1 Chapter 3 Instructor Shan A. Garib, Fall 2012. Corporate Social Responsibility: a business’s concern for society’s welfare -reflects consideration of.
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Chapter 3 Instructor Shan A. Garib, Fall 2012
Corporate Social Responsibility: a business’s concern for society’s welfare-reflects consideration of long-term interest of both company and it’s relationship to society-simmilar to market oriented firms but with a larger focus-business needs rich people to buy their goods/services so need to help to poor
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Four Components of Total Corporate Social Responsibility:
1.Economic2.Legal3.Ethical4.Philanthropic
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Ethics: Moral principles and values that direct behaviour
-personally held
Morals: rules people develop as a result of cultural values of norms
-characterized as good or badeg. Selling to disadvantaged customer
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Morality and Business Ethics
-The values of business people have been acquired through family, education and religion
-To develop a personal set of ethics:-evaluate the consequance of a
particular act -stress importance of rules
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Morality and Business Ethics
-To develop a personal set of ethics:-evaluate the consequance of a
particular act -stress importance of rules, laws
-develop moral character through:1. preconventional morality2. conventional morality3. postconventional morality
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Ethical Decision Making is influenced by:
1.Extent of ethical problems in the organization
2.Top management ethics3.Potential magnitude of consequences4.Social consensus5.Probability of a harmful outcome6.Length of time to consequences7.Number of people affected
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(Code of) Ethical Guidelines to help managers make better decisions
Advantages:1. Employees see what their firm thinks is acceptable 2. Effective internal control on behaviour as opposed to external like the government3. Avoid confusion
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Understanding the External Environment
-Managers must constantly change the marketign mix (4P’s) to reflect the ever changing environment
-This is doen through “environmental scanning”
-Goal: identify future opportunities and threats!!
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Environmental Management: sometimes the company can impliment strategies that influence the environment
-done through lobbying-environmental factors include:
-social-demo-economic-tech-political, legal
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-Hardest to infulence and change
-they influence what you buy, prices paid...
-examples are: consumer attitudes, values and lifestyles
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Market-oriented ValuesValue: a strongly held belief, determines what is important and not importantFour values influencing our lifestyles and attitudes:
1. self-sufficiency – stand on own feet2. upward mobility – work hard, you get it3. work ethic – hard work is moral and right4. conformity – noone should expect to be
treated differnetly from anyone else
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Values influence our buying habits.-consumers insist on hogh quality products-ranking characteristics of product quality:
1. reliability2. durability3. easy maintenance4. ease of use5. a trusted brand name6. a low price
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The growth of component lifestyles-choosing products and services that meet diverse needs and interestsEg. Banker/biker
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The changing role of families and working women
Duel incomes means greater purchasing power!
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Demography: study of people’s vital statisitcs-strongly related to consumer behaviour-each age froup has own tastes and biases
Tweens: 9-14Generation Y: 79-94, tech, clothes
-diverse-savvy-impatient
Gen X: 66-78-spending varied, 40 are money making years
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Demography: study of people’s vital statisitcs-strongly related to consumer behaviour-each age froup has own tastes and biases
Gen X: 66-78-spending varied-40’s are money making years
Boomers: 47-65-largest segment-biggest spenders-brand hop
50% of population now in larger cities
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Ethnic and Cultural Diversity
Multiculturalism: major ethnic groups in an area are equally represented
-mostly in larger urban areas-cmopanies change their marketing
programmes to relfect this change eg. CIBC, hospitals
-25% of visible minority population is under 14, and will be able to converse in multiple languages
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Three areas of concern for marketers:
1. consumers’ incomes
2. inflation
3. recession
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Three areas of concern for marketers:
1. consumers’ incomes
2. inflation
3. recession
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Three areas of concern for marketers:
1. consumers’ incomes-median income for a family is 58k CAD-education primary determinant of
earnign potential-Income, willingness to buy, ability to buy
determines target marketeg. dollar store in lower income
neighbourhoods
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Three areas of concern for marketers:
1a. consumers’ incomes-credit cards allow lower and middle income
earners to live like the rich
1b. purchasing power: comparing income to cost of things
-or, income minus cost of livingeg. Prices in Nova Scotia 3x less than in
Toronto. If make the same as worker in Toronto then can afford more
-more disrectionary income
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Three areas of concern for marketers:
2. inflation: decrease in value of money or, increase in prices
eg. Choc bar $1 then goes up to $1.05 inflation rate is 5%
-if salary raises are 5% then same purchasing power before the change as after
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Three areas of concern for marketers:
3. Recession: negative frowth in economy for 6months+
-reduction in demand for goods/services-different marketing approach:
1. improve products, or new ones2. expand customer service3. emphasize top of the line and
promote product value
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External technology important to marketing managers:
1. by acquiring technology, more efficient operation or create a better product
2. new technology may render existing technology obsolete eg. Camera film
-staying technologically relevant means managers need to do research and adopt new technologies
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Staying technologically relevant means managers need to do research and adopt new technologies
Research: expand knowledge, confirm exisiting theory
Applied research: develop new or improved products
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Federal Legislation affecting how business is conducted is administered through the competition bureau
-enforces laws covering: bankruptcy, trade practices, competition, credit, labelling, packaging, copyrights, trademarks and patents
Provincial Laws: different laws for different provinces eg. Quebec language laws
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Self-regulation: indusrty groups that police themselves
eg. CMA developing guidelines and ethical practices
Consumer Privacy-Every firm should be able to justify the type and use of information it has-Privacy Act and Personal Information Protection and Electronic Documents Act: protect privacy of personal information for collection, use and disclosure
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The competitive environment is made up of:
1. Number of competitors
2. Size of competitors
3. Degree of interdependance
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Competition for Market Share and Profits
-As population grows, costs rise, resources limited firms have to work harder to maintain profits and market share!!!!!
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