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Mkt 100 021- week 5 - marketing ethics & social responsibility


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Mkt 100 021- week 5 - marketing ethics & social responsibility

  1. 1. Welcome to<br />MKT 100-021Week 5 - Marketing ETHICS & SOCIAL RESPONSIBILITY<br />Anthony<br />Francescucci<br />Assistant Professor, Marketing<br />Please ensure all electronic devices are in “silent mode”, “vibrate mode” or “turned off”<br />1<br />
  2. 2. Agenda for Today<br />2<br />
  3. 3. Metrics 3 & 4<br />Market Analytics<br />&<br />Contribution Margin<br />3<br />
  4. 4. Metric 3Market Share & Market Analytics<br />4<br />
  5. 5. Market Analytics<br />5<br />
  6. 6. Market Share<br />6<br />Calculate the Unit and Revenue Market Shares for the automakers:<br />Unit Sales (#)<br />25,000<br />Unit Market Share (%)<br />= <br />X 100<br />Total Market Unit Sales (#)<br />50,000<br />Sales Revenue ($)<br />$375,000,000<br />Revenue Market Share (%)<br />= <br />X 100<br />Total Market Revenue ($)<br />$937,500,000<br />50%<br />40.0%<br />21.3%<br />20.0%<br />13.3%<br />5.3%<br />100%<br />20%<br />15%<br />10%<br />5%<br />100%<br />
  7. 7. Relative Market Share<br />7<br /> The market for small urban cars consists of five players:<br /> In the market for small urban cars, managers at A-One want to know their firm’s market position relative to its largest competitor on the basis of revenues and unit sales:<br />Brand’s Market Share ($, #)<br />7,500<br />$187,500,000<br />Relative Market Share<br />A-One (Units)<br />Relative Market Share<br />A-One (Revenue)<br />Relative Market Share (I)<br />= <br />= <br />0.30<br />0.5<br />Largest Competitor’s Market Share ($,#)<br />25,000<br />$375,000,000<br />
  8. 8. Four Firm Concentration Ratio = Sum (Market Share of top Four competitors)<br />Four Firm Concentration Ratio<br />(in Unit terms)<br />50% + 20% + 15% + 10%<br />95%<br />Four Firm Concentration Ratio<br />(in Revenue terms)<br />40% + 21.3% + 20%+13.3%<br />94.6%<br />Market Concentration<br />8<br />=<br />=<br />
  9. 9. Market concentration (Cont’d)<br />9<br />Finally, we’ll look at market concentration using the Herfindahl Index:<br />Herfindahl Index = Sum [ (Market Share)⌃2 ]<br />( )⌃2 =<br /> ( )⌃2 =<br />0.16<br />0.25<br />( )⌃2 =<br />0.0455<br /> ( )⌃2 =<br />0.04<br />( )⌃2 =<br /> ( )⌃2 =<br />0.04<br />0.0225<br />( )⌃2 =<br />0.0178<br /> ( )⌃2 =<br />0.01<br />+<br />+<br />( )⌃2 =<br />0.0028<br /> ( )⌃2 =<br />0.0025<br />0.2661<br />0.325<br />
  10. 10. Metric 4:Contribution Margin<br />10<br />
  11. 11. Contribution Margin<br />11<br />Contribution<br />Margin<br />Sales or Revenue<br />COGS or<br />Variable Costs<br />
  12. 12. Remember Acme Coach Company<br />Variable costs:<br /> $ 60 Raw materials and components<br />+ $240 Labour (6 labour hours @ $40/hour)<br /> $300 Total Variable Cost per Unit<br />Monthly fixed operating costs: Yearly fixed operating costs:<br /> $600 Rent<br /> $100 Insurance ($1200 / 12 months)<br />+ $300 Salary<br /> $1000 Total Fixed Costs per Month $12, 000 FC / year<br />One time capital costs:<br /> $1000 Crane<br />+ $2500 Tooling<br /> $3500 Total One Time Fixed Costs<br />
  13. 13. Contribution<br />Margin %<br />Contrib<br />Margin $<br />Revenue<br />Contribution<br />Margin %<br />What is the Cm at acme <br />13<br />$150<br />$450<br />$300<br />Contribution<br />Margin<br />Revenue<br />COGS or<br />Variable Costs<br />$150 * 100 = <br />$15,000<br />$450 * 100<br />$45,000<br />300 X 100<br />$30,000<br />33.3 %<br />100%<br />
  14. 14. What does a contribution of $15,000 mean for Acme?<br />Variable costs:<br /> $ 60 Raw materials and components<br />+ $240 Labour (6 labour hours @ $40/hour)<br /> $300 Total Variable Cost per Unit<br />Monthly fixed operating costs: Yearly fixed operating costs:<br /> $600 Rent <br /> $100 Insurance ($1200 / 12 months) <br />+ $300 Salary <br /> $1000 Total Fixed Costs per Month $12, 000 FC / year<br />One time capital costs:<br /> $1000 Crane<br />+ $2500 Tooling<br /> $3500 Total One Time Fixed Costs<br />
  15. 15. Contribution<br />Margin %<br />Contrib<br />Margin $<br />Revenue<br />Contribution<br />Margin %<br />Second Example: Bottled Water<br />15<br />$0.75<br />$1.00<br />$0.25<br />Contribution<br />Margin<br />Revenue<br />COGS or<br />Variable Costs<br />$0.75 x 50K<br />$37,500<br />$1 X 50K<br />$50,000<br />.25 x 50K<br />$12,500<br />75 %<br />100%<br />
  16. 16. Let’s Complete the worksheet<br />16<br />
  17. 17. Some additional concepts<br />These concepts are not covered in the online modules so I’ve added some additional readings on blackboard located at;<br />Course Info & Materials/Lecture Materials/Week 5/ MKT100 – Week 5 – Additional readings.pdf<br />17<br />
  18. 18. ANSOFF’s Matrix<br />18<br />Existing Products<br />New Products<br />Framework for <br />developing intensive <br />growth strategies<br />Market<br />Penetration<br />Product<br />Development<br />Existing Markets<br />Market<br />Development<br />Diversification<br />New Markets<br />
  19. 19. Product Adoption Curve<br />19<br />
  20. 20. Product Adoption & life cycle Curves<br />20<br />
  21. 21. Module 3<br />Marketing Ethics <br />&<br />Social Responsibility<br />21<br />
  22. 22. Consider this scenario<br />A professor, who teaches a marketing course, saw one of his students photocopying the textbook for his course and then this same student sent an e-mail blast to everyone in the course that he had copies of the textbook for sale.  Of course the professor was on the class email distribution list.  A fellow student responded to the email and purchased the textbook for 1/3 of the price of the bookstore copy.<br />22<br />
  23. 23. Marketing Ethics<br />23<br />
  24. 24. Understanding Marketing Ethics<br />24<br />
  25. 25. Understanding Marketing Ethics<br />25<br />
  26. 26. Understanding Marketing Ethics<br />26<br />
  27. 27. Understanding Marketing Ethics<br />27<br />
  28. 28. Let’s look at some scenarios<br />Using the <br />Utility <br />& <br />Categorical Imperative<br />Principles<br />28<br />
  29. 29. Contemporary ethical cases<br />29<br />
  30. 30. Contemporary ethical cases<br />30<br />
  31. 31. Contemporary ethical cases<br />31<br />
  32. 32. Contemporary ethical cases<br />32<br />
  33. 33. Global Cross-cultural ethics<br />Marketing <br />in a<br /> Global World<br />33<br />
  34. 34. Global Cross-Cultural Ethics<br />34<br />
  35. 35. Contemporary ethical cases<br />35<br />
  36. 36. Contemporary ethical cases<br />36<br />
  37. 37. Is Bribe paying related to Gov’t Corruption?<br />Belgium &<br />Japan<br />Singapore<br />Hong Kong<br />37<br />
  38. 38. Group Exercise<br />38<br />
  39. 39. Each Group to argue case<br />39<br />
  40. 40. Case #1<br />Your supervisor enters your office and asks you for a check for $150.00 for expenses he tells you he incurred entertaining a client last night. He submits receipts from a restaurant and lounge. At lunch your supervisor’s girlfriend stops by to pick him up for lunch and you overhear her telling the receptionist what a great time she had at dinner and dancing with your supervisor the night before.<br />Was the supervisor unethical?<br />If you do nothing are you unethical?<br />40<br />
  41. 41. Case #2 <br />You have worked as a bank teller for several months when one of the other tellers who has become a good friend tells you that her daughter is extremely ill and that she must have an operation to survive. She also tells you that she has no insurance and the operation will cost $10,000. Sometime later you ask her about her daughter and she tells you she is just fine now. She then confides in you that she took $10,000.00 from a dormant account at the bank to pay for the operation.<br />She assures you that she has already started paying it back and will continue to do so until it is all returned.<br />Was the “other teller” unethical?<br />If you do nothing are you unethical?<br />41<br />
  42. 42. Case #3<br />Your newspaper has published a report on a national study, which concluded that bottled water has virtually no health advantages over the tap water in more cities, including yours. The study included comments from local health storeowners and water distributors challenging the study. The AquaPure Bottled Water Company, advertising account worth over $75,000. a year, has threatened to pull its account with your newspaper unless you run another story of equal prominence, focusing on the benefits of bottled water.<br />Was AquaPure Company unethical?<br />If your newspaper does nothing are they unethical?<br />If your newspaper runs the second story with equal prominence are they unethical?<br />42<br />
  43. 43. Case #4<br />You are interviewing to hire a CFO position. You have a complicated business that requires expertise that most candidates do not have. You finally decide on the best candidate. He does not have the exact experience you were hoping for, but he says he can figure it out. You offer him the job, and he accepts. He quits his job. Three days later you find the dream candidate and they also want work, they are far superior. You withdraw you offer to the first candidate and hire the dream candidate? <br />Are you unethical?<br />Is the dream candidate unethical, if he accepts the offer knowing the situation?<br />43<br />
  44. 44. Case #5<br />You are a member of the TTC advertising review committee considering a $200K deal from Ashley (a dating site which promotes having affairs) to wrap 10 streetcars with an ad saying “Life is Short. Have An Affair.”. The TTC is cash strapped, and $200K plus a 50¢ drop in fare for people who ride the streetcars.<br />Do you accept the money and run the ads? <br />Are you ethical?<br />44<br />
  45. 45. The mid-term<br />Feb 15, 2011<br />3:10 pm sharp<br />45<br />
  46. 46. Mid-term<br />46<br />
  47. 47. Seating Plan in Mid-term – TRSM 1-119<br />Note your seat location (based on number on your name card)<br />Front of Class<br />1<br />2<br />3<br />4<br />5<br />6<br />7<br />8<br />9<br />10<br />11<br />12<br />13<br />14<br />15<br />17<br />18<br />19<br />20<br />21<br />22<br />23<br />24<br />25<br />27<br />28<br />29<br />30<br />31<br />32<br />33<br />34<br />34a<br />34b<br />35<br />37<br />38<br />40<br />41<br />42<br />43<br />44<br />45<br />46<br />47<br />48<br />48a<br />49<br />50<br />51<br />52<br />53<br />54<br />55<br />56<br />57<br />58<br />59<br />61<br />61a<br />62<br />63<br />64<br />65<br />66<br />67<br />68<br />69<br />70<br />71<br />72<br />74<br />74a<br />75<br />76<br />77<br />78<br />79<br />80<br />81<br />82<br />83<br />84<br />85<br />86<br />87<br />89<br />90<br />90a<br />Back of Class<br />
  48. 48. Mid-term<br />48<br />
  49. 49. Reminders<br />49<br />
  50. 50. Assignment # 1<br />Due Tuesday<br />March 1st, 2011 by 11:59pm<br />50<br />Assignment must be posted to blackboard<br />&<br />Peer group evaluation completed<br />See course outline for late penalties<br />
  51. 51. Preliminary details<br />Must work in groups of 4 to 5 people (you select your own groups)<br />Use discussion board if you are searching for a group or need people to join your group.<br />Topic is on the internet-based video streaming industry<br />SWOT analysis and recommendation on whether Bell should enter this market?<br />51<br />
  52. 52. Assignment rubric<br />52<br />
  53. 53. Formatting<br />Double-spaced<br />Put your charts / tables in appendices<br />Save the body of the report for text<br />In body, make sure you refer to the appendices<br />APA formatting for in-text citations and references list<br />53<br />
  54. 54. Separate your thoughts on;<br />54<br />
  55. 55. analysis<br />Analysis Process<br />55<br />
  56. 56. report Writing<br />Report Writing Process<br />56<br />
  57. 57. Don’t Forget<br />57<br />
  58. 58. Before you leave today<br />Hand In:<br />58<br />
  59. 59. See you next Week<br />59<br />