deal with the relationship between buyer and seller, there are also instances
when the activities of marketing influence society as a whole. For example when you pur-
chase a new refrigerator, there is a need to discard your old refrigerator. Thrown in a trash
the old refrigerator may pose a safety risk, or contaminate the
and certainly
will contaminate the aesthetics of the countryside, thus requiring society to bear part of the
cost of your purchase. This example illustrates
issue of social responsibility, the idea
are part of a larger society and are accountable to society for their actions.
The well-being of
at large should also be recognized in an organization's market-
ing decisions. In fact, some marketing experts stress the societal marketing concept, the view [hat an organization should discover and satisfy the needs of its consumers in a way
also provides for society's
A definition
social marketing is provided by
Alan Andreasen:
Social marketing is the adaptation of commercial marketing technologies to p rograms designed to influence the voluntary behavior of target audiences to improve their per-welfare and that of the society of which they are a part. 5
There is little doubt that the importance of social marketing is growing, and that for many
marketers, it will become part of their competitive advantage.
Economic/Political Issues
Various economic forces infiuence an organization's ability to compete and consumer's will-
ingness and ability to
products and services.
state of the economy is always chang-
ing . Interest rates rise and fall. Inflation increases and decreases. Consumers' ability and
willingness to buy changes. The economy goes through fluctuations. Two aspects of the
economy are consumer's buying power and the
cycle.
TABLE 5.3
Ethical Issues in Marketing
Percent of
Marketing
Professionals
Issue
Responding
Bribery
Gifts from outside vendors,
of questionable commissions, "money
under the table "
15%
Fairness
Unfairly placing company interests over family obli gations, taking credit for the work
of others, inducing customers to use services not needed, manipulation of others
14%
Honesty
Lying to customers to obtain orders, misrepresenting services and capabilities
12%
Price
Differential pricing, charging higher prices than firms with similar products while
superiority, meeting competitive prices
12%
Product
Product safety, product and brand infringement, exaggerated performance claims,
products that do not benefit consu mers
11%
Personnel
Firing , hiring , employee evaluation
10%
Confidentiality
Temptations to use or obtain classified , secret, or competitive information
5%
Advertising
Crossing the line between exaggeration and misrepresentation, misleading customers
4%
Manipulation of Data
Falsifying figures or misusing statistics or information, distortion
4%
Purchasing
Reciprocity in the selection of suppliers
3%
Marketing professionals were asked to descri be the most difficult ethical issue the y fa ce.
Source: Lawrence B. Chonko and Shelby D. Hunt, " Ethi cs and Marketing Management: An Emp irical Exam ination :' Journal of Business Research, Vol. 13, 1985, pp. 339-359.
EXTERNAL FACTORS THAT AFFECT PLANNING
111
Consumer Buying Power
A consumer's buying power represents hislher ability to make purchases. The economy affects
buying power. For example, if prices decline, consumers have greater buying power. If the
value of the dollar increases relative to foreign currency, consumers have greater buying
power. When inflation occurs, consumers have less buying power. A list of several aspects
of consumer buying power is presented
Each can be measured relative to a marketer's
external environment.
• Buying power: A consumer's ability to make purchases.
• Income: The amount of money an individual receives from wages, rents, invest-
ments, pensions, and/or subsidies.
• Disposable income: The income available for spending after taxes have been paid.
• Discretionary income: Disposable income available for spending or saving after basic
necessities (e.g., food, housing, clothing) have been purchased.
• Credit: An individual's ability to buy something now and pay for it later.
• Wealth: The accumulation of past income and other assets including savings accounts,
jewelry, investments, real estate, and the :ike.
• Willingness to spend: An individual's choice of how much disposable income to
spend and what to spend it on.
o
Consumer spending patterns: Amount of money spent on certain kinds of products
and services each year.
• Comprehensive spending patterns: The
of income individuals allocate to
expenditures for classes of products and services.
• Product spending patterns: The amount of income spent for specific products in a
product class.
Several of these concepts are illustrated in the Newsline that follows.
NEWSLINE: EVERYONE SEEMS TO HAVE MONEY
It's been called mystery prosperity. The nation's economy is growing
at a rate not seen since the 1960s, unemployment and inflation are
the lowest in decades , and the stock market is setting records with
regularity. Some economists explain
good fortun e by claiming a
new economy is at work, one driven by deficit reduction , low interest
rates, and technological advances . Others point to things like the
Asian contagion and the inevitable limits of the bull market, and won-
der how long this can last (in fact it ended in 2000).
But despite market jitters, at least we can take comfort in knowing
that the economy may be more stable than many fear, if only because
consumer spending-which accounts for two-thirds of the nation's
economic output- has been considerably muted in the past decade.
Talk about unconventional wisdom. How can this be? Hasn't the
media been trumpeting America's runaway spending spree?
It's true that consumer spending has been growing, but only at the
aggregate level: the population is grOwing, the number of households
is increasing, and the baby-boom generation-the youngest of which
is now 35-has entered its peak spending years . But a close look at
trends in spending by individual households tells a different story.
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