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BA635 Current Issues in Marketing

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Title: BA635 Current Issues in Marketing


1
The Bio Power Spheres
BA635 Current Marketing Issues
2
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

3
-just as the sub-spheres of the BioSphere
4
Are interdependent
5
So too are the spheres of our society Wherein
Change in one sphere.
impacts all other Spheres
6
That Interaction among Spheres
7
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

8
  • 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

9
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

10
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

11
The 3rd Waves Rising Tide of Activism
META-CONVERGENCE
60s 70s 80s 90s
12
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

13
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

14
By 2000- Shareholders put 2 trillion in socially
responsible options
15
Initially- Consumer Eco Activists- generally
came from niche segment of society
  • Upscale-SES
  • Liberal in Attitude Lifestyle

16
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

17
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

18
  • Phillips billed its energy-saving bulbs as
    EarthLight sales never materialized
  • Phillips repackaged relaunched as convenient,
    seven year Marathon bulbs
  • Sales went up 12 .

19
Today
  • Eco- consciousness has become mainstream

20
Roper Starch Worldwide Profile of Consumers has
tracked 5 Green Consumer segments since the 1990s
LOHAS
21
Consumer Eco Activists-
22
Sprouts
Swing group- May participate in conservation/
recycling- look for green products But will buy
only if price not higher
23
  • Doggedly Indifferent

24
mid 90s
25
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26
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
27
Roper and Starch
  • Product purchasing consumption
  • 1 way-Americans act upon their environmental
    concerns

28
  • And if the- Consumer cares
  • .Companies care

29
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.

30
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The New Red, White Blue Front lines of a green
revolution.
32
  • This is not bleeding-heart liberalism.
  • This is about managing risks in a challenging
    global context
  • -- Equity analyst

33
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

34
Most Important Thing a Company Can Do to Be Seen
as Socially Responsible
Source Globescan 2005
35
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
36
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."
37
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

38
By 2002
  • Just 2 still believed that the only business of
    business is business.
  • Do more, say the people Murray Armstrong Monday
    November 25, 2002

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42
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
43
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45
  • 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
46
  • 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
47
The New Competition
48
Indeed- the monitoring of your Companys
Reputation Social Responsibility has now been
taken up by the United Nations
49
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

50
UN Corporate Responsibility Program
  • Business Participation today
  • 2000 Global, large domestic, SMEs
  • All business sectors
  • In Developed developing world
  • 45 country networks

51
http//www.unglobalcompact.org/Portal/Default.asp?
30 spot
2 hour panel-How Can Business Contribute to the
Global Compact?
52
--- 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
53
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
54
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.
55
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
corporations and because of the complexity of
government regulations
56
The Power-Sphere -- authority allocated thru
formal informal political institutions
57
Today - No Shortage of Laws Codes, Controlling
Business Marketing Practices
58
Rise of the Bureaucrats
Nor No Shortage of Agencies, Commissions
Administrations to Enforce those Laws, Codes,
Guidelines
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63
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
64
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/
65
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.)

66
Key Debate Discussion
  • Global trade institutions are only now beginning
    to address dramatic challenges of Internet trade
    eCommerce.

67
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),

68
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

69
Six Emerging Principles.
  • Private sector should lead.
  • No undue market restrictions.
  • Simple legal environment.
  • Recognize uniqueness of Internet.
  • The Internet changes everything, business models
    government.
  • Facilitate globalization of E-Commerce E-Trade
    via Internet

70
Principles reflect the fact that the world has
become an interactive, blurred, fluid
MULTIFACITED LANDSCAPE
Ethno
Techno
Media
Finance
Ideo
71
  • 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.

72
So what the hell does that mean??
73
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74
DEFINED
  • A process in which
  • Societies, cultures, polities economies in the
    world are coming together
  • world is shrinking in space, time relations.

75
Globalization is a complex topic
  • can be interpreted many different ways,
  • each of which reveals different facets of its
    complexity

76
a complex topic
  • .leads to
  • Confusion
  • Controversy
  • Conflict

77
What it means depends on your perspective
Corp. Executive Marketer
An IT worker in India
Politician
Activist
Consumer
A Chinese Laborer
Anthropologist
78
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?

79
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

80
Cultural Impacts
Domination
Assimilation
Polarization
81
Domination
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83
Consequence of Cultural Imperialism
84
Poland
85
Beijing Real Estate
86
From Beijing to Bangladesh
87
M-fluences on indigenous cultures
  • Multi-Nationals
  • Movies
  • Music MTV
  • McDonalds

88
McDs
Jerusalem
Istanbul
Guangzhou
Beijing
89
Backlash to Cultural Imperialism
Backlash to Cultural Economic Imperialism
90
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95
But-Keep it in Perspective!
  • Most trade still regional
  • Local still matters
  • Few global brands
  • Global Influence- mainly in big cities

96
Cultural Assimilation is most prevalent
  • Globalization often results in a melding of
    foreign domestic product forms functions

97
Kentucky Fried Moose-Toronto
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100
http//babelfish.altavista.com/ I will explain
it to you at Mcdo
101
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
102
Example Cola Turka
  • Multinational corporations dont always get their
    way
  • Local cultures respond on their own terms

103

104
  • Yet- Regardless of the citizens reaction to
    foreign products
  • Globalization is slowly but surely eroding the
    preeminence of the nation-state

105
  • The implications of globalization for the future
    of the nation-state

106
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
107
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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.

110
  • "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."

111
  • 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

112
2nd Wave PowerSphereCollapse
  • "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
113
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.

114
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

115
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.

116
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!

117
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?
118
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-
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