Ethics are the moral principles and values that govern the actions and decisions of an individual or group 0 Laws are society39s values and standards that are enforceable in the courts Legality Illegal Legal Ethicality Ethical Unethical Online advertising and marketing 0 Marketing firms and website place quotcookiesquot on computers following users around the internet and then selling that browsing history to advertisers to pitch product 0 37 billion in 2012 0 Privacy concerns I quotdonottrackquot protocol I Response from industry III quotAd choicequot icon that appears on internet ads Societal culture and norms Business culture and Personal moral industry practices philosophy and ethical behavior I I Corporate culture and expectations Societal culture and norms 0 Culture 0 Set of values ideas and attitudes that are learned and shared among the members of a group 0 Dictates what is morally right and just 0 Societal values and attitudes o Are relative o Affect ethical and legal relationship Business culture ad industry practice 0 Business culture Principles of Marketing Page 1 O The effective rules of the game 0 The boundaries between competitive and unethical behavior 0 Code of conduct in business dealings 0 Ethics of exchange 0 Caveat emptor I The legal concept of quotlet the buyer bewarequot that was pervasive in the American business culture prior to the 1960s 0 the right I To safety consumer product safety commission I To be informed federal trade commission FTC I To choose III Slotting allowancesfees I To be heard I Do not call registry 0 Ethics of competition 0 Economic espionage I The clandestine collection of trade secrets or proprietary information about company39s competitors 0 Bribes and kickbacks I Transparency internationalwebsite that displays foreign country business norms corruption Corporate culture and expectations 0 Corporate culture 0 Set of values ideas and attitudes that is learned and shared among the members of an organization o A formal statement of ethical principles and rules of conduct I Contributions to government officials and political parties I Customer and supplier relation I Conflicts of interest I Accurate record keeping 0 Ethical behavior of top management and coworkers 0 Whistleblowers employees who report unethical or illegal actions of their employers 0 AMA give more elaborate description on what is ethical Personal Moral Philosophy and ethics 0 Moral idealism o A personal moral philosophy that considers certain individual rights or duties as universal regardless of the outcome 0 Utilitarianism O A personal moral philosophy that focuses on the quotgreatest good for the greatest numberquot by assessing the costs and benefits of the consequences of ethical behavior 0 Social responsibility the idea that organizations are part of a larger society and are accountable to that society for their actions 0 Profit responsibility I To maximize profits for their owners or stockholders 0 Stakeholder responsibility I The obligation an organization has to those who can affect achievement of its objectives including consumers employees suppliers and distributors O Societal responsibility Principles of Marketing Page 2 I The obligations that organizations have 1 to the preservation of the ecological environment and 2 to the general public Societal Responsibility Public interest groups Ecological environment General public 000 Stakeholder Responsibility b Suppliers gt Distributors b Employees b Consumers Profit Responsibility Owners Stockholders 0 Triple bottom line 0 The recognition of the need for organizations to improve the state of people the planet and wit simultaneously if they are to achieve sustainable longterm growth 0 Green marketing 0 Consists of marketing efforts to produce promote and reclaim environmentally sensitive products 0 Cause marketing 0 Occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products The social audit 0 Social audit consists of a systematic assessment of a firm39s objectives strategies and performance in terms of social responsibility 0 Sustainable development consists of conducting business in a way that protects the natural environment while making economic progress Consumer ethics and social responsibility 0 Unethical practices by consumers o Underlying motivations I Ex Feel like they can get away with it thrill money no consequences 0 Consumer purchase use and disposition of environmentally sensitive products 0 Greenwashing I Making an unsubstantiated or misleading claim about the environmental benefits of a product service technology or company practice 0 FTC guidelines Principles of Marketing Page 3 Ch 5 Consumer Buyer Behavior Tuesday Septem ber 150 2 15 1116 AM Marketing mix Buyer39s black box Buyer39s response stimuli Psychological 0 Perception 0 Motivation What is purchased Product 0 Price When timing 0 Promotions Personal39ty How much 0 Advertising For what use Place Demographics Environmental 0 Family 0 Culture Problem Recognition Information search Alternative evaluation Purchase decision Postpurchase behavior Perceiving a need Seeking value Assessing value Buying value 6 Consumingusing value Need Information Evaluation of Purchase Postpurchase Recognition Search alternative decision behavior l l High Involvement eg laptop PC Need Purchase Postpurchase Recognition 7 decision behavior l l Low Involvement eg toothpaste 0 Lowinvolvement purchase behavior when the consumer doesn39t think much about it 0 What makes choosing a product a lowinvolvement 0 23 of population Principles of Marketing Page 4 Types of lowinvolvement behavior and their product strategies 0 Variety seeking no particular pattern randomly trying different productsbrands 0 Increase number of productsbrands multipacks 0 Ex gum ice cream flavors candy detergent yogurt flavors 0 Example pattern ABCBCBABACBBCABCBABCACACCCBBA I Loyal behavior occasionally try different brands but mostly loyal to one brand that satisfies them the most usuallyjust one brand 0 Get customers early 0 Branding effects significant 0 Ex coffee restaurants 0 Example pattern AAAAAAAAABAAAAAACAAAAAA I Habitual buyer try different brands and stick with them for a period of time then switch and stick to that product for a while and so on might be affected by price and availability 0 Induce trial promotion pointofsale coupons 0 Make consumers more aware of their behavior 0 Ex toilet paper perfume chips 0 Example pattern AAAAAAABBBBBBBBCCCCCCCC 0 Important considerations 0 Complex buying behavior I Significant difference between brands I Learning process involved III Make a purchase with little to no regret III Based on previous experiences and recommendations 0 Dissonance reducing behavior I Dissonance regret of purchase displeased unpleasant I Few differences between brands I Expensive infrequent or risky purchase III Reliance on quotexpertsquot 9 Ex mechanic doctor IT person real estate agent Marketing strategies for high involvement products 0 Complex buying behavior 0 Differentiate your product attributes o Affect consumers39 perceptions I Dissonance reducing behavior 0 Sell through quality institutions 0 Generate good reviews eg consumer reports 0 Price 0 Aftersale communications reduce postpurchase dissonance 1 Needwant recognition 0 Can needs andor wants change 0 Monitor trends 0 Can marketing influence needswants 0 Make sure the right qualities of your product are noticed eg lotion sexy vs protective 2 Information search 0 How to inform consumers o Depends on what they know existence features benefits etc 0 Internal search 0 External search I Personal sources I Public sources I Marketerdominated sources 3 Evaluation of alternatives 0 Consideration set 0 Products are bundles of attributes I What are the relevant attributes to characterize and compare products I How good is each brand in each relevant attribute I How important is each relevant attribute for the final decision III Different integration approaches 4 Purchase decision 0 Purchase intension purchase decision 0 Influences family friends other situational factors 0 Dissonance reducing behavior I What if situation is still confusing Principles of Marketing Page 5 5 Postpurchase behavior 0 Postpurchase evaluation Wordof mouth Dissonance amp dissonance reducing behavior Followup important call survey adv Customer satisfaction studies I Satisfied customers tell 3 people I Dissatisfied customers tell 9 people I Cognitive Dissonance o Compensatory rule 0 Look at all options and features and then choose Coniunctive rule 0 Best of the best 0 Disiunctive rule 0 Has at least one good feature and is functional 0 Lexicographic rule 0 Looked for the best in the feature you desire and rest of the functions are basic Affect referral rule 0 Based on brand39s credibility OOOO Multiattribute model compensatory O O ak attitude of product k measure of attractiveness 0 Bi weight or importance of each attribute i O xik perception that product k possesses the attribute i on consumer behavior 0 Perception o Selective perception I Selective exposure I Selective comprehension I Selective retention 0 Subliminal perception I Unconsciously seeing and hearing promotions 0 Strategies to reduce perceived risk 0 Obtain seals of approval 0 Secure endorsements 0 Provide free trialssamples 0 Give extensive instructions 0 Provide warrantiesguarantees on consumer behavior 0 Opinion leaders 0 Ex YouTube stars celebrities quotexpertsquot I Influences following audience I Multiplies prospective audience I How do you identify III Internet trends III Leaders on social media 0 Word of mouth 0 75 offline conversation o 15 on phone 0 10 online 0 Buzz I Ex BzzAgent I Influences purchases III spreads personal reviews on products III People trust opinions of quotfriendsquot when viewing a product 0 Reference Groups 0 Associative group group you belong to I Brand community I Creates peer pressure 0 Aspiration group I A group you want to join I Idols celebrities lead influences III Persuade followers to get certain products Principles of Marketing Page 6 O Dissociative group I Group you want to stay away from I Bad mediarepresentation III Gives negative images to products I Pay to stay away from III Ex Jersey Shore and Abercrombie 0 Family decisionmaking 0 Styles I Spousedominant III Parentsspouses decide I Joint III Whole family involved 0 Family member roles I Information gatherer I Influencer I Decision maker I Purchaser I User Principles of Marketing Page 7