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The Bio & Power Spheres BA 635 Current Marketing Issues The Bio & Power Spheres BA 635 Current Marketing Issues

Spheres interact…. Change in one sphere…. Impacts other Spheres SOCIO POWER PSYCHO BIO INFO Spheres interact…. Change in one sphere…. Impacts other Spheres SOCIO POWER PSYCHO BIO INFO TECHNO

Our semester’s journey thru the spheres… ends w/ speculation on nature & determinants of 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 That Interaction among Spheres Accelerating & Intensifying

Meta-convergence: “the tightening of connections among spheres that have hitherto been more independent” 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…“

 • Instead of the single Economic- • 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

The Henry Ford Philosophy: Stark Contrast w/ 2 nd wave ¡ ¡ ¡ “Business The Henry Ford Philosophy: Stark Contrast w/ 2 nd wave ¡ ¡ ¡ “Business is not designed/staffed/equipp ed 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

New Millennium … no longer… The only business of business is business--Milton Friedman A New Millennium … no longer… The only business of business is business--Milton Friedman 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… …to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest. "

Issue= Environment’l BIO Movement >> a result of Boomer SOCIO concern for Pollution/product PSYCHO Issue= Environment’l BIO Movement >> a result of Boomer SOCIO concern for Pollution/product PSYCHO safety …. Expanded POWER to workplace & community (CSR ) >> Ramification = TECHNO INFO Mrktg 3. 0

The 3 rd Wave’s META-CONVERGENCE Rising Tide of Eco-Activism 60’s… 70’s… 80’s… 90’s The 3 rd Wave’s META-CONVERGENCE Rising Tide of Eco-Activism 60’s… 70’s… 80’s… 90’s

The 3 rd Wave’s META-CONVERGENCE Rising Tide of Activism ¡ ¡ ¡ 1965 - The 3 rd Wave’s META-CONVERGENCE Rising Tide of Activism ¡ ¡ ¡ 1965 - Unsafe at Any Speed. Nader 1969 - April 22 nd= Earth Day 1970 - EPA 1980 s Social investing becomes significant 1990’s- activists begin use of shareholder resolutions targeted at specific corporate practices

By 2000 - Shareholders put $2 trillion in socially responsible options By 2000 - Shareholders put $2 trillion in socially responsible options

By 2002 ¡Just 2% still believed that the only business of business is business. By 2002 ¡Just 2% still believed that the only business of business is business. Do more, say the people Murray Armstrong Monday November 25, 2002

“ 70% of global investment managers surveyed believe that integrating environmental, social and governance “ 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 … 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…

Most Important Thing a Company Can Do to Be Seen as Socially Responsible Source: Most Important Thing a Company Can Do to Be Seen as Socially Responsible Source: Globescan 2005

¡ Gen Y -- 89% likely to switch brands if linked to cause l ¡ Gen Y -- 89% likely to switch brands if linked to cause l 83% trust company more if socially responsible l 79% want to work for company that contributes to society l 78% believe companies have responsibility for making a difference in the world l 74% more likely to pay attention to a company’s overall messaging when they see that company has deep commitment to cause they care about l 69% consider companies’ CSR reputation when deciding where to shop l 61% feel personally responsible for making a difference in the world l 56% would refuse to work for an irresponsible Source: corporation 2006 Cone Millennial Cause Study l

Generation Y Workforce ¡ 97% believe companies should offer employees opportunities to volunteer ¡ 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 Deloitte’s 2007 Volunteer IMPACT Study opportunities to

Issue= Environment’l BIO Movement >> a result of Boomer SOCIO concern for Pollution/product PSYCHO Issue= Environment’l BIO Movement >> a result of Boomer SOCIO concern for Pollution/product PSYCHO safety …. Expanded POWER to workplace & community (CSR ) >> Ramification = TECHNO INFO Mrktg 3. 0

The New Competition Also the Company And Position Not just Product The New Competition Also the Company And Position Not just Product

Today Altho: Has been significant Uptick in Eco - consciousness … Roper Starch Worldwide Today Altho: Has been significant Uptick in Eco - consciousness … Roper Starch Worldwide has Profiled Green Consumer segments since the 1990’s

~mid ’ 90’s ~mid ’ 90’s

Shift in 1 decade: 1996 2007 True Bluesactivists Green-Backs - Purchase only Sprouts- 10% Shift in 1 decade: 1996 2007 True Bluesactivists Green-Backs - Purchase only Sprouts- 10% 30% 5% 10% 33% 26% 15% recycle, buy id price right Grousers. Corp prob not theirs

Consumer & Eco Activistsremain niche segment of society Upscale. SES ¡ Liberal in Attitude Consumer & Eco Activistsremain niche segment of society Upscale. SES ¡ Liberal in Attitude & Lifestyle ¡

Today--- U. S. ~ dead last in Eco-Conscience September 28, 2010 The U. S. Today--- U. S. ~ dead last in Eco-Conscience September 28, 2010 The U. S. ranks the U. S. 24 th 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) ¡

l Phillips billed it’s energy-saving bulbs as “Earth. Light” & sales never materialized l l Phillips billed it’s energy-saving bulbs as “Earth. Light” & sales never materialized l Phillips repackaged & relaunched as convenient, seven year Marathon bulbs l Sales went up 12%

The Power-Sphere -- authority allocated thru formal & informal political institutions The Power-Sphere -- authority allocated thru formal & informal political institutions

BIO SOCIO PSYCHO POWER TECHNO INFO Environ’tl issue= post Ind. shift in Political focus BIO SOCIO PSYCHO POWER TECHNO 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 mediaallows deregulation>> which results in polarization of news>>served to a Divided electorate ( set adrift by crack-up of 2 nd wave work/home; divided along racial/religious lines) =

Power. Sphere: Political Organizations shift: 60 s, as labor unions begin decline, liberal $$ Power. Sphere: Political Organizations shift: 60 s, as labor unions begin decline, liberal $$ & 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. At same time, business interests take stock of country's anticorporate 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 • 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

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

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

The Nation State – pressured from all sides From Above: global communications, global economy, The Nation State – pressured from all sides From Above: global communications, global economy, worldwide environmental repercussions From W/out: Non. Governmental Organizations From Within: Multi/Transnationals own agendas- loyal to themselves, play countries against each other From Below: -- mounting pressures –un/under-

Circumstances differ from country to country… but what does not differ is the revolutionary Circumstances differ from country to country… but what does not differ is the revolutionary challenge posed by the 3 rd Wave… …to obsolete 2 nd 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. "

“In all likelihood it will require the radical overhaul –or even scraping-of: ¡ ¡ “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”…

2 nd Wave Power. Sphere~Collapse ¡ 2 nd Wave Power. Sphere~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

the collapse of consensus ¡ In 2 nd Wave society a political leader could the collapse of consensus ¡ In 2 nd Wave society a political leader could glue together half a dozen major blocs, as Roosevelt did in 1932, …. . & expect the resulting coalition to Third Wave, p. 410 Toffler, The

(New Deal) Party System (19321968) Democrats Republicans (agrarian, labor/ ethnic/urban) (commercialbusiness vs. industrial-mgt. ) (New Deal) Party System (19321968) Democrats Republicans (agrarian, labor/ ethnic/urban) (commercialbusiness vs. industrial-mgt. ) …. . class based politics New Deal vs. anti-New Deal &

the collapse of consensus ¡ Today it is necessary to plug together hundreds, even 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 Toffler, The Third Wave, p. 410 base of support for his

Party System (1972 -2000) Democrats vs. “liberals” pro-New Deal remnant (great majority of non-whites) Party System (1972 -2000) Democrats vs. “liberals” pro-New Deal remnant (great majority of non-whites) ¡ ¡ Republicans “conservatives” anti-New Deal (majority of rise of social/cultural issues- CULTURE WARS rise of candidate-based PRIMARIESmigration of white Southerners from Dem ==> Rep era of divided government (Rep. Presidents vs. Dem. House)

Party System (2000 - ? ? ? ) Democrats vs. “blue states” coastal America Party System (2000 - ? ? ? ) Democrats vs. “blue states” coastal America secular America (great majority of non-whites) l l l Republicans “red states” middle America religious America (majority of 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=

What-happens to the very notion of 'representative democracy? ' The elected representative cannot represent 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 mass industrial society, when people and their needs were fairly uniform ¡ In a mass industrial society, when people and their needs were fairly uniform and basic, consensus was an attainable goal. In a de-massified society, we not only lack national purpose, we also lack regional, statewide, or city-wide purpose. .

Power. SHIFT 3. 0 The subsequent character & contours of the powersphere…. . That Power. SHIFT 3. 0 The subsequent character & contours of the powersphere…. . That brings us to our current state of affairs….

Info. Sphere: Simultaneous: Proliferation of Channels of Communication & Deregulation of oversight & Consolidation Info. Sphere: Simultaneous: Proliferation of Channels of Communication & Deregulation of oversight & Consolidation of ownership & Polarization of viewpoint

In 1987 -FCC abolished the Fairness Doctrine FCC Chairman Mark S. Fowler, a communications 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 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

1996, Murdoch entered cable news market w/ the Fox News Channel After the FCC 1996, Murdoch entered cable news market w/ the Fox News Channel 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…

As unions decline, the more Democrats turn to corporate funding to survive…. With unions As unions decline, the more Democrats turn to corporate funding to survive…. 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 '80 s & '90 s 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 the Dem party's coffers grew, its allegiance to the working & middle class 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 The sources of American economic inequality are largely political – the result of deliberate political decisions to shape markets in ways that benefit the alreadyprivileged 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

November 12, 1999 Gramm–Leach–Bliley Act … Repealed the Glass–Steagall Act of 1933 --- effectively November 12, 1999 Gramm–Leach–Bliley Act … 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.

Concomitant w/ political polarization …. is economic divergence Concomitant w/ political polarization …. is economic divergence

Power. Sphere Shift Tax cuts for “the Rich”. . not going for investment in Power. Sphere Shift Tax 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 i. Pads 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 ~ 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%

Ratio of Average CEO to Average Worker pay, 1965 -2007 350 300 250 C. Ratio of Average CEO to Average Worker pay, 1965 -2007 350 300 250 C. E. O. ’s of largest American companies earned 42 --in 1980, but 531 times - in 2001 200 150 100 50 0 1965 1972 1978 1989 1997 2000 From Mishel, et. al. The State of working America, 2008 -09, Figure 3 AE 2007

The Poor get Poorer… Growth of intense poverty: % of poor living below Top The Poor get Poorer… Growth of intense poverty: % of poor living below Top 74 of the poverty line half individuals wealth = bottom 19 million

Average Income (After taxes; 2005 dollars) ‘ 50 -’ 80 up $13 k ‘ Average Income (After taxes; 2005 dollars) ‘ 50 -’ 80 up $13 k ‘ 80 -’ 08 up $303 Source: Congressional Budget Office, Effective Federal Tax Rates, 2007.

125, 000 net new jobs are needed just to keep up with the growth 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 distributio n of wealth than Banglades h, ¡ United States has a more unequal distributio n of wealth than Banglades h, Egypt, Libya, Tunisia & GINI Yemen http: //www. nytimes. com/2010/11/07/opinion/07 kristof. html? _r=1