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

That Interaction among Spheres

Accelerating &

Intensifying

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 Eco-Activism

META-CONVERGENCE

60’s… 70’s… 80’s… 90’s

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 2000- Shareholders put $2 trillion in socially responsible options

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…

Source: Globescan 2005

Most Important Thing a Company Can Do to Be Seen as Socially Responsible

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

~mid ’90’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

Contributing to Decline in labor unions- Globalization/outsourcing & automation…

….Globalization also redefining the role & preeminence of the nation-state…

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….

As the Dem party's coffers grew, its allegiance to the

working & middle class declined

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

Concomitant w/ political polarization

…. is economic divergence

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.

United States has a more unequal distribution of wealth than Bangladesh, Egypt, Libya, Tunisia & Yemen

http://www.nytimes.com/2010/11/07/opinion/07kristof.html?_r=1

GINI