BA635 BA635 Current Marketing IssuesCurrent Marketing Issues

The Bio & Power The Bio & Power SpheresSpheres

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, NGO’s & Gov’t

• The Challenge of Commerce & Regulation in a Global market

• The Collapse of Consensus

-just as the sub-spheres of the BioSphere…

Are interdependent…

So too are the spheres of our society… Wherein: Change in one sphere….

BIOBIOPSYCHO

TECHNO

POWERSOCIOSOCIO

INFO

impacts all other Spheres…

That Interaction among Spheres

Accelerating &

Intensifying

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

• 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

Bio & Power-sphere Pressures on Today’s Corporation

•Environment / Global Warming

* Employment/ outsourcing;

•Health & Quality-of-life

Corporate Psyche

•Responsibility- obligation

•Performance- results•Responsiveness- action

•Community/ WorkplaceBI

OPo

wer

The 21st Century- The 21st Century- Meta ConvergenceMeta Convergence

-Industry & Business

Associations

Corporate, & activist –

Shareholder organizations

-NGO’s- IMF, WTO, World Bank

-Religious & Secular Groups

-Local, State & National Gov’t

Agencies

-Special Interest & Affinity groups

Consumer Activists

The 3rd Wave’s Rising Tide of Activism

META-CONVERGENCE

60’s… 70’s… 80’s… 90’s

The 3rd Wave’s Rising Tide of Activism

1965- Unsafe at Any Speed- Nader 1969- April 22nd= Earth Day 1980s Social investing becomes

significant 1990’s-corporate governance

activists begin use of shareholder resolutions targeted at specific corporate practices

META-CONVERGENCE

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

By 2000- Shareholders put $2 trillion in socially responsible options

Upscale-SESUpscale-SES Liberal in Liberal in

Attitude & Attitude & LifestyleLifestyle

Initially- Consumer & Eco Activists- generally came from niche segment of society

Accordingly Green Marketing Impact .. Early on –Not so much-

41% of consumers - don’t buy green products because fear products won’t work as well

Only 29% of shoppers have recently bought a product because it was “green”

- March 6, 2002- Green' Sales Pitch Isn't Moving Many Products

… circa 2000…

70% of baby food buyers preferred convenience of plastic to glass jars

•recycling rate of plastic soda bottles was ~1/3 of 1995 rate ….•single serve bottles on shelves - more then doubled to 18 billion

Phillips billed it’s energy-saving bulbs as “EarthLight” & sales never materialized

Phillips repackaged & relaunched as convenient, seven year Marathon bulbs

Sales went up 12% ….

TodayEco- consciousness has

become mainstream

Roper Starch WorldwideProfile of Consumers has tracked 5 Green Consumer segments since the 1990’s

LOHAS

Consumer & Eco Activists-

SproutsSwing group- May participate in conservation/ recycling-& look for green products– But will buy only if price not higher

Doggedly Indifferent

~mid ’90’s

Shift in 1 decade:

1996 2007

True Blues 10% 30%

Green-Backs 5% 10%

Sprouts 33% 26%Grousers 15% 15%

Apathetics 37% 18%

NEW YORK–August 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_environment_companies.htm

Roper and StarchProduct purchasing

& consumption = #1 way-Americans

act upon their environmental

concerns

And if the- Consumer cares

….Companies care

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.”

The New Red, White & BlueFront lines of a green revolution.

“This is not bleeding-heart liberalism.

This is about managing risks in a challenging global context

-- Equity analyst

… reporting of a company’s reputation is now on par with the reporting of finances.

Corporate Social Responsibility (CSR) – has become part of the bottom line…

Source: Globescan 2005

Most Important Thing a Company Can Do to Be Seen as Socially Responsible

“

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

The only business of business is business--Milton Friedman

…to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest."

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…

Stark Contrast w/ 2nd wave Mantra:

Ford’s 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 gov’t, church & charitable institutions”

The Model TThe 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”*

By 2002

Just 2% still believed that the only business of business is business.

Do more, say the people

Murray ArmstrongMonday November 25, 2002

Very important

Fairly important

24%25%

6%

45%

Don’t know

Not important

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?

- September 2000 - MORI

. . and 1 in 5 would be very willing to

pay more

Gen Y --89% likely to switch brands if linked to cause83% trust company more if socially responsible79% want to work for company that contributes to society78% believe companies have responsibility for making a

difference in the world74% more likely to pay attention to a company’s 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

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

Deloitte’s 2007 Volunteer IMPACT Study

Also the Company

The New CompetitionThe New Competition

And Position

Not just Product

Indeed- the monitoring of your Company’s Reputation & Social Responsibility has now

been taken up by the United Nations…

A corporate social responsibility program

A multi-stakeholder platform Based on principles:

Human Rights Labour Conditions Environment Anti-Corruption

Universally recognized

Regulation Company CodesGlobal Compact

Created to fill the void…

UN Corporate Responsibility Program

Business Participation today

~ 2000 Global, large domestic, SMEs

All business sectors In Developed & developing

world 45 country networks

http://www.unglobalcompact.org/Portal/Default.asp?

30’ spot

2 hour panel-How Can Business Contribute to the Global Compact?

“--- 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 –

Treat customers well... …but try not to let customer service cut too deeply into profit margins

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

The “Paradoxes” of Business Today

Play by the rules...

…but think outside the box.

The “Paradoxes” of Business TodayNetwork, network, network...

Empower employees...…but monitor ‘em carefully because you’re legally liable for their behaviors

…but beware the Old Boys’ Club that can breed corruption

“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 …”

The Power-Sphere -- authority allocated thru formal &

informal political institutions

Today - No Shortage of Laws & Codes, Controlling Business & Marketing Practices

Rise of the Bureaucrats

Nor – No Shortage of Agencies, Commissions & Administrations to Enforce those Laws, Codes, Guidelines

The European Eco-label

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

And its only going to get worsehas gotten

As we transform to a global economy---There’s 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/

Trade & Foreign Policy Issues for the 21st Century --

1. Uniform Commercial Code for eCommerce 2. Customs & taxation.3. Electronic payment systems.4. Intellectual property protection.5. Privacy (data transfers).6. Cyber Security.7. Content.8. Technical standards.9. 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.)

Key Debate & Discussion

Global trade institutions are only now beginning to address dramatic challenges of Internet trade & eCommerce.

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),

Major Players

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

Six Emerging Principles.

1. Private sector should lead.2. No undue market restrictions.3. Simple legal environment.4. Recognize uniqueness of Internet.5. The Internet changes everything, business

models & government.

6. Facilitate globalization of E-Commerce & E-Trade via Internet

Principles reflect the fact that the world has become an interactive, blurred, fluid & MULTIFACITED LANDSCAPE …

Ethno

Techno

Media

Finance

Ideo

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.

GLOBALIZATION

So what the hellhell

does that

mean??

GLOBALIZATION

A process in which: Societies, cultures,

polities & economies in the world are coming together

& world is shrinking in space, time & relations.

DEFINEDDEFINED

GLOBALIZATION

Globalization is a complex topic

… can be interpreted many different ways,

each of which reveals different facets of its complexity”

GLOBALIZATION

a complex topic

….leads toConfusionControversy

Conflict

GLOBALIZATION

What “it” means depends on your perspective:

Politician

Consumer

Anthropologist

Corp. Executive Marketer

Activist

A Chinese Laborer

An IT worker in India

GLOBALIZATION

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?

GLOBALIZATIONWhat “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

GLOBALIZATION

Polarization

AssimilationDomination

Cultural Impacts

GLOBALIZATION

Domination

GLOBALIZATION

GLOBALIZATION

Consequence of Cultural Imperialism

GLOBALIZATION

Poland

GLOBALIZATION

BeijingReal Estate

GLOBALIZATION

From Beijing to Bangladesh

GLOBALIZATION “M-fluences” on indigenous

cultures…Multi-NationalsMoviesMusic – MTVMcDonald’s

GLOBALIZATION

McD’sMcD’s

GuangzhouBeijing

JerusalemIstanbul

GLOBALIZATION

Backlash to Cultural Imperialism=

Backlash to Cultural & Economic

Imperialism=

GLOBALIZATION

GLOBALIZATION

GLOBALIZATION

GLOBALIZATION

GLOBALIZATION

GLOBALIZATION But-Keep it in

Perspective!Most trade still

regional“Local” still

mattersFew global

brandsGlobal Influence-

mainly in big cities

GLOBALIZATION Cultural Assimilation is

most prevalentGlobalizatioGlobalization often n often results in a results in a melding of melding of foreign & foreign & domestic domestic product product forms & forms & functionsfunctions

GLOBALIZATION

Kentucky Fried Moose-Toronto

GLOBALIZATION

GLOBALIZATION

GLOBALIZATION

http://babelfish.altavista.com/: “I will explain it to you at Mcdo”

GLOBALIZATION 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

GLOBALIZATION Example: Cola Turka

Multinational corporations don’t always get their way

Local cultures respond on their own terms

GLOBALIZATION

Yet- Regardless of the citizens’ reaction to “foreign” products

Globalization is slowly but surely eroding the preeminence of the nation-state…

The implications of globalization for the future of the nation-state…

From Below: -- mounting sectarian pressures –

From Above: global communications, global economy, worldwide environmental repercussions

From Within: Multi/Trans-nationals own agendas- loyal to themselves,

play countries against each other

From W/out: Non-governmental Organizations

The Nation State – The Nation State – pressured from all sidespressured from all sides

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.

"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."

“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”…

2nd WavePowerSphere~Collapse

"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

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.

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

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.

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!

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?

Vid-Clip Outline:

• McDonald’s CSR progress (~5’)• Corporate Social Responsibility (~5’)• UN Global Compact-

o Timberland- (~10’)

o Frontline- The Persuaders - Segment (~15’)

o Toffler-2nd vs. 3rd Wave PowerSphere (~15’)