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Chapter
10
Marketing Strategy
Chapter 10
Social, Electronic Commerce,
and Global Considerations in
Strategic Market Planning
Chapter
Social Responsibility & Ethics
10
Issues
Definition
An organization's obligation to maximize
Social
Responsibility its positive impacts on society while minimizing
Ethics
its negative impacts.
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.
Chapter
10
Pyramid of Social Responsibility
Philanthropic
Responsibilities good corporate citizen
Ethical
Responsibilities do what is right
Legal Responsibilities obey the law
Economic Responsibilities be profitable
Chapter
10
Why include ethics and social responsibility
in the strategic market planning process
• 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.
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Incorporating Ethics and Social
Responsibility into Strategic Market Planning
• 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.
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10
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
Chapter
2-14
10
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).
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New Products for the Internet
• 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."
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10
Promotion on 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.
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New Channel’s of Distribution
• 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.
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Pricing on the Internet
• 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.
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10
Globalization
• 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.
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Levels of Strategic Involvement in
Global Marketing
• Importing and Exporting
Lowest
Commitment
• Trading Companies
• Licensing and Franchising
• Contract Manufacturing
• Direct Investment
• Joint Ventures
Highest
Commitment
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Approaches to adapting product and
promotion
• 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.
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Distribution
• 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.
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10
Price
• 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.