Transcript Chapter 3 Powerpoint

What do these firms have in common?
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Doing it Right
• Social Profit
– Codes of ethics are written standards of
behavior
– Issues addressed include bribery, political
contributions, equal employment
opportunity, environment, health, safety,
etc.
– Figure 3.1 provides the AMA code of ethics
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The Consumer Bill of Rights
• President John F. Kennedy
outlines in his 1961 inaugural
speech what came to be
known as the Consumer Bill of
Rights:
– The right to be safe
– The right to be informed
– The right to be heard
– The right to choose freely
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Right to safety
• FDA – requires that food, drugs and
cosmetics be safe. Guidelines for
labels (contents, ingredients, nutrients,
directions for use, weight, address, etc.
Can remove hazardous products.
Recall.
• FTC – protects consumers from unfair
and deceptive business practices
(misleading information)
• EPA
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Right to be informed
• Protect against fraudulent/misleading
practices (need facts)
• Puffery - ok
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Right to be heard
• Consumers can complain and express
dissatisfaction.
• Office of Consumer Affairs – direct you
to appropriate government agency for
further assistance.
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Right to Choose
• Variety of products (generic, etc.)
• No monopolies
• Competitive prices, good quality
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Consumer Product Safety Commission
This product
was recalled
when a risk of
electrocution
was
discovered
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Ethics in the Marketing Mix
• Making a product safe
• Pricing the product fairly
• Promoting the product ethically
– Puffery versus deceptive advertising
– Firms found guilty for deceptive advertising
by the FTC may be fined and required to
run corrective advertising
• Making the product available ethically
– slotting allowances
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Social Responsibility
• Management philosophy in which
organizations engage in activities that have
a positive effect on society and promote the
public good.
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Environmental Stewardship
• Firms make choices that protect the
environment
• Green marketing describes a type of
environmental stewardship in which
firms choose packages, product
designs, and other aspects of the
marketing mix that are earth friendly
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Muir Land Trust
This organization
works to save
open spaces and to
support environmental
education programs
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Cause Marketing
• Strategy of joining forces with a not-forprofit organization to tackle a social
problem
– Straight donations to a charity
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Promoting Cultural Diversity
• Cultural diversity programs ensure that
marketing policies and hiring practices give
people an equal chance to work for the
company and buy its products
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Denny’s
Denny’s shows a
strong commitment
to diversity in every
aspect of its business
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World Trade
• World trade refers to the flow of goods
and services among different countries
- the value of all the exports and imports
of the world’s nations
• What products do you own that were
made in the U.S.? In other countries?
• World Population Clock:
– U.S. 303,604,280
World 6,655,851,165
19:30 GMT (EST+5) Mar 10, 2008
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Figure 3.2: Entering Foreign Markets
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Borders and Roadblocks
• Protectionism is a government policy
which seeks to provide home
companies an advantage over foreign
companies by implementing trade
barriers
– Import quotas
– Embargos
– Tariffs
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GATT and the WTO
• The General Agreement on Tariffs and Trade
(GATT) developed by the United Nations after World
War II - sought to moderate trade conflicts
• GATT replaced (1995) by World Trade Organization
(WTO)
• Objective: “to help trade flow smoothly, freely, fairly,
and predictably”
• Role: acts as a forum for negotiations among
countries, settles trade disputes, and assists
developing countries with training programs
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Economic Communities
• Countries band together to form an alliance
• Such economic communities coordinate trade
policies and ease restrictions on trade across
the member borders
– EU (European Union) (25 countries)
– NAFTA (North American Free Trade
Agreement) (3 countries)
– APEC (Asia-Pacific Economy Cooperation)
(22 countries)
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Indicators of Economic Health
• Gross Domestic Product (GDP) - the
dollar value of goods and services a
country produces within its borders
within one year
• Gross National Product (GNP) - the
value of all goods and services
produced by a country’s individuals or
organizations, whether in or out of
country borders
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Economic Development
• Less Developed Countries (LDC)
– lowest stage of economic development
• Developing Countries
– economies shift from agriculture to
industry; standards of living, education,
and use of technology rise
• Developed Countries
– economically advanced countries; the G7
countries (US, UK, Canada, France, Italy,
Germany, Japan)
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People in Developing Countries
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Cultural Environment
Values
Cultural
Change
Ethnocentricity
Norms
Language
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Figure 3.4: Market Entry Strategies
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Standardization versus Localization
• Standardization suggests that greater
efficiencies and economies of scale are
generated when all marketing is the
same in each country
• Localization recognizes that customer
satisfaction will be highest when the
marketing mix is tailored to local needs
and wants
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Product Decisions
• Sell the same product in the new market
(straight extension strategy)
• Modify the product for the new market
(product adaptation strategy)
• Develop a brand new product for that
new market (product invention strategy)
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Toyota Corolla Iceland
Toyota has
selected its
Corolla to be a
world car that is
sold in all
markets from
Egypt to Iceland
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Price Decisions
• Costs associated with transportation, tariffs,
differences in currency exchange rates, and
bribes may make a product more expensive
in one country than another
• Gray marketing - unauthorized party imports
products and sells them for less
• Dumping - a company prices its products
lower than at home in order to establish a
market
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Distribution Decisions
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Issues for Discussion
• What about American culture might be
objectionable to other countries? Can
you think of some products that U.S.
marketers export that might be
objectionable to foreign markets?
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Issues for Discussion_3
• How concerned should firms that have
international operations be about
terrorism and other types of violence
around the globe? Should they abandon
global markets? Would avoiding
countries in the Middle East make good
sense in terms of economic profit? In
terms of social profit?
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