03 MM - The Environment Strikes Back

8/8/2019 03 MM - The Environment Strikes Back

http://slidepdf.com/reader/full/03-mm-the-environment-strikes-back 1/20

Ian McPhee

MARKETING

MANAGEMENT



Predictable science?

Economic downturn What¶s really out there?

Our environment



What can we learn from science?

Water finds its own level Equality has to be eventually



Markets are never actually in equilibrium

They merely approach it as opportunities are

exploited

µCreative Destruction¶

Killer apps

Status quo v. Change

Order v. Chaos

Prescriptive v. Emergent



Faced with change

± Rapid; Radical & Revolutionary

Most Organisations won¶t

± Adapt; Alter & Amaze the market

Instead they

± Deny; Deteriorate & Die



Discuss the Red Queen theory

Identify the meaning of a µJanus¶ trend

List the eight Janus trends/paradoxes Explain how what is good is also bad

Explain the difference between

- Evolutionary change - Revolutionary change



Red Queen Race ± Species have to "run" (evolve) in order to stay in the same place

Red Queen Effect can be especially deleteriouswhen new rivals enter the market ± Incumbents struggle to improve efficiencies ± Upstarts and new entrants in existing markets

Capture a niche Create new ones

± Rules of the games are changed irrevocably

Strategists & Marketers must continually evolve ± To create change ± To respond to change



Janus was the Roman god of ± Beginnings and endings

± Gates and doors

Always represented with a double-faced head ± Each face pointed in opposite direction

Transitions from ± Primitive life to civilization

± Countryside and city ± Peace and war

± Past and future



Prosperity v. Poverty

Free Markets v. Protectionism

Population Growth v. Population Shortages Global Bliss v. Global Gloom

Power of MNCs v. Fragility of MNCs

Global Media Reach v. Media Fragmentation

Enhanced v. Diminished Service

Age of Brands v. Anti-Brand Era



Growth in wealth

± More than 7.7 million globally hold more than U.S.$1 million

± 236,000 millionaires in China, 61,000 in India

Poverty and despair

± 2001 2.7 billion people survive on less than $2 daily

± 1960 (average income) 20% of world¶s wealthiest

population was 30 times higher than poorest 20%

± 2001 It was 82 times higher!



Huge rise in electivesurgery

± Facelifts ± µBody¶ enhancements

± Liposuction

± Regular botox

treatments

Preventable diseases thatare three biggest killers of

children ± Measles

± Malaria

± Diarrhea

30 million children are not

immunized 6 million children under

age 5 die of hunger everyyear



Free markets ± WTO has 147 members representing 90% of world trade

± Average tariff has fallen from 40% to less than 4% since1950

± Over past decade freight and communication cost havedeclined sharply

Growing protectionism ± EU agricultural tariffs remain at 20% restricting growth of

poorest countries whose exports are 70% agriculture ± United States enacts ³safeguard quotas´ against Chinese

textiles

± Ongoing row regarding Boeing and Airbus subsidiesbetween United States and the European Union



Population growth ± World¶s population has doubled from 3 billion to 6 billion in past 40

years

± By 2050 World population expected to reach 9 billion

World¶s 50 poorest countries will triple in population

± Five countries account for approximately one-half of the world¶spopulation

± Population of five largest cities exceeded or almost matched majorityof world¶s nations (including geographically large nations such as

Australia and Canada)

Population shortages ± 27 potential future members of European Union will experience 6%

decrease in population through 2050

± Current EU members will also experience declines

± Canada¶s Alberta province despite economic boom lacks enough

workers



Global bliss ± Cultures and countries realizing

Greater similarities than differences More to gain by cooperation than conflict

± Global brands ± Globally integrated production processes

Multiple sources of origin on products ± Advances in logistics have lowered containerized transportationcost

± Time boundaries all but eliminated ± Internet: Cell phones ± Regulatory boundaries fall as nations seek to increase trade

Global gloom

± Many people feel Globalization is a bad thing Majority of the world¶s population is worse off Undermines the environment etc

± Anti-globalization protests accompany most major meetings of political and business leaders

± Diluting of local cultures by global brands



The Power of MNCs ± Of 100 largest economies 51 are corporations, 49 are nation states ± Wal-Mart revenues > most economies of eastern Europe ± MNCs¶ powers increases due to mergers and acquisitions ± Strong emphasis on R&D

± Aggressive intellectual property protection Fragility of MNCs

± Value chain exploitation can make smaller companies morecompetitive

± Vulnerable to ³brand companies´ Companies that outsource all activities except marketing of brand

More flexible, no overhead cost or investment in major infrastructure ± Susceptible to activities of so-called ³hidden champions´

Small-to-medium-sized firms with strong local presence

± Lack of adequate laws protecting intellectual property rights Patents Copyright protection



Worldwide media reach ± ³Buying´new from CNN, SKY, BBC, extends smaller stations reach

± Global availability

Fragmentation of media and audiences

± Advertising in video games Advertisers pay large sums for product placement

± ³U-commerce´ Commerce that is ubiquitous, universal, unique, and in unison with

recipient

M (or mobile)-Media advertisements to cell phones and other portable

devices ± Internet

³Podcasting´ anyone can be a broadcaster

YouTube permits anyone to upload video and others to download content

MySpace is a communications tool that also allows upload of video anddownload of content



Enhanced service ± Singapore Airlines

Pampers business class passengers

± FedEx Guaranteed delivery

Diminished service ± Demise of operated assisted calls in favor of direct dial

± ATMs in place of bank clerks

± Online statement retrieval in place of paper notification

± Customers don¶t always want delightful service²they want solutions

± Customers want Speed

Efficiency

control



The age of brands ± Brand equity²value of a brand name

brand recognition = brand equity

± Brand equity in not-for-profit firms Red Cross

Amnesty International

Habitat for Humanity

The era of the anti-brand

± Anti-globalization movement ± Dilution of local culture

± Exploitation of foreign workers

³Free speech is

meaningless if the

commercial

cacophony has risento the point where no

one can hear you.´

(No Logo: Naomi Klein)



Evolutionary Change

Standardisation of strategic approaches

Centralisedorganisational

design Exploitation of

innovations

Revolutionary Change

Differentiation of strategic approaches

Decentralisedorganisational

design

Exploration for innovation



Documents

03 MM - The Environment Strikes Back