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Chapter 3

COMM 223 Chapter 3: COMM 223 Chapter 3
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Department
Commerce
Course
COMM 223
Professor
Bonnie Feigenbaum
Semester
Winter

Description
Comm 223 chapter 3 notes Sustainable marketing, social responsibility, and ethics Sustainable marketing Sustainable marketing: socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs Marketing concept: recognizes that organizations thrive from day to day by determining the current needs and wants of target-group customers and fulfilling those needs and wants more effectively and efficiently than competitors do Societal marketing concept: considers the future welfare of consumers Strategic planning concept: considers future company needs Sustainable marketing: considers both future welfare of customers and future company needs. It also calls for socially and environmentally responsible actions that meet both the immediate and future needs of customers and the company. Social criticisms of marketing Marketing’s impact on consumers High prices Many critics charge that the marketing system causes prices to be higher than they would be under more “sensible” systems: - High cost of distribution: Too many middlemen, that they are inefficient and provide duplicate or unnecessary services. As a result, distribution costs too much, and consumers pay for these excessive costs - High advertising and promotion costs: pushing up prices to finance heavy advertising and sales promotion. Critics charge that much of the packaging and promotion adds only psychological value to the product rather than functional value. Marketers respond to this: o advertising adds value by informing potential buyers of the availability and merits of a product (they give buyers the assurance of consistent quality) o advertising and promotion are necessary when there is competitors o without advertising, sales would decrease, production would decrease, price to manufacturers each product goes up, and prices would increase - excessive markups: marketers respond that the reason for these markups are to cover the costs of purchasing, promoting, and distributing existing medicines, plus the high R&D costs of formulating and testing new medicine Comm 223 chapter 3 notes Deceptive practices Companies use deceptive practices that lead customers to believe they will get more value than they actually do. - Deceptive pricing: falsely advertising “factory” or “wholesale” prices or large price reduction from a phony high retail list price - Deceptive promotion: misrepresenting the product’s features or performance or luring customers to the store for a bargain that is out of stock - Deceptive packaging: exaggerating package contents through subtle design, using misleading labelling, or describing size in misleading terms In Canada, the Competition Bureau acts as a watchdog to prevent such practices. Greenwashing: companies that claim to be environmentally friendly in some way but aren’t really doing what they claim to be doing High pressure selling Salespeople use high-pressure selling that persuade people to buy goods they had no intention of buying. Shoddy, harmful, unsafe products Products have poor quality, provide little benefit, and can be harmful. Most manufacturers want to produce quality goods, but problems with safety and quality do happen, and the way a company deals with them can damage or help their reputation. With the ubiquity of social media, once a problem is discovered it is quickly made public Planned obsolescence Planned obsolescence: causing products to become obsolete before they should actually need replacement: - Using inferior materials and components - Continuous changing of acceptable styles - Delaying features until follow-up version Perceived obsolescence: continually changing consumer concepts of acceptable styles to encourage more and earlier buying Marketers respond that consumers like style changes or want the latest high-tech innovations, that no one has to buy a new product. Most companies do not design their products to break down earlier, since they don’t want to lose customers to other brands. Instead, they seek constant improvement to ensure that products will consistently meet or exceed customer expectations Marketing’s impact on society as a whole False wants and too much materialism Overconsumption Marketers respond by saying: - Such criticisms overstate the power of business to create needs. People have strong defenses against advertising and other marketing tools Comm 223 chapter 3 notes - Marketers are most effective when they appeal to existing wants rather than when they attempt to create new ones - People seek information when making important purchases and do not rely on a single source. - The high failure rate of new products shows that companies are not able to control demand - Our wants and values are influenced by family, peers, cultural background… if we are highly materialistic, these values arose out of basic socialization processes that go much deeper than what business and mass media could produce alone - New age is more sensible consumption Too few social goods Business has been accused of overselling private goods at the expense of public goods (as private goods increase, they require more public services that are usually not forthcoming.) the overselling of private goods result in “social costs” (congestion in traffic, gasoline shortage, air pollution) Solution: - Make producers bear the full social cost or their operations - Make consumers pay the social costs Cultural pollution Our senses are being constantly assaulted by marketing and advertising. Consumer concerns about too many commercial messages have increased. Marketers must proceed with caution when devising strategies for advertising and promotion campaigns, to avoid consumers to become resentful Marketers respond to charges of “pollution” by attempting to target their communications as much as possible. One approach, especially in online marketing, is the trend toward blurring the distinction between advertising and the surrounding content using techniques such as: - Branded entertainment - Native advertising: uninterrupted delivery of content produced by or in collaboration with a brand Marketing’s impact on other businesses Marketing practices can harm other companies and reduce competition by: - Acquisition and shrinking of competitors rather than developing their own ne
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