- MKTG 351-A: Week 41. Chapter 3: Ethicsa. Pre-convention Morality: Child like behaviori. No care for who gets hurt. b. Conventional Morality: expectations of societyi. Rationalizing our behavior c. Post-conventional Morality: Never break the rules regardless. i. Follow the rules more than most people.ii. Straight arrow behaviord. Ethical Decision Makingi. What Is the extend of the ethical problems within the organizationii. Top management actions are Ethical?iii. Potential Magnitude of the Consequences1. Corporate embarrassment: Big stock price hits.iv. Social Consensusv. Probability of an harmful outcomevi. Length of time between the decision and the onset of consequences1. Don’t wait to long to enforce rules, you establish normalcy if you do not act quicklyvii. Number of people you will be affected.e. Ethical Guidelinesi. Guideline to help marketing managers and other employees make better decisions. f. Foreign Corrupt Practices Act (FCPA): enacted by Congress, prohibits US corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries. i. Illegal to bribe for personal gain or corporate gain.g. Corporate Social Responsibility: business’s concern for society welfare. i. Pyramid of Corporate Social Responsibility1. Philanthropic Responsibilities2. Ethical Responsibilities3. Legal Responsibilities4. Economic h. Sustainabilityi. Viewing the worlds’ social problems and viewing them as opportunities to build profits and help the world at the same time. ii. Social Responsibility is a growing trend.i. Cause-related Marketingi. Any marketing effort for social and or charitable causes that increases brand awareness2. Chapter 4: Marketing Environmenta. Environmental Management: company implements strategies that attempt to shape the external environment within which it operates. i. Factors within:1. Sociala. Values (country specific), work ethic, 2. Demographic3. Economic4. Technological5. Political6. Legal7. Competitiveii. Important for understanding corporate decision making; important in staying ahead of competition. b. American Valuesi. Self-sufficiencyii. Upward Mobilityiii. Work Ethiciv. Conformityc. 1975 workplace changed, as we know it, women entering the workforce. i. Huge increase in household income.ii. Increase in Retail Market: Women now have money to go shoppingiii. Divorce rate increases1. Single member householdsiv. Openly Gay Couplesd. Component Lifestyles: the way people decide to live their lives. e. Demographic Factorsi. Populationii. Tweensiii. Teens1. Shopping has become a social occasioniv. Generation Y (born between 1979-1994)v. Generation X (born between 1965-1978)1. Aprox. 40 millionvi. Baby Boomers (born between 1946-1964)1. Aprox. 75 millionf. Economic Factorsi. Consumers’ Incomesii. Purchasing Power: comparing income to the relative costs of a standard set of goods and services in different geographic areas (Cost of living).iii. Inflation1. Oil; uncontrollable price, constantly increasing. iv. Recessiong. Technological Factorsi. Research1. Basica. Learning about topics, such as high energy physics2. Applieda. Attempts to develop new or improved products, b. Research applied to a specific product.ii. Political and Legal Factors1. Business needs government regulation to protect innovators of new technology, the interests of society ingeneral, one business from another and consumers. a. Smog in Beijing 2. Primary US Laws Protecting Consumersa. Federal Food and Drug Act of 1906b. Federal Hazardous Substance Act of 1960c. National Environmental Policy Act of 1970i. Dealt with issues of air pollutiond. Child Protection and Toy Safety Act of 1969i. Kennedy’s attempt to save children. h. Consumer Privacyi. Competitive Factors3. Chapter 5: Developing a Global Visiona. Importance of Global Marketingi. GDPb. Impact of Trade and Globalizationi. Millions of Americans have lost jobs due to imports, productionshifts abroad, or outsourcing of tech jobs. Some find new jobs, but they often pay lessii. Millions of others fear losing their jobs, especially at those companies operating under competitive pressure.iii. Employers often threaten to outsource jobs if workers do not accept pay cutsiv. Service and white-collar jobs are increasingly vulnerable to operations moving offshore. c. Multinational Firmsi. A company that is heavily engaged in international trade, beyond exporting and importing without regard to the country in which its headquarters is located. 1. Capital intensive d. Global Market Standardization: All products in same language, format,pricing, currency.i. Does NOT exist.ii. Global Harmonyiii. Multi-domestic Strategy: multinational firms enable individual subsidiaries to compete independently in domestic markets.e. External Environment Faced by Global Marketersi. Cultureii. Economic Factors: Democracy, Dictatorshipiii. The Global Economy1. Doing business in China India: Huge Economic Potentialiv. Political Structure1. Legal Structures to either limit or encourage trade.2. New trade Organization: World Trade Organization (WTO)3. North American Free Trade Agreement (NAFTA) a. Main impact: open the Mexican market to US companies. 4. World Bank: Offers low interest loans to developing nations.v. Global Make-up1. Demographic Makeup2. Natural Resourcesvi. Global Marketing By the Individual Firm. 1. Risk Levels For Five methods of entering the global marketplace. (Exhibit 5.3)vii. Pricing1. Counter Trade: all of part of the payments for goods or services in the form of other goods or services2. Exchange Rates3. Floating exchange ratesa. Dumping b. Counter tradeviii. Impact of the Internet1. “Going global” is easier than it has ever been