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BA635 Current Marketing Issues

The Bio & Power Spheres. BA635 Current Marketing Issues. 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

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BA635 Current Marketing Issues

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  1. The Bio & Power Spheres BA635 Current Marketing Issues

  2. 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

  3. -just as the sub-spheres of the BioSphere…

  4. Are interdependent…

  5. SOCIO POWER PSYCHO BIO INFO TECHNO So too are the spheres of our society… Wherein: Change in one sphere…. impacts all other Spheres…

  6. Accelerating & Intensifying That Interaction among Spheres

  7. 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

  8. 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

  9. Bio & Power-sphere Pressures on Today’s Corporation Power * Employment/ outsourcing; • Community/ Workplace BIO Corporate Psyche • Responsibility- obligation • Health & Quality-of-life • Responsiveness- action • Performance- results • Environment / Global Warming

  10. The 21st Century- Meta Convergence • Religious & Secular Groups • NGO’s- IMF, WTO, World Bank • Industry & Business Associations • Local, State & National Gov’t Agencies Consumer Activists Corporate, & activist – Shareholder organizations • Special Interest & Affinity groups

  11. META-CONVERGENCE The 3rd Wave’sRising Tide of Activism 60’s… 70’s… 80’s… 90’s

  12. META-CONVERGENCE The 3rd Wave’sRising 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

  13. 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

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

  15. Initially- Consumer & Eco Activists- generally came from niche segment of society • Upscale-SES • Liberal in Attitude & Lifestyle

  16. 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

  17. recycling rate of plastic soda bottles was ~1/3 of 1995 rate …. • single serve bottles on shelves - more then doubled to 18 billion … circa 2000… 70% of baby food buyers preferred convenience of plastic to glass jars

  18. Phillips billed it’s energy-saving bulbs as“EarthLight” & sales never materialized • Phillips repackaged & relaunched as convenient, seven yearMarathon bulbs • Sales went up 12% ….

  19. Today Eco- consciousness has become mainstream

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

  21. Consumer & Eco Activists-

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

  23. Doggedly Indifferent

  24. ~mid ’90’s

  25. 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

  26. Roper and Starch Product purchasing & consumption = #1 way-Americans act upon their environmental concerns

  27. And if the-Consumer cares ….Companies care

  28. 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.”

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

  30. “This is not bleeding-heart liberalism. • This is about managing risks in a challenging global context -- Equity analyst

  31. … 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…

  32. Most Important Thing a Company Can Do to Be Seen as Socially Responsible Source: Globescan 2005

  33. “ 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

  34. Stark Contrast w/ 2nd wave Mantra: The only business of business is business--Milton Friedman 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… …to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest."

  35. 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 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”*

  36. By 2002 • Just 2%still believed that the only business of business is business. Do more, say the peopleMurray ArmstrongMonday November 25, 2002

  37. 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? . . and 1 in 5 would be very willing to pay more Don’t know Very important Not important Fairly important - September 2000 - MORI

  38. Gen Y -- • 89% likely to switch brands if linked to cause • 83% trust company more if socially responsible • 79% want to work for company that contributes to society • 78% believe companies have responsibility for making a difference in the world • 74% 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

  39. 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

  40. Also the Company And Position Not just Product The New Competition

  41. Indeed- the monitoring of your Company’s Reputation & Social Responsibility has now been taken up by the United Nations…

  42. Regulation Global Compact Company Codes Created to fill the void… • A corporate social responsibility program • A multi-stakeholder platform • Based on principles: • Human Rights • Labour Conditions • Environment • Anti-Corruption • Universally recognized

  43. UN Corporate Responsibility Program Business Participation today • ~ 2000 Global, large domestic, SMEs • All business sectors • In Developed & developing world • 45 country networks

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