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									Guest lectures

Marketing and CSR/Ethics

     Hans Zahn
     Lecturer Marketing, Management & Organization
     School of Economics
     The Netherlands
     T. +31 (0)23 5412263
     E. hans.zahn@INHOLLAND.nl


   My professional background

   12 years experience as marketing professional at:
        •      The publishers IDG Communications Netherlands
               and Elsevier Health Science
        •      De Baak – Management Center VNO-NCW
        •      Weten Foundation; public understanding of science
               & technology
   3 years lecturing at INHolland School of Economics
       Why do I lecture marketing?

It is a subject area related to many different disciplines:

Economics                 > „homo economicus‟
Psychology                > Consumer Behavior
Statistics                > Market research
Communication Sciences > Promotion
Business Organization > Operationalising the 4 P's
Creativity                > Respond to irrational consumers
Contents lectures this morning

  - 1st Short introduction to marketing + view of Tex
  Gunning (CEO of Akzo Nobel)

  - 2nd Sustainable Marketing: Marketing Ethics and Social

  - 3rd CSR/ethics companies & marketing

Contents lecture 1

  - Introduction to marketing
  - Powerpoint presentation made by Tex Gunning (CEO of
  Akzo Nobel)

Action learning


What is marketing?
Form project groups of max 5 persons
Start a brainstorm (10 minutes)
The result of your brainstorm must be at least 15 aspects
that are related to marketing
Write these aspects on a paper and hand them over to me
if you are finished
Lecture 1

Introduction tomarketing

based on Philip Kotler

- Discuss core concepts of marketing
- See the evolution of marketing thought and discuss
  various orientations toward marketplace
- Focus on modern marketing concept, identify four pillars
  of modern marketing
- Describe 4Ps and 4C‟s of marketingmix
- Discuss modern marketing concept comparing it with
  selling concept
 What is Marketing?

Latest definition by Philip Kotler:

  Marketing is a social and managerial process by which
  individuals and groups obtain what they need and want
  through creating and exchanging value with others

  Marketing is managing profitable customer relationships
   •    Attracting new customers
   •    Retaining and growing current customers
Once again….

Marketing is
   •    Satisfying customer needs
   •    Meeting needs profitably
   •    Generating customer value at a profit

        Managing profitable customer relationships
        by delivering superior value to customers
What do they need?

 So marketing is….

No single correct definition or approach…
Common subject matters:

     •    The ability to satisfy customers

     •    The identification of favorable marketing opportunities

     •    The need to create an edge over competitors

     •    The capacity to make profits to enable a viable future for
          the organization

     •    The use of resources to maximize a business‟ market

     •    The aim to increase market share mainly in target markets
What the customer realy needs….
Core Concepts of Marketing

                      Needs, wants,
                      and demands

        Markets                            Products
                                          and services

         Exchange,                    Value and
       transactions,                  satisfaction
      and relationships
Core Concepts of Marketing

Anything that can be Offered to a Market to Satisfy a Need or Want

  Experiences                 Persons                   Places

 Organizations             Information                  Ideas

     Activities or Benefits Offered for Sale That Are Essentially
     Intangible and Don’t Result in the Ownership of Anything
Market Offerings - examples

                          Marketing places :
                          Creating positive attitudes or
                          maintaining attitudes &
                          behavior toward particular
Market Offerings - examples

                       Marketing products:

                       Replay Eye Wear
                       Connecting with lifestyle elements

Market Offerings- examples

                                 Marketing ideas
                                 (social marketing)
                                   This is the watch
                                   Stephen Hollingshead, Jr.
                                   was wearing when he
                                   encountered a drunk driver.
                                   Time of death 6:55 p.m.

                             “Friends Don’t Let Friends
                             Drive Drunk”
Core Concepts of Marketing

           Value Gained From Owning a Product and
               Costs of Obtaining the Product is
                     “Customer Value”

      Product’s Perceived Performance in Delivering Value
              Relative to Buyer’s Expectations is
                 “Customer Satisfaction”

    Total Quality Management Involves Improving the Quality of
           Products, Services, and Marketing Processes
Simple Marketing System


    Industry      Products/services      Market
  (a collection                       (a collection
    of sellers)                         of Buyers)

 Marketing Management

Marketing management the art and science of
choosing target markets and building profitable
relationships with them

  This definition must include answers to 2 questions:
  •   What customers will we serve?
  •   How can we serve these customers best?

 Marketing management involves managing demand,
involves managing customer relationships
Marketing and Sales Concepts Contrasted

     point       Focus       Means            Ends

                Existing   Selling and   Profits through
     Factory    products   promotion      sales volume

                 The selling concept
    Starting    Focus
     point                  Means           Ends

               Customer    Integrated    Profits through
     Market     needs      marketing       customer

               The marketing concept
Marketing Concept - The 4 P’s
Marketing Concept - The 4 P’s + The 4 C’s



Customer                                    Convenience
               Price            Promotion

        Customer Cost           Communication
Selling – Marketing...

                         “There will always be need for
                     some selling. But the aim of marketing
                   is to make selling redundant. The aim of
                      marketing is to know and understand
                    the customer so well that the product or
                     service fits him and sells itself. Ideally,
                     marketing should result in a customer
                               who is ready to buy.”
                                              Peter Drucker
Modern Marketing Concept

   Traditional Organization


                     Middle Management

                       Front-line people

Modern Marketing Concept

         Customer-Oriented Organization Chart


                  Front-line people

                Middle management

 Societal Marketing Concept

- Companies negative effects on society
- Conflicts between consumer wants and long-term social welfare
- Marketing managers should be concerned with social

  The societal marketing concept
     •     Company’s task is to determine needs and wants of target markets
           and to satisfy them more effectively and efficiently than
           competitors - in a way that preserves or enhances the consumer’s
           and society’s well-being
Societal Marketing Concept

                       (Human Welfare)


   Consumers                             Company
 (Want Satisfaction)                     (Profits)
Marketing Landscape change(d)

    Challenges             Growth of the Internet!

Digital age                Advances in
Globalization              - Information technology
Ethics and social
responsibility             -Customer research and tracking
                           -Product development
Not-for-profit marketing   -Distribution
                           -New advertising tools
                           -24/7 marketing through the Internet
Marketing relationships
Marketing Landscape

                           Geographical and cultural
Digital age                distances have shrunk:
Globalization              - Greater market coverage
Ethics and social          - More options for purchasing
responsibility              and manufacturing
Not-for-profit marketing   - Increased competition from

Marketing relationships      foreign competitors
Marketing Landscape

                      Marketers need to take
Digital age
                      great responsibility for
                      the impact of their
Ethics and social
Marketing Landscape

    Challenges               Many organizations are
                           realizing the importance of
Digital age                strategic marketing
Globalization                   •    Performing arts
Ethics and social               •    Government agencies

responsibility                  •    Colleges, Universities
                                •    Hospitals
Not-for-profit marketing
Marketing relationships
Marketing Landscape

                            Profits through managing
Digital age
                            long-term customer equity (value
Globalization               in the eye of the customer)

Ethics and social
responsibility             - Improve customer knowledge

Not-for-profit marketing   - Target profitable customers

Marketing relationships    - Keep profitable customers
Video Tex Gunning (CEO Akzo Nobel)

Contents lecture 2

  - Brainstorm (action learning)
  -Lecture CSR/Ethics

Lecture 2

   Sustainable Marketing: Marketing Ethics
   and Social Responsibility

  „Corporate Social Responsibility (CSR)
  also mentioned „Sustainable entrepreneurship‟
  or „Sustainability‟
  „Corporate social responsibility is the continuing
  commitment by business to behave ethically and
  contribute to economic development while improving the
  quality of life of the workforce and their families as well as
  of the local community and society at large‟

  Tripple P: People, Planet, Profit (prosperity)
CSR and People

People Domain
The companies performance on social-ethical themes
     •   How does the company treat its employees?
     •   What is achieved in the areas of social cohesion?
    •      Human rights
    •      Corruption and fraud
     •     Child Labor
     •     Man-Woman relationships
     •     Diversity and discrimination
     •     Employee councils
     •     Codes of conduct
     •     Social and ethical accounting
CSR and Planet

Domain Planet
The performance of the company in the
field of environment in the broadest sense
How a company addresses its responsibilities regarding the
taxation of the environment, nature and landscape
      Environmental issues
      Supply Chain
      Eco-efficiency (cleaner production, sustainable technology)
      Sustainable business
CSR and Profits (prosperity)

Domain Profit (Prosperity)
Not the pure financial performance include the company
It is more about economic issues
       Investments in infrastructure
       Location Policy
       Political involvement
       Economic impact of services and products
       Employee Participation
       Links Triple P and the financial performance of the company
CSR and Marketing

 Sustainable Marketing: Marketing
 Ethics and Social Responsibility
Learning Goals

  1. Know the major social criticisms of marketing
  2. Be able to define consumerism and
      environmentalism and know how they affect
      marketing strategies
  3. Learn the principles of socially responsible
  4. Learn the role of ethics in marketing
Case Study: Nike

•   Nike has been criticized       •   Nike took the charges seriously
    lately about NOT being             and commissioned a study of
    socially responsible               Nike factories abroad
•   Accusations of overseas        •   Nike donates more than $30
    sweatshops, child labor, and       million in cash and products to
    exploiting lower income U.S.       sports programs and 3% of
    families                           earnings to charity
                                   •   CEO Knight – “not sure how we
                                       measure good performance in
                                       corporate responsibility”
Social Criticisms of Marketing

Marketing‟s Impact on Individual Consumers
    •   High Prices
                  • High costs of distribution
                  • High advertising and promotion costs
                  • Excessive markups
Social Criticisms of Marketing

  Marketing‟s Impact on Individual Consumers
       •    Deceptive Practices (misleading)
                      • Pricing
                      • Promotion
                      • Packaging
       •    High-Pressure Selling
Social Criticisms of Marketing

  Marketing‟s Impact on Individual Consumers
       •    Shoddy or unsafe products (cheap stuff)
       •    Planned obsolescence (in-built aging)
       •    Poor service to disadvantaged consumers
Social Criticisms of Marketing

Marketing‟s Impact on Society as a Whole
    •    False wants and too much materialism
    •    Too few social goods
    •    Cultural pollution
    •    Too much political power
Social Criticisms of Marketing

  Marketing‟s Impact on Other Businesses
       •    Acquisitions of competitors
       •    Marketing practices that create barriers to entry
       •    Unfair competitive marketing practices
Actions to Regulate Marketing

       •   Traditional seller‟s rights
       •   Traditional buyer‟s rights
       •   Additional rights proposed by consumer advocates
Actions to Regulate Marketing

   •   An organized movement of concerned citizens,
       businesses and government agencies to protect and
       improve people‟s living environment
   •   Environmental Sustainability
               • Pollution prevention (C2O foothprint)
               • Product stewardship (concept whereby
                 environmental protection centers around the
                 product itself, and everyone involved in the
                 lifespan of the product is called upon to take up
                 responsibility to reduce its environmental impact)
                 >> Philips Africa
                • New environmental technology
                • Sustainability vision
Short video’s

  Companies have started to take their responsibilities

  Dove Self Esteem Fund

  Reaction Greenpeace
Contents lecture 3

  - CSR/ethics companies & marketing


- The focus on CSR/ethics illustrates an important shift in
thinking about entrepreneurs/managers, corporate
governance and business

- CSR highlights companies simultaneously from an
economic and a social dimension and that a unilateral
focus on profits or shareholders no longer sufficient in the
modern business environment
           Company CRS example

Coca-cola’s five strategic CRS focus areas and goals:
-   Water stewardship (the use of one liter water for one liter product – water

-   Sustainable packaging/recycling (maximize use of renewable, reusable,
    and recyclable resources, ultimately recycling the equivalent of 100% of our

-   Energy conservation/climate change (reduce carbon emissions)
-   Product portfolio/well-being (right product, right package, right moment)
-   Diverse and inclusive culture (sustainability trough employee commitment)

Source: Coca-Cola CSR report 2007

Company example

CSR commitments Dell 2008

-   Be the greenest technology company on the planet and the first
    computer company to achieve carbon-neutral operations by the end
    of 2008
-   Continue leadership with our climate strategy and global recycling
-   Partner with our customers in energy-efficiency and climate-protection
-   Broaden our Global Citizenship commitment
-   Recommit our efforts to improve sustainability governance
Source: Dell CSR report 2008
Financial crisis and CSR

Question: Is CSR always an extra cost factor?

Mr F. Briët, was member of executive board of Corus in 2001
  “Reasearch shows that companies with strong CSR/sustainability
  strategies do perform better than those without. With Corus I have
  seen that our margins were higher, in spite of a strict
  environmental policy, than our merging partner Brittish Steel.”

Financial crisis and CSR II

     “The financial crisis offers companies unprecedented
     chances if we are talking about investments in social
     innovation, to make organizations and consumption
     patrons more sustainable.”

   Pauline van der Meer
   Supervisory Boardmember ASML

Globa Corporate Companies unite

CSR reports

Business ethics

Changing social role of business:
- Limits of steering government in sight
- Increased deregulation calls on companies to
increase self regulation
- Globalization (increasing international business, also
brings responsibilities with it ....)
- Technological developments
- Democratization of moral authority (role church,
government, science background to be contacted)

                            Ethiek/MVO   H.Zahn

  What are ethics?
    - Difference between good and bad ...
    - Norms and values
    - Moral: acts and behavior in a social context
    as correct and desirable to be seen

                     Ethiek/MVO   H.Zahn

Ethics is based on the assumption that people are
  rational creatures are free to make choices
  - Are we really free?
  - What is freedom?
  - How far you lived?
  - What do we need to make free choices?
  - Freedom has to do with fear ...
  - Can we have a free choice if we are afraid to
  lose our jobs?

Definition Freeman
  Any party whose interests may be affected by the
  activities of the company, or even affect the interests
  of the company can exercise

Definition business ethics (moral justification)
  Each party owner whose interests may be affected by
  the activities of the company, or even affect the
  interests of the company owner may exercise

                          Ethiek/MVO   H.Zahn
Stakeholders Cadburyschweppes)
 Business ethics

  Key is social responsibility!

Important aspects:
  - Strategy: responding to social issues is
  increasingly a condition for continuity
  - Public Relations: external communication, image
  - Marketing: CSR as Unique Selling Point (USP)
  - Personnel: involvement of employees and company pride

                            Ethiek/MVO   H.Zahn
Acting Ethically

Can you do business with ethical conduct?

Profits are self-interest
Uh, oh yes there are others ....
Profit and Principles!

                            Ethiek/MVO   H.Zahn
Company example CRS/Ethics

 Nokia in China - a multinational inspection
 - Is it possible to make profits while acting ethically correct?
 - This question is becoming acute for western companies, especially
    when the production in low wage countries is made
 - Even the world's largest manufacturer of mobile phones Nokia is
    struggling with CSR
 - In the Nokia video two (female) inspectors are followed during their
    visit in a Chinese factory
 - They are trying to achieve the collision of Western values to with a
    European (UK) and a Chinese (male) director
Ethics & profits

   Bad examples:
   - Financial crisis (bonus focused Bank-system)
   - Madof (50 bilion of debts)
   - ENRON (greed in „optima forma‟)
   - Parmalat (robbed Italian pensioners)
   - Societé Generale (The bank of Jerome K.)

                      Ethiek/MVO   H.Zahn

           - Unilever is doing business in India
           -   Lifebuoy's handwashing awareness
               programme, Swasthya Chetna, is now
               the largest private hygiene education
               initiative in the world
           - Bides that Unilever changed the
               business model: by selling soap in
               one-time use sachets instead of big

The End…

Thanks for your attention!

PS. Consider studying at INHolland University 


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