Ethics and Global Marketing Lecture three: Ethics and Delivering Customer Value across Global Markets Business perspective three: • Intents, means and ends – When formulating marketing campaigns, marketers are responsible for: • The intent of the action • The means or method by which the practice was implemented • The end or outcomes of the strategy or tactic Did Hyundai go too far? The proportionality framework • Adapted from Garrett (1966) – The principle of proportionality: • Marketers are responsible for whatever they intend as a means or an end. If both are 'good', they may act, accepting a certain (i.e. minor) risk of side effects. The marketing concept • Segmentation • Targeting • Positioning High price Harrods Delicatessens Marks & Spencer Convenience stores Narrow range Tesco Wide range Market stalls Discount stores Low price Marketing mix • • • • • • • Product Price Place People Physical evidence Process Promotion Vaseline example Ethical product challenges Ethical pricing challenges Ethical pricing challenges Ethical place challenges • Whose responsibility? • The government and the retailers? • http://www.bbc.co.uk/news/uk-politics-21388628 • Individuals? • http://www.bbc.co.uk/news/uk-21392004 • The supply chain? • http://www.bbc.co.uk/news/uk-21394451 Ethical people challenges Non-ethical physical evidence • Fake bomb detectors: • http://www.bbc.co.uk/news/uk-22279095 Ethical promotional challenges Word-of-mouth communications CUSTOMER Personal needs Past experience Expected service Gap 5 Perceived service Service delivery PROVIDER Gap 4 Gap 3 External communications to customers Service quality specifications Gap 1 Gap 2 Management perceptions of customer expectations Service Quality Framework ABC model of consumer attitudes • Affect • Behaviour • Cognition Purchase decision making framework Essential components of culture • Beliefs – Mental and verbal processes that reflect our knowledge and assessment of products/services. • Values – Indicators consumers use as guides for what is appropriate behaviour. – Usually enduring and widely accepted within the market. Essential components of culture • Customs – Overt modes of behaviour that constitute culturally approved or acceptable ways of behaving in specific situations. – Customs are evident at major events in one’s life, e.g. birth, marriage, death, and at key events in the year, e.g. Christmas, Easter, Ramadan. Layers of culture • Like an onion (Lee and Carter, 2012) – National culture – Business culture – Organisational culture – Individual culture Layers of culture • Hofstede (2003) – National level – Regional / ethnic / religious / linguistic affiliation level – Gender level – Generation level – Social class level Contextual continuum of culture High Japanese Arabs Latin Americans Italians/Spanish Context French English North Americans Scandinavians Low Source: Usiner et al (2005)) Germans Swiss Explicit Messages Implicit Hofstede’s criteria (2001) • Individualism – Affects the way people live together • Power distance – Dealing with human inequality • Uncertainty avoidance – Managing future uncertainty • Masculinity – Male / female stereotyping • Time orientation/Confucian dynamism – Long-term or short-term orientation Danish Culture – According to Geert Hofstede Very low power distance Quite high individualism Very low ”masculinity” – more ”feminine” values Very low uncertainty avoidance Business culture traits: - Quite informal, relaxed - Punctuality is very important - A very direct, no-nonsense communication (may be considered rude) - High gender equality - Not too flashy dress-code Source: www.geert-hofstede.com In a European context the Danish culture differs from being more ”feminine” and with a very low power distance compared to other European countries. But in a global context the contrasts are even bigger. This can be risky in dealing with e.g. China. A viral marketing campaign gone horribly wrong… side 26 Self-reference criterion • The process of gaining empathy within an international country market requires: • Cultural empathy – The ability to place yourself in the position of a buyer from another country. • Neutrality – The ability to identify the differences that exist without making value judgements about ‘better’ or ‘worse’ cultures. – The focus should be placed on differences rather than superiority. Assumptions to be questioned by international marketing managers • The consumer buying process is consistent across cultures – consumer involvement – perceived risk – cognitive style Cultural tightness-looseness • Refers to the extent to which an individual shows strong adherence to social norms and whether severe sanctions are imposed on those who deviate from these norms. (Gelfand, Nishii, and Raver, 2006) Ethics and Global Marketing Lecture three: Ethics and Delivering Customer Value across Global Markets Tutor: Giovanna Battiston email@example.com Activity Congratulations! You have just graduated from university and you have been offered an interview with Starbucks for a position as Marketing Officer at their head office in the US. To prepare for the interview you have been asked to deliver a 20-minute presentation in response to the following question: 'Evaluate the reasons why Starbucks has been unsuccessful in demonstrating its ethical and environmental credentials and outline the marketing measures the company could undertake to increase awareness of its CSR activities.'