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BA635 BA635 Current Marketing IssuesCurrent Marketing Issues
The Bio & Power The Bio & Power SpheresSpheres
Spheres interact…. Change in one sphere….Impacts other Spheres
BIOBIOPSYCHO
TECHNO
POWERSOCIOSOCIO
INFO
Our semester’s journey thru the spheres… ends w/ speculation on nature & determinants of current state of affairs: Re: Bio & Power Spheres
….Implications- business & marketing
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
• Instead of the single Economic-"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
The Henry Ford Philosophy: “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”
Stark Contrast w/ 2nd wave
The only business of business is business--Milton Friedman
The only business of business is business--Milton Friedman
…to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest."
…to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest."
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…
New Millennium … no longer…
BIOBIO
PSYCHO
TECHNO
POWER
SOCIOSOCIO
INFO
Issue= Environment’l
Movement >> a
result of Boomer
concern for
Pollution/product
safety …. Expanded
to workplace &
community (CSR ) >>
Ramification =
Mrktg 3.0
The 3rd Wave’s Rising Tide of Activism
1965- Unsafe at Any Speed- Nader 1969- April 22nd= Earth Day 1970 - EPA 1980s Social investing becomes
significant 1990’s- activists begin use of
shareholder resolutions targeted at specific corporate practices
META-CONVERGENCE
By 2002
Just 2% still believed that the only business of business is business.
Do more, say the people
Murray ArmstrongMonday November 25, 2002
“
70% of global investment managers surveyed believe that integrating environmental, social and governance issues into Corp-analysis will become mainstream in 3-10 years” --
Mercer Consulting, 2005
… 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…
Gen Y --89% likely to switch brands if linked to cause83% trust company more if socially responsible79% want to work for company that contributes to society78% believe companies have responsibility for making a
difference in the world74% 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
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
BIOBIO
PSYCHO
TECHNO
POWER
SOCIOSOCIO
INFO
Issue= Environment’l
Movement >> a
result of Boomer
concern for
Pollution/product
safety …. Expanded
to workplace &
community (CSR ) >>
Ramification =
Mrktg 3.0
Also the CompanyAlso the Company
The New CompetitionThe New Competition
And PositionAnd Position
Not just Product
TodayAltho: Has been significant Uptick in
Eco- consciousness …
Roper Starch Worldwidehas Profiled Green Consumer segments since
the 1990’s
Shift in 1 decade:
1996 2007
True Blues- activists
10% 30%
Green-Backs- Purchase only
5% 10%
Sprouts- recycle, buy id price right
33% 26%
Grousers- Corp prob not theirs
15% 15%
Apathetics- DK & Don’t care
37% 18%
Upscale-SESUpscale-SES Liberal in Liberal in
Attitude & Attitude & LifestyleLifestyle
Consumer & Eco Activists- remain niche segment of society
Today--- U.S. ~ dead last in Eco-ConscienceSeptember 28, 2010
The U.S. ranks the U.S. 24th out of 25 markets around the world in environmental cynicism nations in the world with only 62% believing that environmental pollution is a serious issue
Approximately two in three Americans perceive green products to be too costly …
33% believe they don’t work as well as “regular” products (41% in 2002)
GfK Roper Green Gauge Report: http://goodandgreen.wordpress.com/2010/09/28/1100/
Phillips billed it’s energy-saving bulbs as “EarthLight” & sales never materialized
Phillips repackaged & relaunched as convenient, seven year Marathon bulbs
Sales went up 12% ….
The Power-Sphere -- authority allocated thru formal &
informal political institutions
The Power-Sphere -- authority allocated thru formal &
informal political institutions
BIOBIO
PSYCHO
TECHNO
POWER
SOCIOSOCIO
INFO
Environ’tl issue= post Ind.shift in Political focus …away from Labor …which in decline…due to Globalization & automation (result of tech adv. in info & dist) + proliferation of media- allows deregulation>> which results in polarization of news>>served to a Divided electorate ( set adrift by crack-up of 2nd wave work/home; divided along racial/religious lines) = collapse of consensus; consolidation of political power & wealth
Political Organizations shift:
PowerSphere:
60s, as labor unions begin decline, liberal $$ & energy starts to flow strongly toward "postmaterialist" issues: civil rights, feminism, environmentalism, gay rights, etc. These SIGs take over the Democratic Party during the subsequent decades.
•crookedtimber.org/.../review-jacob-hacker-and-paul-pierson-winner-take-all-politics•Here's What's the Matter With Kansas — By Kevin Drum | Fri Sep. 10, 2010
At same time, business interests take stock of country's anti-corporate mood – pool resources & push generic pro-business policies Conservative think tanks start to press a business-friendly agenda and organizations like the Chamber of Commerce start to fundraise on an unprecedented scale… registered lobbyists in Washington grew from 175 in 1971 to nearly 2,500 in 1982
From Below:
-- mounting pressures –un/under-employed
From Above:
global communications, global economy, worldwide environmental repercussions
From Within: Multi/Trans-nationals own agendas- loyal to themselves,
play countries against each other
From W/out: Non-Governmental Organizations
The Nation State – The Nation State – pressured from all pressured from all
sidessides
Circumstances differ from country to country…
but what does not differ is the revolutionary challenge posed by the 3rd Wave…
…to obsolete 2nd Wave institutions –
…too slow to keep up w/ the pace of change &... to cope w/ new levels of social & political diversity.
Circumstances differ from country to country…
but what does not differ is the revolutionary challenge posed by the 3rd Wave…
…to obsolete 2nd Wave institutions –
…too slow to keep up w/ the pace of change &... to cope w/ new levels of social & political diversity.
"As we race into the Third Wave era, those of us who want to expand human freedom will not be able to do so by simply defending our existing institutions.
We shall -- like America's founding parents two centuries ago -- have to invent new ones."
"As we race into the Third Wave era, those of us who want to expand human freedom will not be able to do so by simply defending our existing institutions.
We shall -- like America's founding parents two centuries ago -- have to invent new ones."
“In all likelihood it will require the radical overhaul –or even scraping-of:
Congress, Politburos, Houses of Common & Lords, Bundastags, Diets…
The giant ministries and entrenched civil service… and systems—
In short all the unwieldy & unworkable apparatus of supposedly representative governments”…
“In all likelihood it will require the radical overhaul –or even scraping-of:
Congress, Politburos, Houses of Common & Lords, Bundastags, Diets…
The giant ministries and entrenched civil service… and systems—
In short all the unwieldy & unworkable apparatus of supposedly representative governments”…
2nd WavePowerSphere~Collapse
2nd WavePowerSphere~Collapse
"As the Second Wave produced a mass society, the Third Wave de-massifies us,………. moving the entire social system to a much higher level of diversity & complexity.
This revolutionary process, much like the biological differentiation that occurs in evolution, helps explain one of today's most noted political phenomena - the collapse of consensus."
Toffler, The Third Wave, p. 408
Toffler, The Third Wave, p. 410
the collapse of consensus
In 2nd Wave society a political leader could glue together half a dozen major blocs, as Roosevelt did in 1932, …..& expect the resulting coalition to remain locked in position for many years.
(New Deal) Party System (1932-1968)
Democrats vs. Republicans(agrarian, labor/ ethnic/urban) (commercial- business
& industrial-mgt.)
…..class based politics New Deal vs. anti-New Deal
origins of mass media campaigns….
Toffler, The Third Wave, p. 410
the collapse of consensus
Today it is necessary to plug together hundreds, even thousands, of tiny, short-lived special interest groups… that cleave together just long enough to elect a president, then break apart again the day after the election, leaving him without a base of support for his programs
Party System (1972-2000)
Democrats vs. Republicans “liberals” “conservatives”
pro-New Deal remnant anti-New Deal remnant(great majority of non-whites) (majority of whites)
rise of social/cultural issues- CULTURE WARS rise of candidate-based PRIMARIES- migration of white Southerners from Dem ==> Rep era of divided government (Rep. Presidents vs. Dem. House)
Party System (2000 - ???)
Democrats vs. Republicans “blue states” - “red states” -coastal America middle Americasecular America religious America
(great majority of non-whites) (majority of whites)
increased turnout dominance of social/cultural issues solidification of “solid Republican South” (Cong. + Pres.) strengthened party identification in electorate greatly strengthen party unity in Congress extremely close Pres. elections–W% pop v= 49%,51%,53%...
What-happens to the very notion of
'representative democracy?'
The elected representative cannot represent the
general will..
for the simple reason that there is none!
In a de-massified society, we not only lack national purpose, we also lack regional, statewide, or
city-wide purpose. ...
In a mass industrial society, when people and their needs were fairly uniform and basic, consensus was an attainable goal.
In a mass industrial society, when people and their needs were fairly uniform and basic, consensus was an attainable goal.
PowerSHIFT 3.0
The subsequent character & contours of the power-
sphere…..
That brings us to our current state of affairs….
Simultaneous: Proliferation of
Channels of Communication&
Deregulation of oversight &
Consolidation of ownership &
Polarization of viewpoint
InfoSphere:
In 1987-FCC abolished the Fairness Doctrine
FCC Chairman Mark S. Fowler, a communications attorney -served on Ronald Reagan's presidential campaign staff -was appointed by Reagan to head the FCC
The commission began to repeal parts of Fairness Doctrine, announcing in 1985 - the doctrine hurt public interest & violated free speech rights
Telecommunications Act- 1996
•Lifted limit station ownership The cap had been set at 40.. now-Clear Channel, with 1,200+
•eased cable-broadcast cross-ownership rules….now 90% of the top 50 cable stations are owned by the same parent companies
•extending term broadcast license from 5 to 8 years, made more difficult for citizens to challenge license renewals
After the FCC ruled in Murdoch's favor, stating his ownership of Fox was in the best interests of the public
In 1995, Murdoch's Fox Network became the object of FCC scrutiny --when it was alleged that News Ltd.'s Australian base made Murdoch's ownership of Fox illegal…
1996, Murdoch entered cable news market w/ the Fox News Channel
With unions in decline and political campaigns becoming ever more expensive.. …Democrats decide need be more business friendly
“We think of the Democratic Leadership Council backlash of late '80s & '90s as being mainly abt culture-war issues , crime & welfare , big govt…
….but it was also a reaction by Southern & business-friendly Dem’s who wanted party to join forces w/ the rich…. not oppose them….
As unions decline, the more Democrats turn to corporate funding to survive….
The sources of American economic inequality are largely political –
the result of deliberate political decisions to shape markets in ways that benefit the already-privileged at the expense of a more-or-less unaware public
….downplays the importance of electoral politics….. in favor of focus on policy-setting, institutions, and organization.
New America Foundation Lecture
… Repealed the Glass–Steagall Act of 1933
--- effectively removed separation that previously existed between Wall Street investment banks and depository banks ---has been blamed -for exacerbating the damage caused by the collapse of the subprime mortgage market that led to the Financial crisis of 2007–2010.
November 12, 1999 Gramm–Leach–Bliley Act
PowerSphere ShiftTax cuts for “the Rich” ..not going for investment in US labor or production…America's biggest investors are also going abroad to get a better ROI
…in fast-growing China, India, Brazil, giant American corporations are racking up sales. They're producing with & selling to Asian & Latin American consumers everything from cars and cell phones to fancy Internet software and iPads
49% of the S&P 500 biggest corporations are now doing more than 60 % of their business abroad….
The Rich get Richer The richest 1 percent of Americans now take home
~ 24 % of income, up from ~9 percent in 1976.
From 1980 to 2005, more than 4/5’s of total increase in American incomes went to richest 1%
1965 1972 1978 1989 1997 2000 2007From Mishel, et. al. The State of working America, 2008-09, Figure 3AE
Ratio of Average CEO to Average Worker pay, 1965-2007
C.E.O.’s of largest American companies earned 42 --in 1980, but 531 times - in 2001
Growth of intense poverty:Growth of intense poverty:% of poor living below half of % of poor living below half of
the poverty linethe poverty lineTop 74 individuals wealth =
bottom 19 million
The Poor get Poorer…
6%16% 21%
29%
80%
228%
0%
50%
100%
150%
200%
250%
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
Poorest fifth
Second fifth
Middle fifth
Fourth fifth
Richest fifth
Top 1 Percent
1979
2005
Percent Change
Source: Congressional Budget Office, Effective Federal Tax Rates, 2007.
Average Income (After taxes; 2005 dollars)
‘50-’80 up $13k‘80-’08 up $303
125,000 net new jobs are needed just to keep up with the growth of American labor force. ..the American economy has lost 15 million jobs since the start of the Great Recession. If add in growth of labor force -- including everyone too discouraged to look for a job - we're down ~ 22 million.