The Political–Social and Cultural Environments

The Political and Social Environment

Marketing decisions are strongly affected by developments in the political environment. The political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.

Legislation Regulating Business

Even the strongest advocates of free-market economies agree that the system works best with at least some regulation. Well-conceived regulation can encourage competition and ensure fair markets for goods and services. Thus, governments develop public policy to guide commerce—sets of laws and regulations that limit business for the good of society as a whole. Almost every marketing activity is subject to a wide range of laws and regulations.

Legislation affecting business around the world has increased steadily over the years. The United States and many other countries have many laws covering issues such as competition, fair-trade practices, environmental protection, product safety, truth in advertising, ­consumer privacy, packaging and labeling, pricing, and other important areas (see Table 3.1).

A red circle icon. Table 3.1

Major U.S. Legislation Affecting Marketing

A table lists major U.S. legislations affecting marketing.

Understanding the public policy implications of a particular marketing activity is not a simple matter. In the United States, there are many laws created at the national, state, and local levels, and these regulations often overlap. For example, aspirin products sold in Dallas are governed by both federal labeling laws and Texas state advertising laws. Moreover, regulations are constantly changing; what was allowed last year may now be prohibited, and what was prohibited may now be allowed. Marketers must work hard to keep up with changes in regulations and their interpretations.

Business legislation has been enacted for a number of reasons. The first is to protect companies from each other. Although business executives may praise competition, they sometimes try to neutralize it when it threatens them. Therefore, laws are passed to define and prevent unfair competition. In the United States, such laws are enforced by the Federal Trade Commission (FTC) and the Antitrust Division of the Attorney General’s office.

The second purpose of government regulation is to protect consumers from unfair business practices. Some firms, if left alone, would make shoddy products, invade consumer privacy, mislead consumers in their advertising, and deceive consumers through their packaging and pricing. Rules defining and regulating unfair business practices are enforced by various agencies.

The third purpose of government regulation is to protect the interests of society against unrestrained business behavior. Profitable business activity does not always create a better quality of life. Regulation arises to ensure that firms take responsibility for the social costs of their production or products.

International marketers will encounter dozens, or even hundreds, of agencies set up to enforce trade policies and regulations. In the United States, Congress has established federal regulatory agencies, such as the FTC, the FDA, the Federal Communications Commission, the Federal Energy Regulatory Commission, the Federal Aviation Administration, the Consumer Product Safety Commission, the Environmental Protection Agency, and hundreds of others. Because such government agencies have some discretion in enforcing the laws, they can have a major impact on a company’s marketing performance.

New laws and their enforcement will continue to increase. Business executives must watch these developments when planning their products and marketing programs. Marketers need to know about the major laws protecting competition, consumers, and society. They need to understand these laws at the local, state, national, and international levels.

Increased Emphasis on Ethics and Socially Responsible Actions

Written regulations cannot possibly cover all potential marketing abuses, and existing laws are often difficult to enforce. However, beyond written laws and regulations, business is also governed by social codes and rules of professional ethics.

Socially Responsible Behavior

Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply “do the right thing.” These socially responsible firms actively seek out ways to protect the long-run interests of their consumers and the environment.

Almost every aspect of marketing involves ethics and social responsibility issues. Unfortunately, because these issues usually involve conflicting interests, well-meaning people can honestly disagree about the right course of action in a given situation. Thus, many industrial and professional trade associations have suggested codes of ethics. And more companies are now developing policies, guidelines, and other responses to complex social responsibility issues.

The boom in online, mobile, and social media marketing has created a new set of social and ethical issues. Critics worry most about online privacy issues. There has been an explosion in the amount of personal digital data available. Users themselves supply some of it. They voluntarily place highly private information on social media sites, such as Facebook or LinkedIn, or on genealogy sites that are easily searched by anyone with a computer or a smartphone.

However, much of the information is systematically developed by businesses seeking to learn more about their customers, often without consumers realizing that they are under the microscope. Legitimate businesses track consumers’ online browsing and buying behavior and collect, analyze, and share digital data from every move consumers make at their online sites. Critics worry that these companies may now know too much and might use digital data to take unfair advantage of consumers. Although most companies fully disclose their internet privacy policies and most try to use data to benefit their customers, abuses do occur. As a result, consumer advocates and policy makers are taking action to protect consumer privacy. In Chapters 4 and 20, we discuss these and other societal marketing issues in greater depth.

Cause-Related Marketing

To exercise their social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes. These days, every product seems to be tied to some cause. For example, the P&G “Tide Loads of Hope” program provides mobile laundromats and loads of clean laundry to families in disaster-stricken areas—P&G washes, dries, and folds clothes for these families for free. Shake Shack runs an annual Great American Shake Sale: If you donate at least $2 at the register to Share Our Strength’s No Kid Hungry program dedicated to ending child hunger in America, you get a $5 shake free on your next visit. A blue circle icon. And AT&T joined forces with competitors Verizon, Sprint, and T-Mobile to spearhead the “It Can Wait” campaign, which addresses the texting-while-driving epidemic by urging people of all ages to take the pledge to never text and drive. The campaign’s cause-related message: “No text is worth the risk. It can wait.”41

An AT&T's advertisement shows an open palm signifying STOP. Across the palm, there is the text “it can wait” along with AT&T's logo.

AT&T's advertisement shows an open palm signifying STOP. Across the palm, there is the text "it can wait" along with AT&T's logo. Cause-related marketing: AT&T joined forces with competitors Verizon, Sprint, and T-Mobile to spearhead the “It Can Wait” campaign, which urges people of all ages to take the pledge to never text and drive.

Courtesy of AT&T Intellectual Property. Used with permission.

Some companies are founded on cause-related missions. Under the concept of ­“values-led business” or “caring capitalism,” their mission is to use business to make the world a better place. For example, Warby Parker—the online marketer of low-priced prescription eyewear—was founded with the hope of bringing affordable eyewear to the masses. The company sells “eyewear with a purpose.” For every pair of glasses Warby Parker sells, it distributes a free pair to someone in need. The company also works with not-for-profit organizations that train low-income entrepreneurs to sell affordable glasses. “We believe that everyone has the right to see,” says the company.42

Cause-related marketing has become a primary form of corporate giving. It lets companies “do well by doing good” by linking purchases of the company’s products or services with benefiting worthwhile causes or charitable organizations. Beyond being socially admirable, Warby Parker’s Buy a Pair, Give a Pair program also makes good economic sense, for both the company and its customers. “Companies can do good in the world while still being profitable,” says Warby Parker co-founder Neil Blumenthal. “A single pair of reading glasses causes, on average, a 20 percent increase in income. Glasses are one of the most effective poverty alleviation tools in the world.”43

Cause-related marketing has also stirred some controversy. Critics worry that ­cause-related marketing is more a strategy for selling than a strategy for giving—that “cause-related” marketing is really “cause-exploitative” marketing. Thus, companies using cause-related marketing might find themselves walking a fine line between increased sales and an improved image and facing charges of exploitation. However, if handled well, cause-related marketing can greatly benefit both the company and the cause. The company gains an effective marketing tool while building a more positive public image. The charitable organization or cause gains greater visibility and important new sources of funding and support. Spending on cause-related marketing in the United States skyrocketed from only $120 million in 1990 to $2 billion in 2016.44

The Cultural Environment

The cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors. People grow up in a particular society that shapes their basic beliefs and values. They absorb a worldview that defines their relationships with others. The following cultural characteristics can affect marketing decision making.

The Persistence of Cultural Values

People in a given society hold many beliefs and values. Their core beliefs and values have a high degree of persistence. For example, most Americans believe in individual freedom, hard work, getting married, and achievement and success. These beliefs shape more specific attitudes and behaviors found in everyday life. Core beliefs and values are passed on from parents to children and are reinforced by schools, businesses, religious institutions, and government.

Secondary beliefs and values are more open to change. Believing in marriage is a core belief; believing that people should get married early in life is a secondary belief. Marketers have some chance of changing secondary values but little chance of changing core values. For example, family-planning marketers could argue more effectively that people should get married later than not get married at all.

Shifts in Secondary Cultural Values

Although core values are fairly persistent, cultural swings do take place. Consider the impact of popular music groups, movie personalities, and other celebrities on young people’s hairstyle and clothing norms. Marketers want to predict cultural shifts to spot new opportunities or threats. The major cultural values of a society are expressed in people’s views of themselves and others as well as in their views of organizations, society, nature, and the universe.

People’s Views of Themselves

People vary in their emphasis on serving themselves versus serving others. Some people seek personal pleasure, wanting fun, change, and escape. Others seek self-realization through religion, recreation, or the avid pursuit of careers or other life goals. Some people see themselves as sharers and joiners; others see themselves as individualists. People use products, brands, and services as a means of self-expression, and they buy products and services that match their views of themselves.

Marketers can position their brands to appeal to specific self-view segments. For example, consider Sperry, maker of storied Sperry Top-Sider boat shoes:45

Sperry first introduced its iconic Top-Sider shoes in 1935 as the perfect non-slip boat shoe for rough seas and slippery decks. That nautical legacy remains an important part of Sperry’s positioning. The brand’s recent “Odysseys Await” marketing campaign confirms that the sure-footed shoes are built for adventurous soles who can’t stay put. The campaign targets “intrepid consumers”—active millennials who view themselves as adventurous, authentic, bold, and creative. “There’s a certain section of Millennials that really look at life as an opportunity,” says a Sperry marketer. They “want to have meaningful experiences and align with brands that provide opportunities for such.” The “Odysseys Await” campaign reconnects the brand with the sea, featuring intrepid consumers having nautical adventures, jumping off boats, sailing, and diving off cliffs. Headlines such as “The best stories are written with your feet,” “Keep your laces tight and your plans loose,” “Try living for a living,” and “If Earth has an edge, find it” suggest that Sperry Top-Siders are more than just shoes. They are the embodiment of customers’ self-views and lifestyles.

People’s Views of Others

People’s attitudes toward and interactions with others shift over time. In recent years, some analysts have voiced concerns that the digital age would result in diminished human interaction, as people buried themselves in social media pages or emailed and texted rather than interacting personally. Instead, today’s digital technologies seem to have launched an era of what one trend watcher calls “mass mingling.” Rather than interacting less, people are using social media and mobile communications to connect more than ever. Basically, the more people meet, network, text, and socialize online, the more likely they are to eventually meet up with friends and followers in the real world.

However, these days, even when people are together, they are often "alone together." A blue circle icon. Groups of people may sit or walk in their own little bubbles, intensely connected to tiny screens and keyboards. One expert describes the latest communication skill as “maintaining eye contact with someone while you text someone else; it’s hard but it can be done,” she says. “Technology-enabled, we are able to be with one another, and also ‘elsewhere,’ connected to wherever we want to be.”46 Thus, whether the new technology-driven communication is a blessing or a curse is a matter of much debate.

A photo shows a group of youngsters of both sexes sitting around a table at a restaurant. All of them are busy using their smartphones.

Photo shows a group of youngsters of both sexes sitting around a table at a restaurant. All of them are busy using their smartphones. People’s views of others: Today’s digital technologies have launched a new era of mass mingling. However, even when people are together, they are often “alone together”—immersed in their own little bubbles, intensely connected to tiny screens and keyboards.

Dmitriy Shironosov/123RF

This new way of interacting strongly affects how companies market their brands and communicate with customers. Consumers increasingly tap digitally into networks of friends and online brand communities to learn about and buy products and to shape and share brand experiences. As a result, it is important for brands to participate in these networks too.

People’s Views of Organizations

People vary in their attitudes toward corporations, government agencies, trade unions, universities, and other organizations. By and large, people are willing to work for major organizations and expect them, in turn, to carry out society’s work.

The past two decades have seen a sharp decrease in confidence in and loyalty toward America’s business and political organizations and institutions. In the workplace, there has been an overall decline in organizational loyalty. Waves of company downsizings bred cynicism and distrust. In just the past decade, major corporate scandals, rounds of layoffs resulting from the Great Recession, the financial meltdown triggered by Wall Street bankers’ greed and incompetence, and other unsettling activities have resulted in a further loss of confidence in big business. Many people today see work not as a source of satisfaction but as a required chore to earn money to enjoy their nonwork hours. This trend suggests that organizations need to find new ways to win consumer and employee confidence.

People’s Views of Society

People vary in their attitudes toward their society—patriots defend it, reformers want to change it, and malcontents want to leave it. People’s orientation to their society influences their consumption patterns and attitudes toward the marketplace.

American patriotism has been increasing gradually for the past two decades. One annual consumer survey shows that some brands are highly associated with patriotism, such as Jeep, Coca-Cola, Disney, Levi Strauss, Harley-Davidson, Gillette, and Apple. Marketers respond with renewed “Made in America” pitches and ads with patriotic themes. For example, last summer Coca-Cola launched a limited-edition red, white, and blue flag can surrounding the July 4 holiday with the patriotic song lyric “I’m proud to be an American” on the label. Apple recently kicked off a $100 million “Made in America” push with the introduction of a new high-end Mac Pro personal computer. The Mac Pro, “the most powerful Mac ever,” is built in Austin, Texas, with components made domestically. And Jeep’s recent patriotic “Portraits” Super Bowl ad—which featured famous and ordinary faces of Americans who’ve driven Jeeps through 75 years of wars, peace, boom times, and bust—resonated strongly with Americans. “We don’t make Jeep,” concludes the ad, “you do.”47

Although most such marketing efforts are tasteful and well received, waving the red, white, and blue can sometimes prove tricky. Flag-waving promotions can be viewed as corny or as token attempts to cash in on the nation’s emotions. For example, some critics note that, so far, Apple’s “Made in America” push hasn’t had much real impact. The Mac Pro contributes less than 1 percent of Apple’s total revenues. More than 70 percent of the company’s revenues come from its iPhone and iPad products, both built in China. Marketers must take care when appealing to patriotism and other strong national emotions.

People’s Views of Nature

People vary in their attitudes toward the natural world—some feel ruled by it, others feel in harmony with it, and still others seek to master it. A long-term trend has been people’s growing mastery over nature through technology and the belief that nature is bountiful. More recently, however, people have recognized that nature is finite and fragile; it can be destroyed or spoiled by human activities.

This renewed love of things natural has created a sizable market of consumers who seek out everything from natural, organic, and nutritional products to fuel-efficient cars and alternative medicines. These consumers make up a sizable and growing market. For example, food producers have also found fast-growing markets for natural and organic products. In total, the U.S. organic/natural food market now generates $45 billion in annual retail sales and will grow to an estimated $200 billion by 2019.48

Annie’s Homegrown, a General Mills company, caters to this market with sustainable, all-natural food products—from mac and cheese to pizzas, pastas, snacks, and salad dressings—made and sold in a sustainable way:49

A screenshot shows Annie's home page.

A blue circle icon. Riding the trend toward all things natural: Annie’s is out to create a happier and healthier world with nourishing foods and responsible conduct that is “forever kind to the planet.”

General Mills Marketing, Inc.

A blue circle icon. Annie’s is out to create a happier and healthier world with nourishing foods and responsible conduct that is “forever kind to the planet.” Annie’s products are made from simple, natural ingredients grown by its farm partners. The products contain “no artificial anything,” says the company. “If it’s not real, it’s not Annie’s.” The company works closely with its food supply-system partners to jointly raise the bar for sustainability and organics. Annie’s also makes sustainable practices a top priority with its packaging—more than 90 percent of Annie’s packaging by weight is recyclable. Finally, Annie’s gives back to the community through programs such as sustainable agriculture scholarships, school garden programs, and support for like-minded organizations dedicated to making the planet a better place to live and eat.

People’s Views of the Universe

Finally, people vary in their beliefs about the origins of the universe and their place in it. Although most Americans practice religion, religious conviction and practice have been dropping off gradually through the years. According to a recent poll, 22 percent of Americans now say they are not affiliated with any particular faith, up from about 17 percent just seven years prior. Among Americans ages 18 to 29, more than one-third say they are not currently affiliated with any particular religion.50

However, the fact that people are dropping out of organized religion doesn’t mean that they are abandoning their faith. Some futurists have noted a renewed interest in spirituality, perhaps as a part of a broader search for a new inner purpose. People have been moving away from materialism and dog-eat-dog ambition to seek more permanent values—family, community, earth, faith—and a more certain grasp of right and wrong. Rather than calling it “religion,” they call it “spirituality.” One recent survey found that whereas Americans have become less religious in recent years, the share of people who feel a deep sense of “spiritual peace and well-being” as well as a deep sense of “wonder about the universe” has risen.51 This changing spiritualism affects consumers in everything from the television shows they watch and the books they read to the products and services they buy.

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