Class 3 - January 27, 2011

This week we discussed chapter 3, Social Responsibility, Ethics, and the Marketing Environment.  There were two major things I took away from this class:

The first is about sustainability.  Sustainability is the idea that socially responsible companies will outperform their peers by focusing on the world's social problems and viewing them as opportunities to build profits and help the world at the same time. Total corporate social responsibility has four components: economic, legal, ethical, and philanthropic.   What seems to be so obvious that it gets overlooked, is that a company must be economical to be profitable.  Profitability is the foundation of the Corporate Social Responsibility pyramid.  Sometimes people try too hard to make their customers happy, that they lower their prices too low to be profitable.  If you do that too much, you won't stay in business. 

Another major part to the pyramid is ethics in business.  Ethics refers to the moral principles or values that generally govern the conduct of an individual or a group.  Morals are the rules people develop as a result of cultural values and norms.  One of the best ways to prevent future ethical problems in your company is to create a code of ethics, one that is neither too vague or too detailed.  This will help all of the employees to know what is right and wrong. 

The second major thing I took from this class was the demographic factors - the generations. 

• Tweens, ages 8 - 14.  They spend on average $39 billion annually, with their parents spending an additional $150 billion.  They tune out during commercials because they're boring.
• Generation Y, those born between 1979 - 1994.  They spend nearly $200 billion annually.  They are impatient, family -oriented, inquisitive, opinionated, ethically diverse, good time managers, street smart and connected through social networks.
• Generation X, those born between 1965 - 1978.  They are the first group of latchkey kids, from dual income homes, and half come from divorced or separated parents.  Over the past 30 years, they have earned 60% more than any other age group, but still tend to be ignored by advertising companies.
• Baby Boomers, those born between 1946 - 1964.  They are the largest demographic of today's population.  They are expected to have more than 60% continue working past retirement age.  They have more than $1 trillion spending power per year.  They are, in some cases, more willing to brand hop than younger ages.

The most important part of this chapter that I will use in my business is the ethical part.  I am going to start a human resource firm when I am done with school and you have to be ethical and honest with your clients, especially when you're dealing with their money.