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Unformatted text preview: Ethics and Globalization
Chapter 3 Patagonia's Stewardship Products Recycled polyester, organic cotton Packaging Underwear in rubber bands Promotion Recycled paper products Activism For us at Patagonia, a love of wild and beautiful places demands participation in the fight to save them, and to help reverse the steep decline in the overall environmental health of our planet. We donate our time, services and at least 1% of our sales to hundreds of grassroots environmental groups all over the world who work to help reverse the tide. Current campaign: Arctic National Wildlife Refuge Cause Related Marketing Starbucks and America SCORES Former barista and DC school teacher decides kids need a safe place to go after school Convinces coworkers to donate tips for equipment Later leaves SB and teaching to form America SCORES Now in 18 cities Play soccer and do poetry on alternating days + Cultural Diversity Actively seeking to include people of different sexes, races, ethnic groups, religions in an org's employees, customers, suppliers, and distribution channel providers Example: Coors... Cultural Diversity at Coors
"Doing Our Part" At Coors, we understand that our employees, suppliers, and distributors are absolutely critical to our success. To attract and retain employees who fully support our corporate vision and values, Coors pledges to maintain high standards around valuing differences and respecting all people. Our commitment to workplace diversity contributes to our success and strengthens us as a company. For Coors, diversity is not just a program -- it's the way we do business every day. We embrace different thinking styles, backgrounds and cultures, as well as gender and race. Ultimately, workplace diversity makes our marketing more creative, our sales force stronger, our products of higher quality, our ideas more Ethics Ethics Rules of appropriate conduct Can vary from culture to culture, based on values Code of Ethics Written standards of behavior to which everyone in the organization must subscribe AMA Ethical Norms and Values Norms and Values
1. Do no harm 2. Build trust in marketing system 3. Uphold several key values so as to increase confidence in marketing exchange system: Honesty (to customers and stakeholders) Responsibility (accept consequences of out actions) Fairness (balancing needs of buyer and seller) Respect (all stakeholders) Openness (in marketing activities) Citizenship (legal, economic, societal, charitable) Consumerism Definition Social movement that tries to protect consumers from harmful business practices Historical Roots Rachel Carson's Silent Spring Ralph Nader's Unsafe at Any Speed Consumer Bill of Rights (Kennedy) Safe Informed Heard Choose freely Going Global World Trade Value of all exports and imports of world's nations Some Statistics Since 2003, world trade growing 6-10% annually In 2005, world trade estimated at $12.4 trillion Of 100 largest economies, 47 are multinational corps. 1 in 10 U.S. jobs related to exporting Nearly 1/3 of U.S. profits from international trade Exports = 25% of U.S. economic growth But, only 10% of U.S. manufacturing businesses Things to Consider When Going Global Decision Model Figure 3.4 Things to Consider When Going Global Market Conditions Is domestic demand leveling off? Are international competitors moving in? Competitive Advantage Can our company offer something that others are not? Trade Barriers Protectionism policy giving domestic company advantage Import quotas limit amount of certain import Embargos complete prohibition of certain import Tariffs taxes on imported goods Some Solutions... International Trade Agreements and Organizations General Agreement on Trade and Tariffs (GATT) 1947 agreement to limit import taxes and trade restrictions Subsequent 7 meetings reduced tariffs on manufactured goods from 45% to 5 % Uruguay Round (last round ended 1994) Further lowered tariffs on merchandise Extended reductions to agriculture and services Increase copyright, patent, trademarks, intellectual property Set up "World Trade Organization" to enforce rules Economic Communities Free Trade Zones Increase trade efficiency, make members more competitive North American Free Trade Agreement (NAFTA) Formed 1994 Canada, USA, Mexico Single market has 435 million people Trade has risen 173% since inception European Union Formed 1957 By 2007, 27 countries Nearly 500 million people Considering the Economic Environment Economic Health Gross domestic product (GDP) Dollar value goods/services a country produces in its border in a year Gross national product (GNP) Dollar value of goods/services both in and out of border in a year Business Cycle Prosperity (high demand, employment, income) Recession (falling demand, employment, income) Considering the Economic Environment
Industrial Structure Subsistence economies Mainly agriculture, not many market opportunities Raw material exporting economies Rich in a few resources (Chile = tin and copper) Good market for large equip., tools, supplies, staples Industrializing economies 10-20% manufacturing Markets = new rich class, growing middle class Industrial economies Major exporters of manufactured goods/services Large middle class is a very attractive market Considering the Competitive Environment Competition in Microenvironment Discretionary income What are alternatives people consider with their DI Product competition Competitors offering different product/service to satisfy same need Brand competition Competitors offering similar products/services but compete on reputation or perceived benefits Considering the Competitive Environment Competition in Macroenvironment Who has control over how much of the market? Four Types of Competitive Structures Monopoly One company controls entire market Oligopoly A small # of companies control the market Monopolistic competition Large # of companies compete with different products Perfect competition Large # of small sellers offering same good Considering Sociocultural Issues Values Deeply held beliefs about right/wrong behavior Norms Specific rules indicating right/wrong behavior Customs Norm handed down over time that controls behavior Mores Customs with a strong moral overtone Conventions Norms regarding conduct of everyday life Language... Lost in Translation Pepsi in Chinese Come alive with the Pepsi Generation ... Pepsi will bring your ancestors back from the grave Parker Pen in Mexico It won't leak in your pocket and embarrass you ... It won't leak in your pocket and make you pregnant Purdue Chicken Slogan in Spanish It takes a strong man to make a tender chicken ... It takes an aroused man to make a chicken affectionate Coors in Spanish Turn it loose ... suffer from diarrhea Scandinavian Electrolux American Ad Nothing sucks like an Electrolux Other Considerations Technological Environment Legal-Political Structure Could facilitate or hamper attempts to move into market Could find political or regulatory constraints on trade Need to be aware of human rights conditions Might require "countertrade" (trading goods for goods) if country doesn't have enough currency Four Ways to Go Global Export Product created in home country sold in foreign market with little or no modification Can be indirect )they handle marketing) or direct (you handle marketing) Contractual Agreements Licensing Give another company right to produce and market your product in exchange for royalties (e.g., Tokyo Disneyland run by Oriental Land Co. Inc.) Franchising Right to adapt an entire way of doing business (McDs) Four Ways to Go Global Strategic Alliance Joint Venture Two or more firms create a new entity to pool Direct Investment Develop your own firm in the host country, often by buying existing firm Adapting the Marketing Mix
Don't Change Product Don't Change Communication Change Communication Straight Extension Communication Adaptation (e.g. Rider Shoes) Adapt Product Product Adaptation Dual Adaptation (e.g. Rider Shoes) Develop New Product Product Invention Helpful Resources for International Marketing U.S. Commercial Service Federation of International Trade Associations ...
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This note was uploaded on 04/17/2008 for the course MKTG 360 taught by Professor Joireman during the Spring '08 term at Washington State University .
- Spring '08