GB 490 Quiz Units 3 & 4
Tools of Moral Reasoning - Consequences
Actions have consequences. Most business theories assume that all consequences of a business decision can be measured in economic terms and with a cost-benefit analysis. The consequences of ethical issues are not always simple. Understanding both harms and benefits of business issues is critical to a balanced view of business ethics.
Principles of Stakeholder Capitalism - Complexity
Human beings are complex creatures/ capable of acting on multidimensional values/ some of which are selfish/ some of which are altruistic/ and many of which are jointly created and shared with others. Capitalism works because of this complexity and not in spite of it.
Milton Friedman's Ethical Ideas
He differed than the previous views with the idea that the only ethical obligation of a business is to maximize profits. He believed profits could be maximized within the constraints of law and ethical custom.
Promotion
A great product will not sell unless a firm is able to communicate the product's value. A successful promotional strategy involves the use of marketing tolls such as advertising and selling. The goal is to achieve clear and consistent communication to customers about brands and products/ carefully coordinated across channel members and media. The precise promotional tool depends on the firm's strategy. A sales promotion strategy can take the form of discounts/ coupons/ or incentives related to a purchase. A pull strategy involves communicating directly to customers. A push strategy uses channel partners for promotional and sales efforts. There are four stages to be aware of in the product life cycle: Introduction/ Growth/ Maturity/ and Decline.
Developing a Scientific Market Offering
After making broad strategic marketing decisions/ those guide further decisions about marketing offerings. The first is market segmentation/ dividing the full range of customers into groups based on key variables to the firm. The second is dividing into target market for the firm. Finally positioning offerings to consumers in a way that emphasizes the value to the customers.
Market Segmentation
Airlines/ for example/ may treat some of their frequent customers better than others. Ex. Difference in United vs. Southwest Sometimes they do not segment/ and choose to mass market. Fundamental to the strategy is recognizing that there are groups of customers who differ from groups of other customers.
Market Segmentation Benefits
Allows a firm to match the product or service to the most suitable customer. Provides an opportunity for a company to develop alternative channels of distribution to reach different kinds of customers in a more cost-efficient manner. Affords the firm a strategy for reaching neglected groups. Allows a firm to subsegment and focus its marketing efforts on a specific group. Helps define the customer universe because it enriches a firm's understanding of customer groups.
Adam Smith's Ethical Ideas
Books -The Wealth of Nations The Theory of Moral Sentiments - written about ethical obligations to one another. He believed that business and commerce worked well only if people took seriously their obligations and their sense of justice.
Principles of Stakeholder Capitalism - Continuous Creation
Cooperating with stakeholders and motivated by values/ people continuously create new sources of value. Capitalism works because the creative force is primarily continuous rather than primarily destructive.
Tools of Moral Reasoning - Rights
Duties, & Responsibilities, Values form the background against which other moral notions can be applied. As we value freedom and autonomy/ we define rights as a sphere of autonomy in which everyone can act equally. However/ rights are rarely absolute. Duties are obligations that we incur to take specific steps/ or to refrain from taking specific steps/ that are connected with the rights of others. Rights without duties are not useful. Duties without rights are not worth the trouble. Responsibility is a set of behaviors that we should engage in if the system of rights and duties is to be stable and useful. Rights/ duties/ and responsibilities play an important role in analyzing ethical issues in business.
What constitutes an ethical issue?
Ethical issues are usually concerned with: Rights and duties Principles such as fairness Harms and benefits
Ethical Relativism
Ethical relativism - the view that each person is the sole arbiter for right and wrong/ it prevents us from reasoning all together The real measure of ethics according to this idea is one's personal beliefs. It is a thoroughly discredited view but it does contain a grain of truth.
Place (Distribution)
Firms rarely single-handedly manufacture a good and take it to market/ selling directly to the consumer. Instead/ they rely on intermediaries in a marketing distribution channel for transport/ stock/ and redistribution of goods. Channel partners add value to a firm's offering not just through physical distribution/ but can also add value through services. Firms like to treat channel members as partners to the extent possible.
Fundamental Marketing Activities
First marketing refers to an expansive set of business processes and functions not limited to a single functional area within a firm. Second marketing seeks to build more than single-exchange relationships with customers. Third marketing is driven by customer needs and desires.
Principles of Stakeholder Capitalism - Emergent Competition
In a relatively free and democratic society/ people can create alternatives for stakeholders. Capitalism works because competition emerges out of the cooperation among stakeholders/ rather than being based on some primal urge of competition.
Careers in Marketing
Most careers in marketing follow the general understanding of adding value to the customer. Marketing careers can be brand or product managers/ advertising/ public relations/ etc.
Tools of Moral Reasoning - Values
Much of our thinking about ethical issues in business is based on our values. Values represent our desires and can be either good in themselves (intrinsic values) or a means to other ends (instrumental values). Provides a framework that serves as both the reasons for and the causes of many of our actions. Individuals have values that determine part of their behavior. It can help an organization and its members clarify what is important in the organization.
Tools of Moral Reasoning - Principles & Rules
Overtime we capture generalizations about right and wrong in the forms of morals rules or principles. Common morality is the set of principles that determine how we live most of the time. We learn it as children and they are reinforced in most of our social institutions. Business is no exception here and dilemmas can arise in several instances. A challenge to principles and common morality may arise when new groups become empowered in a society.
Principles of Stakeholder Capitalism - Stakeholder Responsibility
Parties to an agreement must accept responsibility for the consequences of their actions. When third parties are harmed/ they must be compensated or anew agreement must be negotiated with all of those parties who affected. It applies reciprocally to all stakeholders.
There are usually two levels of ethical issues:
Personal level Interpersonal or social level They usually appear simultaneously.
Delivering Customer Value
Positioning gives specific focus to a firm's strategic planning/ delivering value to customers through tactical decisions. These decisions are referred to as the four Ps: Product Price Place Promotion
Principle of Societal Responsibility
Principle of Societal Responsibility - a more modern view than the Carnegie ideas/ view that business has an obligation to act in the interests of society It has been used to justify many business actions. The idea is that business must see itself as a citizen in the community/ doing what it takes to make the community a better place.
Andrew Carnegie's Ethical Ideas
Separated business from ethics but brought social responsibility through philanthropy. Spencerian - those in whom the power of self-preservation is the greatest—are the select of their generation Outlined two ethics principles for business people: Charity principle - suggested more fortunate people in society should help those who are less fortunate by contributing to organizations designed to offer assistance Stewardship principle - from the Bible/ viewed the wealthy as holding their property in trust for society/ with the obligation to use it for legitimate societal purpose
Principles of Stakeholder Capitalism
Stakeholder capitalism takes a firm ethical stand that human beings are required to be at the center of any process of value creation/ that common decency and fairness are not to be set aside in the name of playing the game of business. It believes we are supposed to demand the best behavior of business.
Successful Marketing
Successful marketing efforts focus on satisfying customer needs. Advertising and sales are not the only aspects of marketing. Marketing takes good or services to the market successfully.
Targeting & Positioning
Target segments is the next step/ allowing firms to best satisfy/ or find segments that fit with the firm's overall strategy/ or the segments that will be most profitable in the future. Target segment choice is not typically obvious. The biggest segment may not always be the best. A segment selected may also not be the only one a firm expects to serve. After selecting the target market/ firms are ready for an important decision: how to position their product for the market. Positioning has been describe as the essence of marketing strategy and one of the most important decisions a marketer makes. A position is a mix of consumer attitudes/ background knowledge, and emotions that are part of consumers' psychological market space. A positioning strategy is chosen based on communicating value to customers. Positioning refers to against competition/ but sometimes firms intentionally produce products the overlap heavily with their own existing products/ referred to as cannibalization.
Marketing Defined
The American Marketing Association defines marketing as "the activity/ set of institutions/ and processes for creating/ communicating/ delivering/ and exchanging offerings that have value for customers/ clients/ partners/ and society at large." Informal definitions may include/ "creating lasting value for customers" or "where the inside of the firm meets the outside world."
Understanding Customers and the Market
The first stage of planning activities involves understanding customers and the overall market. The operative question is: "How can we add value for customers in the marketplace?" Strategic planning for the overall market requires assessing the firm's capabilities and evaluating the firm's place in the larger marketplace.
Price
The price the customer pays for a product involves its purchase price in monetary units. Price represents the only direct control over revenues that the firm can yield Pricing decisions should mesh with the firm's overall marketing strategy and goals.
Product
The value to the customer typically takes place in the form of a product or service. The tangible object is part of the overall product being offered. The larger offering/ not just tangible/ is the focus of marketing strategy and tactics in delivering value to customers.
Ethical Challenges to Business
There are numerous ethical issues managers must learn to deal with. Cross-cultural issues Competitiveness issues Everyday issues
A Method for Understanding Capitalism in Ethical Terms
To connect business and ethics we can begin by understanding that business can affect more than just shareholders/ also stakeholders. Much of the recent emergence of the strong movement of business ethics has stemmed from corporate scandals. Thoughtful executives understand great companies arise in part out of a shared sense of purpose among employees and management. They believe the choice between stockholders and shareholders is a false one.
Understanding Customers/ Competition/ & the Company
To deliver value to consumers/ the firm must have a thorough understanding of several groups of consumers - namely consumers its serves and those served by competitors currently or in the future. You must gain insight into satisfying their needs and their reasons for purchase and usage decisions. You can characterize consumer groups into demographic information. Competition can be classified as both direct and indirect. A final piece in the strategic marketing planning puzzle is an analysis of the firm itself - its capabilities and shortcomings.
Marketing Research
Understanding customers' needs and the market requires a complex mixture of information - from social and economic trends to customer decision processes/ competitor analysis/ and reflexive assessment of the firm. The complex properties of marketing information make marketing difficult/ therefore good marketing research is helpful. It can ask questions to find value for the customer as well as how the firm's offerings are relative to competitors. Market research data comes from sources both internal and external to the firm. Techniques of market research vary widely. The greatest difficulty is often not in collecting information/ but in managing the high volume of information without jumping to conclusions.
Principles of Stakeholder Capitalism - Stakeholder Cooperation
Value is created because stakeholders can jointly satisfy their needs and desires. Capitalism works because entrepreneurs and managers put together and sustain deals with stakeholders/ rather than becoming agents of the owners of capital.
Tools of Moral Reasoning - Parallel Cases
We turn to parallel cases when we are faced with an ethical dilemma in which principles conflict/ where there are uncertain consequences and where values and rights don't clearly help us to find the answer. We need to look for clear cases to understand and reason from those cases for the ones that are similar but less clear.