What do these firms have in common?

1. What do these firms have in common?

2. 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

3. 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

4. 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

5. Right to be informed • Protect against fraudulent/misleading practices (need facts) • Puffery - ok

6. Right to be heard • Consumers can complain and express dissatisfaction. • Office of Consumer Affairs – direct you to appropriate government agency for further assistance.

7. Right to Choose • Variety of products (generic, etc.) • No monopolies • Competitive prices, good quality

8. Consumer Product Safety Commission This product was recalled when a risk of electrocution was discovered

9. 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

10. Social Responsibility • Management philosophy in which organizations engage in activities that have a positive effect on society and promote the public good.

11. 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

12. Muir Land Trust This organization works to save open spaces and to support environmental education programs

13. Cause Marketing • Strategy of joining forces with a not-for- profit organization to tackle a social problem • Straight donations to a charity

14. 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

15. Denny’s Denny’s shows a strong commitment to diversity in every aspect of its business

16. 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. 303,604,280World 6,655,851,16519:30 GMT (EST+5) Mar 10, 2008

17. Figure 3.2: Entering Foreign Markets

18. 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

19. 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

20. 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)

21. 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

22. 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)

23. People in Developing Countries

24. Cultural Environment Values Cultural Change Norms Ethnocentricity Language

25. Figure 3.4: Market Entry Strategies

26. 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

27. 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)

28. Toyota Corolla Iceland Toyota has selected its Corolla to be a world car that is sold in all markets from Egypt to Iceland

29. 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

30. Distribution Decisions

31. 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?

32. 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?