Marketing Strategy Chapter 10 Social, Electronic Commerce, and Global Considerations in Strategic Market Planning
Social Responsibility & Ethics Issues Definition Social Responsibility An organization's obligation to maximize its positive impacts on society while minimizing its negative impacts. Ethics The moral principles and values that govern the way an individual or group conducts its activities. Marketing Ethics The principles, values, and standards of conduct considered appropriate for marketers. Morals Vs Laws Morals - rules people develop as a result of cultural values and norms. Laws - values and standards enforced by the courts.
Ethical Responsibilities - do what is right Legal Responsibilities - obey the law Economic Responsibilities - be profitable Pyramid of Social Responsibility Philanthropic Responsibilities - good corporate citizen
Increasing evidence of a link between social responsibility, ethics, and marketing performance. A relationship exists between a market orientation organization and ethics and social responsibility. Satisfied employees are more likely to satisfy customers. Employee satisfaction, customer loyalty, and service quality are all positively interrelated with ethics and social responsibility. Companies that do not develop strategies and programs to incorporate ethics and social responsibility into their organizational culture pay the price with potentially poor marketing performance and face the potential costs of legal violations, civil litigation, and damaging negative publicity when questionable activities are discovered by the public. Why include ethics and social responsibility in the strategic market planning process
Firm’s must integrate ethics and social responsibility into their strategic planning process through ethics compliance programs and codes of conduct that make legal compliance, ethics, and social responsibility an organization wide effort. The Federal Sentencing Guidelines for Organizations (FSGO) codified into law incentives for organizations to develop ethics and legal compliance programs to detect and deter misconduct. The marketing plan should include distinct elements of ethics and social responsibility as determined by top-level marketing managers. Incorporating Ethics and Social Responsibility into Strategic Market Planning
The Federal Sentencing Guidelines: Seven Steps to Ethical Compliance 1) Establish codes of ethical conduct 2) Appoint or hire a high-level compliance manager (corporate ethics officer) 3) Exercise caution in delegating authority with respect to ethical issues 4) Implement an ethics communication and training program 5) Monitor and audit for ethical misconduct 6) Enforce ethical codes and discipline those who violate the codes 7) Revise compliance program as needed Source: U.S.S.C. Federal Sentencing Guidelines for Organizations, 1991.
Slide 2-14 Electronic Commerce Issues Definition Internet An international network of computers that provides people global communication and access to million of information resources. HTML Hyper Text Mark-up Language - the language used to design web pages. World Wide Web A hypertext system that allows users to receive text, graphics, video, and sound by clicking on particular words and images. Browser A software program that runs on a personal computer and provides graphical user interface to the WWW (e.g., Netscape Navigator, Microsoft Internet Explorer).
The computer industry is well positioned to take advantage of the Internet through new products that give customers access to the Internet and maximize their use of it. Several organizations have developed indexes and search engines that keep track of and catalog the information available on the World Wide Web. Marketers are also using the Web to create unique products to satisfy the needs of specific target market segments. The most successful Web sites evolve as "virtual communities" where "like-minded cybernauts congregate, swap information, buy something, and come back week after week." New Products for the Internet
Advertising is one of the more lucrative ways marketers can capitalize on the WWW. More companies are recognizing the value of the Web to provide "infotainment" that can foster brand identity and loyalty and develop long-term relationships with customers. Most online directory and search engine services sell advertising on their directory pages. Increasingly, these banners are targeted to the user accessing the Web page. Promotion is increasingly occurring through corporate sponsorship of Web sites. Web advertising generates millions of dollars in revenues for companies that choose to carry such advertising. Promotion on the Internet
The Internet is increasingly becoming a retail venue. Astute marketers have expanded the concept of electronic commerce further by creating virtual shopping malls where online shoppers can "walk" from store to store and place goods in a "shopping cart." Another retailing adventure is supplied by online auctioneers. New Channel’s of Distribution
The Internet's effect on pricing strategies relates to its ability to give consumers quick access to prices, which facilitates comparison shopping. Some firms are using the Internet to implement low-price policies. Pricing on the Internet
Global marketing occurs when companies treat the entire world as the focus for marketing planning and implementation. It is a broader concept than international marketing, which occurs anytime a company crosses national boundaries to buy or sell products. Reasons to engage in international and global marketing activities. One of the most attractive is market potential. Global marketing also affords an opportunity to extend the life cycle of maturing products by introducing them into new markets. Global marketing can help minimize seasonal sales fluctuations. Foreign products often command higher prices because consumers in many countries expect foreign products to cost more. Globalization
Levels of Strategic Involvement in Global Marketing Lowest Commitment Highest Commitment • Importing and Exporting • Trading Companies • Licensing and Franchising • Contract Manufacturing • Direct Investment • Joint Ventures
Using the same product and promotion worldwide is desirable wherever possible because it eliminates the expense of marketing research and product development. Marketing the same product but adapting its promotion may be necessary because of language, legal, or cultural differences associated with the advertising copy. The basic assumption in modifying a product without changing its promotion is that the product will serve the same function under different conditions of use. When a product serves a new function or is used differently in a foreign market, then both the product and its promotion require alteration. When existing products cannot meet the needs of a foreign market, a firm may choose to invent new ones. Approaches to adapting product and promotion
A firm can sell its own product to an intermediary that is willing to buy through existing market channels in the United States, or it can develop new international marketing channels. The firm must consider distribution both between countries and within the foreign country. If a product being sold across national boundaries requires service and information, then control of the distribution process is desirable. Political instability can jeopardize the distribution of products. Distribution
A cost-plus approach to international pricing is commonly used because of the compounding number of costs necessary to move products from the United States to a foreign country. The price charged in other countries is also a function of foreign currency exchange rates. A key marketing strategy decision is whether the firm will change its basic pricing policy when moving beyond the U.S. Price