What do these firms have in common

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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-for- profit
  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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Dennys
Dennys 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 worlds
  nations
• What products do you own that were made in the
  U.S.? In other countries?
• World Population Clock
• U.S. 303,604,280World 6,655,851,1651930 GMT
  (EST5) 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 countrys
  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
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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?