BA635 Current Issues in Marketing

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The Bio Power Spheres
BA635 Current Marketing Issues
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Lecture Outline The Meta-Convergence of Spheres

• Increasing interplay between Bio Power Spheres
• The rise of consumer/citizen eco-consciousness
  environmentalism and the response of Business,
  NGOs Govt
• The Challenge of Commerce Regulation in a
  Global market
• The Collapse of Consensus

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-just as the sub-spheres of the BioSphere
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Are interdependent
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So too are the spheres of our society Wherein
Change in one sphere.
impacts all other Spheres
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That Interaction among Spheres
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Meta-convergence the tightening of connections
among spheres that have hitherto been more
independent

• "Culture, religion, politics, environment,
  ethics, are all going to interpenetrate one
  another to an extent never before seen, and they
  will, in turn, penetrate business in all sorts of
  strange new ways
• Riding the third wave A
  conversation with Alvin Toffler

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• Instead of the single "bottom line" on which most
  executives have been taught to fixate
• the third wave corporation requires multiple
  bottom lines
• social, environmental, informational, political,
  and ethical bottom lines-- all of them
  interconnected."
• Toffler, The Third Wave--1980, p.240

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Bio Power-sphere Pressures on Todays
Corporation
Power
Employment/ outsourcing

• Community/ Workplace

BIO
Corporate Psyche

• Responsibility- obligation

• Health Quality-of-life

• Responsiveness- action

• Performance- results

• Environment / Global Warming

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The 21st Century- Meta Convergence

• NGOs- IMF, WTO, World Bank

• Religious Secular Groups

• Industry Business Associations

• Local, State National Govt Agencies

Consumer Activists
Corporate, activist Shareholder organizations

• Special Interest Affinity groups

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The 3rd Waves Rising Tide of Activism
META-CONVERGENCE
60s 70s 80s 90s
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The 3rd Waves Rising Tide of Activism
META-CONVERGENCE

• 1965- Unsafe at Any Speed- Nader
• 1969- April 22nd Earth Day
• 1980s Social investing becomes significant
• 1990s-corporate governance activists begin use
  of shareholder resolutions targeted at specific
  corporate practices

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Activist Funds Make Waves

• A new class of social investor doesn't believe in
  boycotting problem companies -- it's opting to
  reform them from within

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By 2000- Shareholders put 2 trillion in socially
responsible options
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Initially- Consumer Eco Activists- generally
came from niche segment of society

• Upscale-SES
• Liberal in Attitude Lifestyle

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Accordingly Green Marketing Impact .. Early on
Not so much-
- March 6, 2002- Green' Sales Pitch Isn't Moving
Many Products

• 41 of consumers - dont buy green products
  because fear products wont work as well
• Only 29 of shoppers have recently bought a
  product because it was green

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circa 2000

• recycling rate of plastic soda bottles was 1/3
  of 1995 rate .
• single serve bottles on shelves - more then
  doubled to 18 billion

• 70 of baby food buyers preferred convenience of
  plastic to glass jars

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• Phillips billed its energy-saving bulbs as
  EarthLight sales never materialized
• Phillips repackaged relaunched as convenient,
  seven year Marathon bulbs
• Sales went up 12 .

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Today

• Eco- consciousness has become mainstream

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Roper Starch WorldwideProfile of Consumers has
tracked 5 Green Consumer segments since the 1990s
LOHAS
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Consumer Eco Activists-
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Sprouts
Swing group- May participate in conservation/
recycling- look for green products But will buy
only if price not higher
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• Doggedly Indifferent

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mid 90s
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Shift in 1 decade 1996 2007
True Blues 10 30
Green-Backs 5 10
Sprouts 33 26
Grousers 15 15
Apathetics 37 18
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NEW YORKAugust 22, GfK Roper Green Gauge study

• found vast majority (87) consumers agreeing
  --are seriously concerned about the environment.

http//www.gfkamerica.com/news/gfk_roper_environme
nt_companies.htm
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Roper and Starch

• Product purchasing consumption
• 1 way-Americans act upon their environmental
  concerns

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• And if the- Consumer cares
• .Companies care

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BENTONVILLE, Ark., Oct. 24,2005 - Wal-Mart's
chief executive announced a set of sweeping,
specific environmental goals

• Mr. Scott's announcement signals that the
  nation's largest retailer is joining the nation's
  largest manufacturer, General Electric, in
  pursuing policies that set specific goals for
  environmental performance, while advertising
  those goals to shareholders and customers and the
  public as strategic business decisions.

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The New Red, White BlueFront lines of a green
revolution.
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• This is not bleeding-heart liberalism.
• This is about managing risks in a challenging
  global context
• -- Equity analyst

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reporting of a companys reputation is now on
par with the reporting of finances.

• Corporate Social Responsibility (CSR) has
  become part of the bottom line

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Most Important Thing a Company Can Do to Be Seen
as Socially Responsible
Source Globescan 2005
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70 of global investment managers surveyed
believe that integrating environmental, social
and governance issues into analysis will become
mainstream in 3-10 years -- Mercer Consulting,
2005
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The only business of business is business--Milton
Friedman
Stark Contrast w/ 2nd wave Mantra
A successful business satisfies enough customers
at a high enough price so as to return a profit
to those who have invested in the entrepreneurial
activity
to the extent that customers express
satisfaction in a product or a service, in
continued purchases, the producer serves the
"public interest."
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Fords Model T Mentality

• Business is not designed/staffed/equipped for
  addressing social issues
• The over-riding responsibility of business is to
  maximise the profits of its owners shareholders
• The advancement of the Social welfare best
  handled by govt, church charitable
  institutions

• The Model T Requires
• 7,882 tasks requiring
• 949 strong men
• 3,338 ordinary men
• 670 legless
• 2,637 one legged
• 2 armless
• 715 one armed
• 10 blind men

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By 2002

• Just 2 still believed that the only business of
  business is business.
• Do more, say the people Murray ArmstrongMonday
  November 25, 2002

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Q When forming a decision about buying a product
from a particular company - how important or
unimportant is it to you that it shows commitment
to social responsibility?
. . and 1 in 5 would be very willing to pay more
Dont know
Very important
Not important
Fairly important
- September 2000 - MORI
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• Gen Y --
• 89 likely to switch brands if linked to cause
• 83 trust company more if socially responsible
• 79 want to work for company that contributes to
  society
• 78 believe companies have responsibility for
  making a difference in the world
• 74 more likely to pay attention to a companys
  overall messaging when they see that company has
  deep commitment to cause they care about
• 69 consider companies CSR reputation when
  deciding where to shop
• 61 feel personally responsible for making a
  difference in the world
• 56 would refuse to work for an irresponsible
  corporation

Source 2006 Cone Millennial Cause Study
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• Generation Y Workforce
• 97 believe companies should offer employees
  opportunities to volunteer
• 80 identify themselves as volunteers
• 62 prefer to work for companies that give them
  opportunities to volunteer

Deloittes 2007 Volunteer IMPACT Study
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The New Competition
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Indeed- the monitoring of your Companys
Reputation Social Responsibility has now been
taken up by the United Nations
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Created to fill the void

• A corporate social responsibility program
• A multi-stakeholder platform
• Based on principles
• Human Rights
• Labour Conditions
• Environment
• Anti-Corruption
• Universally recognized

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UN Corporate Responsibility Program

• Business Participation today
• 2000 Global, large domestic, SMEs
• All business sectors
• In Developed developing world
• 45 country networks

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http//www.unglobalcompact.org/Portal/Default.asp?
30 spot
2 hour panel-How Can Business Contribute to the
Global Compact?
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--- want max profit for shareholders with
honesty in business practices,safety in the
workplace, ..and also serve larger environmental
social issues.
Today's Managers must balance the bottom-line
against the ideals
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The Paradoxes of Business Today
but try not to let customer service cut too
deeply into profit margins
Treat customers well...
Create a diverse workforce...
but hire people from most prestigious
expensive universities
Develop codes of ethics...
even if the corporate culture mainly rewards
those who make their numbers
Go global ...
but maintain the cultural values of the home
office
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The Paradoxes of Business Today
Network, network, network...
but beware the Old Boys Club that can breed
corruption
Empower employees...
but monitor em carefully because youre legally
liable for their behaviors
Play by the rules...
but think outside the box.
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Ethical issues in business have become more
complicated because of
Business Ethics The Columbia Encyclopedia, Sixth
Edition.  2001.
the global diversified nature of many large
corporationsand because of the complexity of
government regulations
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The Power-Sphere -- authority allocated thru
formal informal political institutions
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Today - No Shortage of Laws Codes, Controlling
Business Marketing Practices
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Rise of the Bureaucrats
Nor No Shortage of Agencies, Commissions
Administrations to Enforce those Laws, Codes,
Guidelines
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Regulation Cradle to Grave
2006- The European Union has passed "end-of-life"
legislation, requiring auto makers to recycle or
reuse at least 80 of their old cars. Computers
electrical gear were already covered
The European Eco-label
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And its only going to get worse
has gotten

• As we transform to a global economy---
• Theres Emerging consensus that we need some
  global governance to avoid chaotic divergent
  national local regulation.

Herein-Cited from Stuart S. Malawer
http//www.global-trade-law.com/
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Trade Foreign Policy Issues for the 21st
Century --

• Uniform Commercial Code for eCommerce
• Customs taxation.
• Electronic payment systems.
• Intellectual property protection.
• Privacy (data transfers).
• Cyber Security.
• Content.
• Technical standards.
• Telecommunications Infrastructure, Information
  Technology Internet.
• Telephone access, connection charges other
  restrictions as trade issues FDI into domestic
  telecom Internet industries. (Many foreign
  telecoms are still state owned.)

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Key Debate Discussion

• Global trade institutions are only now beginning
  to address dramatic challenges of Internet trade
  eCommerce.

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Major Players

• WTO- World Trade Organization
• ITU-International Telecommunications Union
• WIPO (World Intellectual Property Organization
• UNCTAD United Nations Conference on Trade and
  Development
• GBDe (Global Business Dialogue on Electronic
  Commerce),

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IP protection a strategic issue

• Established sentiment --nothing wrong w/sharing
  music/video files
• The China syndrome (Brand-Jacking) flooding
  global market w/ illegal copies -- knockoffs

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Six Emerging Principles.

1. Private sector should lead.
2. No undue market restrictions.
3. Simple legal environment.
4. Recognize uniqueness of Internet.
5. The Internet changes everything, business models
   government.
6. Facilitate globalization of E-Commerce E-Trade
   via Internet

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Principles reflect the fact that the world has
become an interactive, blurred, fluid
MULTIFACITED LANDSCAPE
Ethno
Techno
Media
Finance
Ideo
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• an ethno-scape of mobile populations of
  businesses, workers, students, refugees
• a techno-scape of diffusion adoption of
  mechanical informational technologies
• a finance-scape of global capital
• a media-scape, which includes not only global
  spread of media channels, but images they carry
  
• an ideo-scape of political discourses re
  democracy human rights.

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So what the hell does that mean??
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DEFINED

• A process in which
• Societies, cultures, polities economies in the
  world are coming together
• world is shrinking in space, time relations.

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Globalization is a complex topic

• can be interpreted many different ways,
• each of which reveals different facets of its
  complexity

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a complex topic

• .leads to
• Confusion
• Controversy
• Conflict

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What it means depends on your perspective
Corp. Executive Marketer
An IT worker in India
Politician
Activist
Consumer
A Chinese Laborer
Anthropologist
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What is Globalization?

• Is it Good or Bad?
• Is it a Threat or Opportunity?
• Does it have Positive or Negative Impacts?
• Is it a Corp. Strategy or Social Phenomenon?

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What it is depends on who you are

• Business Exec - sees new Markets Sources of Raw
  Materials Labor
• Consumer- sees more Cheaper products
• Social Scientist-sees Acculturation
  Assimilation.
• Activist- sees Exploitation, Moral Corruption
  Environmental Degradation

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Cultural Impacts
Domination
Assimilation
Polarization
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Domination
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Consequence of Cultural Imperialism
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Poland
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BeijingReal Estate
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From Beijing to Bangladesh
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M-fluences on indigenous cultures

• Multi-Nationals
• Movies
• Music MTV
• McDonalds

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McDs
Jerusalem
Istanbul
Guangzhou
Beijing
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Backlash to Cultural Imperialism
Backlash to Cultural Economic Imperialism
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But-Keep it in Perspective!

• Most trade still regional
• Local still matters
• Few global brands
• Global Influence- mainly in big cities

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Cultural Assimilation is most prevalent

• Globalization often results in a melding of
  foreign domestic product forms functions

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Kentucky Fried Moose-Toronto
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http//babelfish.altavista.com/ I will explain
it to you at Mcdo
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Brand Preference is Superficial
One can pay too much attention the kinds of
consumer goods that people buy. That's a
superficial aspect of culture
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Example Cola Turka

• Multinational corporations dont always get their
  way
• Local cultures respond on their own terms

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• Yet- Regardless of the citizens reaction to
  foreign products
• Globalization is slowly but surely eroding the
  preeminence of the nation-state

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• The implications of globalization for the future
  of the nation-state

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The Nation State pressured from all sides
From Above global communications, global
economy, worldwide environmental repercussions
From W/out Non-governmental Organizations
From Within Multi/Trans-nationals own agendas-
loyal to themselves, play countries against
each other
From Below -- mounting sectarian pressures
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• Circumstances differ from country to country
• but what does not differ is the revolutionary
  challenge posed by the 3rd Wave
• to obsolete
• 2nd Wave
• institutions
• too slow to keep up w/ the pace of change ...
  to cope w/ new levels of social political
  diversity.

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• "As we race into the Third Wave era, those of us
  who want to expand human freedom will not be able
  to do so by simply defending our existing
  institutions.
• We shall -- like America's founding parents two
  centuries ago -- have to invent new ones."

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• In all likelihood it will require the radical
  overhaul or even scraping-of
• Congress, Politburos, Houses of Common Lords,
  Bundastags, Diets
• The giant ministries and entrenched civil
  service and systems
• In short all the unwieldy unworkable apparatus
  of supposedly representative governments

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2nd WavePowerSphereCollapse

• "As the Second Wave produced a mass society, the
  Third Wave de-massifies us,. moving the entire
  social system to a much higher level of diversity
  complexity.
• This revolutionary process, much like the
  biological differentiation that occurs in
  evolution, helps explain one of today's most
  noted political phenomena - the collapse of
  consensus."

Toffler, The Third Wave, p. 408
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Toffler, The Third Wave, p. 410

• the collapse of consensus
• In 2nd Wave society a political leader could glue
  together half a dozen major blocs, as Roosevelt
  did in 1932, .. expect the resulting coalition
  to remain locked in position for many years.

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Toffler, The Third Wave, p. 410

• the collapse of consensus
• Today it is necessary to plug together hundreds,
  even thousands, of tiny, short-lived special
  interest groups that cleave together just long
  enough to elect a president, then break apart
  again the day after the election, leaving him
  without a base of support for his programs

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In a de-massified society, we not only lack
national purpose, we also lack regional,
statewide, or city-wide purpose. ...

• In a mass industrial society, when people and
  their needs were fairly uniform and basic,
  consensus was an attainable goal.

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What, then, happens to the very notion of
'representative democracy?'

• The elected representative cannot represent the
  general will
• for the simple reason that there is none!

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http//www.guardian.co.uk/2020/0,15047,1299021,00.
html
The onward march of individualism - either
through choice or fate - is still probably the
major force shaping our world
The central question is Will the slow collapse
of institutions that have been vehicles for our
shared identity mean collapse of identity itself?
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Vid-Clip Outline

• Timberland- (10)
• Frontline- The Persuaders - Segment (15)
• Toffler-2nd vs. 3rd Wave PowerSphere (15)

• McDonalds CSR progress (5)
• Corporate Social Responsibility (5)
• UN Global Compact-