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Quiz 4 :

Managing Marketing Information to Gain Customer Insights

Quiz 4 :

Managing Marketing Information to Gain Customer Insights

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Ethics Drives Barrett-Jackson Auto Auction Company to Success Monitoring the ethical behavior of auction companies can be tricky. Consumers might not know the value of the product until after they purchase it, and not all items purchased at auction companies come with sufficient documentation to prove the product's authenticity. It has not been unheard of for sellers to falsify documentation to secure better deals. To avoid these ethical issues, classic and vintage car auction company Barrett-Jackson LLC has created an ethical culture that considers the needs of buyers, sellers, and the community. The company has been recognized as one of the world's most ethical companies by Ethisphere magazine. Barrett-Jackson was founded in 1971 in Scottsdale, Arizona, by classic car lovers Russ Jackson and Tom Barrett. The two men had met a decade earlier when Jackson was considering buying a 1933 Cadillac V16 Town Car from Barrett. The two became lifelong friends and began organizing their own auctions. From the beginning the men recognized the special nature of the products they were auctioning. Buyers place great value on the cars they purchase, with some having searched for years to locate their classic "dream" car. The company would have to exert great delicacy to ensure a fair auction process and authentic products. After Russ Jackson passed away, his son Craig Jackson began running the company. Like his predecessors, Craig recognized the importance of adopting values to ensure an ethical auction process. "We will separate ourselves and do things in an ethical manner to make sure we set the right standards for our customers. These are the things that have been entrenched in our corporate culture since the beginning," Craig stated. The company has instituted a number of programs to make certain that the auction process between buyer and seller remains fair. These programs recognize the inherent rights of the stakeholders involved in the transaction. For instance, Barrett-Jackson protects buyers' rights to choose by working to prevent false bids meant to raise the price of the cars. Sometimes car owners will try to bid on their own cars to boost the price. Barrett-Jackson acts to make certain that prices remain fair so that consumers can choose their dream car at a competitive price. Barrett-Jackson also protects the right to safety of both buyers and sellers by using security cameras to monitor stakeholders during the auction and making sure that buyers have the ability to pay. The company also offers access to Barrett-Jackson-endorsed insurance coverage, which reduces the risk of purchase by assuring buyers that their cars can be restored in case of an accident. Barrett-Jackson protects consumers' rights to be informed by making sure to the best of their ability that documentation is truthful and rejects sellers who do not meet their stringent requirements. Barrett-Jackson also tries to ensure that their stakeholders are provided with a forum to make their voices heard. This includes thoroughly investigating stakeholder concerns even if it might interfere with the sale of a product. For instance, one of the collector vehicles sold by Barrett-Jackson was allegedly the ambulance that carried President John F. Kennedy to the hospital after he was shot. Shortly after the auction of the ambulance was announced, questions concerning the authenticity of these claims arose. Barrett-Jackson responded by undertaking a thorough investigation of the documentation provided on the ambulance. The company responded that it could not offer a 100 percent guarantee that the ambulance was authentic but that the claims were true to the best of its knowledge. By acting to investigate the available documentation and releasing a disclaimer, Barrett-Jackson not only took these claims seriously but told potential buyers about the possible risks involved so they could make an informed decision. Additionally, Barrett- Jackson practices social responsibility by giving back to the communities in which it does business. Barrett- Jackson has helped raise $5.8 million for charities nationwide. The company also engages in strategic philanthropy and created the Barrett-Jackson Cancer Research Fund at the Translational Genomics Research Institute (TGen) in 2010. In honor of Russ Jackson and his son Brian, both victims of cancer, the company raises money to fund research to fight colon and prostate cancer and search for a cure. For example, in 2012 the company raised $125,000 for TGen by auctioning a 1993 Chevrolet Corvette 40th Anniversary coupe. Barrett-Jackson's emphasis on community relations and customer satisfaction has helped secure its reputation as an ethical company. Buyers and sellers alike can feel confident that they will be treated fairly when doing business with the fi rm. Barrett-Jackson is a good example of how ethical conduct can increase company success. How do solid community relations help Barrett-Jackson succeed?
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Entity 'B J', besides being one of the world's most ethical companies, also believed in giving back to the society, where it does business. This philosophy led the company to actively follow philanthropic activities.
The Company has helped in raising $5.8 million for charities nationwide. The company has realized early hat socially responsible activities can generate positive publicity and rich dividends for the company. The company was also instrumental in the establishment of Entity 'B J' Cancer Research Fund at the Translational Genomics Research Institute (TGen) in 2010.
The company also raises money to fund research to fight colon and prostate cancer in honor of person 'R J' and his son 'B', both being victims of dreaded disease cancer. In 2012, the company raised $125,000 for TGen by auctioning a 1993 'Chevrolet Corvette 40 th Anniversary coupe'.
Entity 'B J' has always laid strong stress on practicing ethical behavior and solid community relationship. No doubt, these factors have immensely contributed to the success of the company.

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TOMS Shoes Expands One-to-One Model to Eyewear While many organizations try to incorporate cause-related marketing into their business operations, TOMS Shoes takes the concept of philanthropy one step further. TOMS blends a for-profit business with a philanthropic component in what it terms the one-to-one model. For every pair of shoes sold, another pair is provided to a child in need. Recently, TOMS has also expanded into eyewear. For every pair of sunglasses sold, a person with vision problems in developing countries receives surgery, prescription glasses, or medical treatment to help restore his or her sight. Unlike many nonprofits, TOMS' for-profit business enables the company to support its philanthropic component, which keeps the company from having to solicit donations. The idea for TOMS Shoes occurred after founder Blake Mycoskie witnessed the immense poverty in Argentinean villages-poverty so bad that many families could not afford to purchase shoes for their children. Recognizing the importance of shoes to health and education, Mycoskie decided to create a new business that would consist of two parts: TOMS Shoes, a for-profit business that would sell the shoes, and Friends of TOMS, the company's nonprofit subsidiary that would distribute shoes to those in need. For his original product, Mycoskie decided to adopt the alpargata shoe worn in Argentina. The alpargata is a slip-on shoe made from canvas or fabric with rubber soles. After a Los Angeles Times article featured Mycoskie's new business, demand for the shoes exploded. Unfortunately for Mycoskie, he did not have enough shoes to fill the orders. Mycoskie was able to work out the product shortage, and today TOMS is a thriving business. After distributing its one-millionth pair of shoes in 2010, TOMS began to consider other products that could be used in the one-to-one model. "When I thought about launching another product with the TOMS model, vision seemed the most obvious choice," Blake Myscoskie explained. Because 80 percent of vision impairment in developing countries is preventable or curable, TOMS decided that for every pair of sunglasses it sold, the company would provide treatment or prescription glasses for those in need. TOMS chose Nepal as the first country to apply its one-to-one model. TOMS takes its obligations for social responsibility seriously. The company builds the cost of the extra pair of shoes and eye care into the price of the products it sells. TOMS also works closely with local humanitarian organizations. "With TOMS we always work with local nonprofits or NGOs to understand what the need is in a community before we just go in and start giving," said Liza De La Torre, VP of sales and marketing at TOMS. Customers who do business with TOMS feel committed to the company because they know that their purchases are going toward a good cause, even if they might pay a bit more in the process. TOMS goes to great lengths to educate the public about the importance of its mission. Although it does not have a marketing budget, the company provides internship opportunities and engages brand ambassadors at universities to spread the TOMS message. Every year the company promotes the One Day Without Shoes campaign, in which participants spend one day without shoes to understand what children in developing countries must undergo daily. These events have been supported by celebrities such as Charlize Theron, Kris Ryan, and the Dallas Cowboys Cheerleaders. Despite TOMS' clear philanthropic component, risks for misconduct still exist. The company uses factories in China, Argentina, and Ethiopia for manufacturing, which creates complex supply chain relationships that must be carefully managed. TOMS created a set of manufacturing standards based upon International Labor Organization compliance standards for its manufacturers. The company regularly performs audits to check that the factories are complying with company standards. TOMS also seeks to create strong organizational relationships with its employees and volunteers. The company often allows employees to participate in Shoe Drops (distributing the shoes to children) so they can see firsthand how their efforts are helping others. Despite its success, TOMS' mission is far from complete. As its expansion into eyewear demonstrates, the company is looking for new opportunities for applying its one-to-one model. TOMS demonstrates how an innovative concept and the ability to incorporate philanthropy into business operations can create a successful company that can make a difference. How does TOMS manage its supply chain in order to ensure ethical and socially responsible conduct?
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Entity 'T''s record in discharging its social responsibilities is excellent and is well appreciated by all its stakeholders. Its commitment to its philanthropic philosophy is amply evident by the social activities carried out by the company.
Entity 'T' has factories in China, Argentina, and Ethiopia for production activities and their locations stretch to three continents. This created complex supply chain relationships which required careful management. Despite Entity 'T's upholds philanthropy loud and clear , the company decides to leave nothing to chance with regard to just and fair conduct at its work-places.
Entity 'T's created a set of manufacturing standards based on International Labor Organization compliance standards for its manufacturers. The company conducts audit regularly to ensure that factories follow strict compliance to its set standards. The company aims to develop strong relationship between the organizational and its employees and volunteers.
The company conducts its program of distributing shoes to children called Shoe Drops where it often allows its employees to participate and to experience themselves how their efforts are helping others and bringing happiness to them. In this way, Entity 'T' is successfully ensuring ethically and socially responsible conduct at its work place.

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Ethics Drives Barrett-Jackson Auto Auction Company to Success Monitoring the ethical behavior of auction companies can be tricky. Consumers might not know the value of the product until after they purchase it, and not all items purchased at auction companies come with sufficient documentation to prove the product's authenticity. It has not been unheard of for sellers to falsify documentation to secure better deals. To avoid these ethical issues, classic and vintage car auction company Barrett-Jackson LLC has created an ethical culture that considers the needs of buyers, sellers, and the community. The company has been recognized as one of the world's most ethical companies by Ethisphere magazine. Barrett-Jackson was founded in 1971 in Scottsdale, Arizona, by classic car lovers Russ Jackson and Tom Barrett. The two men had met a decade earlier when Jackson was considering buying a 1933 Cadillac V16 Town Car from Barrett. The two became lifelong friends and began organizing their own auctions. From the beginning the men recognized the special nature of the products they were auctioning. Buyers place great value on the cars they purchase, with some having searched for years to locate their classic "dream" car. The company would have to exert great delicacy to ensure a fair auction process and authentic products. After Russ Jackson passed away, his son Craig Jackson began running the company. Like his predecessors, Craig recognized the importance of adopting values to ensure an ethical auction process. "We will separate ourselves and do things in an ethical manner to make sure we set the right standards for our customers. These are the things that have been entrenched in our corporate culture since the beginning," Craig stated. The company has instituted a number of programs to make certain that the auction process between buyer and seller remains fair. These programs recognize the inherent rights of the stakeholders involved in the transaction. For instance, Barrett-Jackson protects buyers' rights to choose by working to prevent false bids meant to raise the price of the cars. Sometimes car owners will try to bid on their own cars to boost the price. Barrett-Jackson acts to make certain that prices remain fair so that consumers can choose their dream car at a competitive price. Barrett-Jackson also protects the right to safety of both buyers and sellers by using security cameras to monitor stakeholders during the auction and making sure that buyers have the ability to pay. The company also offers access to Barrett-Jackson-endorsed insurance coverage, which reduces the risk of purchase by assuring buyers that their cars can be restored in case of an accident. Barrett-Jackson protects consumers' rights to be informed by making sure to the best of their ability that documentation is truthful and rejects sellers who do not meet their stringent requirements. Barrett-Jackson also tries to ensure that their stakeholders are provided with a forum to make their voices heard. This includes thoroughly investigating stakeholder concerns even if it might interfere with the sale of a product. For instance, one of the collector vehicles sold by Barrett-Jackson was allegedly the ambulance that carried President John F. Kennedy to the hospital after he was shot. Shortly after the auction of the ambulance was announced, questions concerning the authenticity of these claims arose. Barrett-Jackson responded by undertaking a thorough investigation of the documentation provided on the ambulance. The company responded that it could not offer a 100 percent guarantee that the ambulance was authentic but that the claims were true to the best of its knowledge. By acting to investigate the available documentation and releasing a disclaimer, Barrett-Jackson not only took these claims seriously but told potential buyers about the possible risks involved so they could make an informed decision. Additionally, Barrett- Jackson practices social responsibility by giving back to the communities in which it does business. Barrett- Jackson has helped raise $5.8 million for charities nationwide. The company also engages in strategic philanthropy and created the Barrett-Jackson Cancer Research Fund at the Translational Genomics Research Institute (TGen) in 2010. In honor of Russ Jackson and his son Brian, both victims of cancer, the company raises money to fund research to fight colon and prostate cancer and search for a cure. For example, in 2012 the company raised $125,000 for TGen by auctioning a 1993 Chevrolet Corvette 40th Anniversary coupe. Barrett-Jackson's emphasis on community relations and customer satisfaction has helped secure its reputation as an ethical company. Buyers and sellers alike can feel confident that they will be treated fairly when doing business with the fi rm. Barrett-Jackson is a good example of how ethical conduct can increase company success. In what ways does Barrett-Jackson protect the rights of its buyers and sellers?
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In an auction, both buyer and seller are apprehensive and seek to protect their interest the auction company, Entity 'B J' felt this and decided to set right standards for the customers participating in an auction. The idea was to do things in an ethical manner so that each stakeholder in an auction should feel being treated fairly.
The company has instituted a number of programs to ensure fair treatment to each and every participant in an auction. The company works on preventing false bid intended to raise the price of car, thus securing the buyer's interest. The company tries to ensure that the price of the car remains fair so that participants can take an informed decision. The company also protects the right to safety of both buyers and sellers by using security cameras to monitor stakeholders during the auction.
The company also reduces the risk of purchase by providing company's endorsed insurance coverage which assures buyers that their car can be restored in case of an accident. The company also tries to make suitable scrutiny of the documents submitted by the seller to the best of their ability and informs the same to the consumer. The company does not accept the claims of sellers who fail to meet its stringent requirements.
Entity 'B J' became so much successful in its efforts of practicing ethical manners that the company has been recognized as one of the world's most ethical company by Ethisphere Institute

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When developing a marketing strategy, companies must consider that their decisions affect not only their own company but also society in general. Many socially responsible and ethical companies identify their intentions as part of their mission statement, which serves as a guide for making all decisions about the company, including those in the marketing plan. To assist you in relating the information in this chapter to the development of your marketing plan, consider the following: Referring to Table 4.2 as a guide, discuss how the negative impact of your product's production and use could be minimized. img The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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At Timberland, Doing Well and Doing Good Are Laced Together Timberland's well-known name and tree logo are good clues as to how much this multinational firm cares about sustainability. The company, headquartered in Stratham, New Hampshire, started out manufacturing shoes and boots and later expanded into apparel and accessories. Today, Timberland sells through its own network of stores as well as through thousands of department and specialty stores worldwide. It also operates e-business websites in the United States, the United Kingdom, Japan, and France. The firm was so profitable that it was acquired by VF Corporation, owner of brands North Face and Wrangler, for $2.3 billion. The acquisition was the largest in the corporation's history. Timberland's $1.5 billion in revenue comes from sales in North America, Europe, and Asia. To stay on top of fast changing trends in the world of fashion, Timberland maintains an international design center in London. It seeks to develop high-quality outdoor products to improve the lives of its customers and communities, as well as to inspire them to make a difference in the world. As a result, the company's long-term strategy for success combines a comprehensive social responsibility agenda with careful planning for the ever-changing marketing environment. Four Pillars of Social Responsibility Timberland's social responsibility agenda rests on the four "pillars" of energy, products, workplaces, and service. Each pillar is associated with specific short- and long-term targets that Timberland has established with the input of its stakeholders. Under the first pillar-energy-the company has reduced energy consumption, slashed harmful greenhouse gas emissions, and increased its use of power from renewable sources. It is also increasing the use of virtual meetings to cut down on employee travel, which saves energy as well as time and money. The second pillar, earth-friendly products, is a key element in Timberland's social responsibility agenda. More than one-third of its shoes contain some recycled material. Its Earth keepers shoes have been specially designed to incorporate a combination of organic, renewable, and recyclable materials. Some Earth keepers are not only made from old plastic bottles and other recycled content, they can be completely disassembled and the components can be reworked into new Timberland shoes. Soon, all Timberland products will be labeled to show their impact on the planet. The third pillar relates to the workplace. Timberland sets tough standards for fair and safe working conditions at all the factories and facilities that make its shoes and clothing products. Although it owns and operates a factory in the Dominican Republic, the company buys most of its products from a global network of suppliers that employs 175,000 workers in approximately 300 factories spread across 35 countries. Timberland works with the VF Corporation's audit team to ensure that suppliers are complying with their detailed code of conduct, which forbids discrimination, child labor, and unsafe practices. Factories are audited regularly and when violations are found, Timberland follows up to be sure that the necessary workplace improvements are made. Timberland employees are encouraged to call the Integrity Line, a 24-hour hotline answered by a third party, whenever they want to report workplace concerns, submit ideas, or ask questions. The fourth pillar, service, has long been part of Timberland's cultural fabric. Every full-time Timberland employee can take up to 40 hours, with pay, to volunteer in his or her community. In addition, Timberland's former CEO began the tradition of Serv-a-palooza in 1998 when he set aside one work day for global volunteerism. Today, employees are encouraged (but not required) to devote this annual day of service to volunteering in their communities. Some employees use the day to clear nature trails, some pick up trash from riverbanks, and others grab their tool belts to build arts facilities or repair neighborhood schools. In more than a decade with Timberland, the former vice president of corporate culture enthusiastically laced up his Timberland boots and volunteered on three continents, doing everything from protecting the rainforest to improving the gardens around a senior center. The Changing Marketing Environment Because Timberland has a diverse product portfolio and is active in retailing and wholesaling as well as manufacturing, it has to keep an eye on competitors in several industries. One strong U.S.-based rival is Wolverine World Wide, which manufactures Hush Puppies, Sebago, Merrell, Patagonia Footwear, and other brands of casual and work shoes. Like Timberland, Wolverine operates company stores in the United States and the United Kingdom. The U.K.-based R. Griggs Group, maker of Doc Martens boots, shoes, and sandals, is a key competitor. Finally, particular Timberland shoe styles compete directly with footwear marketed by the world's largest athletic shoe companies. Economic conditions can also affect Timberland's marketing situation. During the recent recession, when many consumers held back on discretionary purchases, the company's overall revenue fell. However, sales of its work boots remained flat, even as some competitors saw their sales drop. Timberland's marketing executives realized that the brand was holding its own among construction workers and other buyers who need tough, reliable footwear to use day in and day out. Timberland's marketers have also noticed that the challenging global economic situation is influencing the way consumers think and feel about buying products such as shoes and clothing. When unemployment was low and buying power was high, consumers often used such purchases as a way to display their wealth. As the economy moved into recession, however, many cash-strapped consumers cut back on purchases of showy, expensive items, in favor of products that conveyed a more subtle message about cultural values such as concern for the environment. Today, "self worth is tied to thoughtful purchases as a way to impress your peers, instead of conspicuous consumption," states Timberland's senior director of merchandising. In addition to its international marketing initiatives in China and Europe, Timberland sees promising opportunities for growth in India. It signed a strategic alliance with Reliance Industries, a local company known for marketing international brands. Reliance distributes shoes, boots, and clothing through Timberland-branded stores and through selected department stores in major Indian cities. Timberland's CEO says that Reliance has "a clear understanding of the Timberland brand and consumer" and, just as important, it's "as committed as we are to our ideology and passion for the outdoors." High-Tech Shoes and Communications Timberland is applying technological advances to improve its footwear products and to reach out to customers through digital media. For example, to satisfy customers' needs for comfort, the company has introduced patented "Smart Comfort" footbeds in its shoes. As part of its commitment to sustainability, Timberland makes Green Rubber soles from recycled rubber and is designing its new footwear products for easy disassembly and recycling at the end of their useful lives. Moving into digital media is helping Timberland bring its marketing messages to the attention of consumers who use the Web. Through brand-specific sites, Facebook fan pages, blog entries, a Twitter feed, YouTube videos, and online games, Timberland supplements its traditional marketing activities and engages consumers who seek a deeper level of involvement with their favorite brands. What forces in the marketing environment appear to pose the greatest challenges to Timberland's marketing performance? Explain.
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At Timberland, Doing Well and Doing Good Are Laced Together Timberland's well-known name and tree logo are good clues as to how much this multinational firm cares about sustainability. The company, headquartered in Stratham, New Hampshire, started out manufacturing shoes and boots and later expanded into apparel and accessories. Today, Timberland sells through its own network of stores as well as through thousands of department and specialty stores worldwide. It also operates e-business websites in the United States, the United Kingdom, Japan, and France. The firm was so profitable that it was acquired by VF Corporation, owner of brands North Face and Wrangler, for $2.3 billion. The acquisition was the largest in the corporation's history. Timberland's $1.5 billion in revenue comes from sales in North America, Europe, and Asia. To stay on top of fast changing trends in the world of fashion, Timberland maintains an international design center in London. It seeks to develop high-quality outdoor products to improve the lives of its customers and communities, as well as to inspire them to make a difference in the world. As a result, the company's long-term strategy for success combines a comprehensive social responsibility agenda with careful planning for the ever-changing marketing environment. Four Pillars of Social Responsibility Timberland's social responsibility agenda rests on the four "pillars" of energy, products, workplaces, and service. Each pillar is associated with specific short- and long-term targets that Timberland has established with the input of its stakeholders. Under the first pillar-energy-the company has reduced energy consumption, slashed harmful greenhouse gas emissions, and increased its use of power from renewable sources. It is also increasing the use of virtual meetings to cut down on employee travel, which saves energy as well as time and money. The second pillar, earth-friendly products, is a key element in Timberland's social responsibility agenda. More than one-third of its shoes contain some recycled material. Its Earth keepers shoes have been specially designed to incorporate a combination of organic, renewable, and recyclable materials. Some Earth keepers are not only made from old plastic bottles and other recycled content, they can be completely disassembled and the components can be reworked into new Timberland shoes. Soon, all Timberland products will be labeled to show their impact on the planet. The third pillar relates to the workplace. Timberland sets tough standards for fair and safe working conditions at all the factories and facilities that make its shoes and clothing products. Although it owns and operates a factory in the Dominican Republic, the company buys most of its products from a global network of suppliers that employs 175,000 workers in approximately 300 factories spread across 35 countries. Timberland works with the VF Corporation's audit team to ensure that suppliers are complying with their detailed code of conduct, which forbids discrimination, child labor, and unsafe practices. Factories are audited regularly and when violations are found, Timberland follows up to be sure that the necessary workplace improvements are made. Timberland employees are encouraged to call the Integrity Line, a 24-hour hotline answered by a third party, whenever they want to report workplace concerns, submit ideas, or ask questions. The fourth pillar, service, has long been part of Timberland's cultural fabric. Every full-time Timberland employee can take up to 40 hours, with pay, to volunteer in his or her community. In addition, Timberland's former CEO began the tradition of Serv-a-palooza in 1998 when he set aside one work day for global volunteerism. Today, employees are encouraged (but not required) to devote this annual day of service to volunteering in their communities. Some employees use the day to clear nature trails, some pick up trash from riverbanks, and others grab their tool belts to build arts facilities or repair neighborhood schools. In more than a decade with Timberland, the former vice president of corporate culture enthusiastically laced up his Timberland boots and volunteered on three continents, doing everything from protecting the rainforest to improving the gardens around a senior center. The Changing Marketing Environment Because Timberland has a diverse product portfolio and is active in retailing and wholesaling as well as manufacturing, it has to keep an eye on competitors in several industries. One strong U.S.-based rival is Wolverine World Wide, which manufactures Hush Puppies, Sebago, Merrell, Patagonia Footwear, and other brands of casual and work shoes. Like Timberland, Wolverine operates company stores in the United States and the United Kingdom. The U.K.-based R. Griggs Group, maker of Doc Martens boots, shoes, and sandals, is a key competitor. Finally, particular Timberland shoe styles compete directly with footwear marketed by the world's largest athletic shoe companies. Economic conditions can also affect Timberland's marketing situation. During the recent recession, when many consumers held back on discretionary purchases, the company's overall revenue fell. However, sales of its work boots remained flat, even as some competitors saw their sales drop. Timberland's marketing executives realized that the brand was holding its own among construction workers and other buyers who need tough, reliable footwear to use day in and day out. Timberland's marketers have also noticed that the challenging global economic situation is influencing the way consumers think and feel about buying products such as shoes and clothing. When unemployment was low and buying power was high, consumers often used such purchases as a way to display their wealth. As the economy moved into recession, however, many cash-strapped consumers cut back on purchases of showy, expensive items, in favor of products that conveyed a more subtle message about cultural values such as concern for the environment. Today, "self worth is tied to thoughtful purchases as a way to impress your peers, instead of conspicuous consumption," states Timberland's senior director of merchandising. In addition to its international marketing initiatives in China and Europe, Timberland sees promising opportunities for growth in India. It signed a strategic alliance with Reliance Industries, a local company known for marketing international brands. Reliance distributes shoes, boots, and clothing through Timberland-branded stores and through selected department stores in major Indian cities. Timberland's CEO says that Reliance has "a clear understanding of the Timberland brand and consumer" and, just as important, it's "as committed as we are to our ideology and passion for the outdoors." High-Tech Shoes and Communications Timberland is applying technological advances to improve its footwear products and to reach out to customers through digital media. For example, to satisfy customers' needs for comfort, the company has introduced patented "Smart Comfort" footbeds in its shoes. As part of its commitment to sustainability, Timberland makes Green Rubber soles from recycled rubber and is designing its new footwear products for easy disassembly and recycling at the end of their useful lives. Moving into digital media is helping Timberland bring its marketing messages to the attention of consumers who use the Web. Through brand-specific sites, Facebook fan pages, blog entries, a Twitter feed, YouTube videos, and online games, Timberland supplements its traditional marketing activities and engages consumers who seek a deeper level of involvement with their favorite brands. How does Timberland's reputation for social responsibility serve as a strength when consumers are turning away from showy, expensive products?
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When developing a marketing strategy, companies must consider that their decisions affect not only their own company but also society in general. Many socially responsible and ethical companies identify their intentions as part of their mission statement, which serves as a guide for making all decisions about the company, including those in the marketing plan. To assist you in relating the information in this chapter to the development of your marketing plan, consider the following: Determine the level of importance that marketing citizenship holds in your company. Identify the various stakeholders who would be affected by your strategic decisions. The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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What are four dimensions of social responsibility? What impact do they have on marketing decisions?
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Business for Social Responsibility Business for Social Responsibility (BSR) is a nonprofit organization for companies who want to operate responsibly and demonstrate respect for ethical values, people, communities, and the natural environment. Founded in 1992, BSR offers members practical information, research, educational programs, and technical assistance, as well as the opportunity to network with peers on current social responsibility issues. To learn more about this organization and access its many resources, visit www.bsr.org. Describe the services available to member companies. How can these services help companies improve their performances?
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What is social responsibility? Why is it important?
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Business for Social Responsibility Business for Social Responsibility (BSR) is a nonprofit organization for companies who want to operate responsibly and demonstrate respect for ethical values, people, communities, and the natural environment. Founded in 1992, BSR offers members practical information, research, educational programs, and technical assistance, as well as the opportunity to network with peers on current social responsibility issues. To learn more about this organization and access its many resources, visit www.bsr.org. Peruse the "BSR Conference" link, located at the top of the home page. What are some advantages to attending the BSR conference and listening to industry leaders and experts in corporate social responsibility?
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Ethics Drives Barrett-Jackson Auto Auction Company to Success Monitoring the ethical behavior of auction companies can be tricky. Consumers might not know the value of the product until after they purchase it, and not all items purchased at auction companies come with sufficient documentation to prove the product's authenticity. It has not been unheard of for sellers to falsify documentation to secure better deals. To avoid these ethical issues, classic and vintage car auction company Barrett-Jackson LLC has created an ethical culture that considers the needs of buyers, sellers, and the community. The company has been recognized as one of the world's most ethical companies by Ethisphere magazine. Barrett-Jackson was founded in 1971 in Scottsdale, Arizona, by classic car lovers Russ Jackson and Tom Barrett. The two men had met a decade earlier when Jackson was considering buying a 1933 Cadillac V16 Town Car from Barrett. The two became lifelong friends and began organizing their own auctions. From the beginning the men recognized the special nature of the products they were auctioning. Buyers place great value on the cars they purchase, with some having searched for years to locate their classic "dream" car. The company would have to exert great delicacy to ensure a fair auction process and authentic products. After Russ Jackson passed away, his son Craig Jackson began running the company. Like his predecessors, Craig recognized the importance of adopting values to ensure an ethical auction process. "We will separate ourselves and do things in an ethical manner to make sure we set the right standards for our customers. These are the things that have been entrenched in our corporate culture since the beginning," Craig stated. The company has instituted a number of programs to make certain that the auction process between buyer and seller remains fair. These programs recognize the inherent rights of the stakeholders involved in the transaction. For instance, Barrett-Jackson protects buyers' rights to choose by working to prevent false bids meant to raise the price of the cars. Sometimes car owners will try to bid on their own cars to boost the price. Barrett-Jackson acts to make certain that prices remain fair so that consumers can choose their dream car at a competitive price. Barrett-Jackson also protects the right to safety of both buyers and sellers by using security cameras to monitor stakeholders during the auction and making sure that buyers have the ability to pay. The company also offers access to Barrett-Jackson-endorsed insurance coverage, which reduces the risk of purchase by assuring buyers that their cars can be restored in case of an accident. Barrett-Jackson protects consumers' rights to be informed by making sure to the best of their ability that documentation is truthful and rejects sellers who do not meet their stringent requirements. Barrett-Jackson also tries to ensure that their stakeholders are provided with a forum to make their voices heard. This includes thoroughly investigating stakeholder concerns even if it might interfere with the sale of a product. For instance, one of the collector vehicles sold by Barrett-Jackson was allegedly the ambulance that carried President John F. Kennedy to the hospital after he was shot. Shortly after the auction of the ambulance was announced, questions concerning the authenticity of these claims arose. Barrett-Jackson responded by undertaking a thorough investigation of the documentation provided on the ambulance. The company responded that it could not offer a 100 percent guarantee that the ambulance was authentic but that the claims were true to the best of its knowledge. By acting to investigate the available documentation and releasing a disclaimer, Barrett-Jackson not only took these claims seriously but told potential buyers about the possible risks involved so they could make an informed decision. Additionally, Barrett- Jackson practices social responsibility by giving back to the communities in which it does business. Barrett- Jackson has helped raise $5.8 million for charities nationwide. The company also engages in strategic philanthropy and created the Barrett-Jackson Cancer Research Fund at the Translational Genomics Research Institute (TGen) in 2010. In honor of Russ Jackson and his son Brian, both victims of cancer, the company raises money to fund research to fight colon and prostate cancer and search for a cure. For example, in 2012 the company raised $125,000 for TGen by auctioning a 1993 Chevrolet Corvette 40th Anniversary coupe. Barrett-Jackson's emphasis on community relations and customer satisfaction has helped secure its reputation as an ethical company. Buyers and sellers alike can feel confident that they will be treated fairly when doing business with the fi rm. Barrett-Jackson is a good example of how ethical conduct can increase company success Why is ethical behavior so important for an auction company such as Barrett-Jackson?
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Some organizations promote their social responsibility. These companies often claim that being ethical is good business and that it pays to be a "good corporate citizen." Identify an organization in your community that has a reputation for being ethical and socially responsible. What activities account for this image? Is the company successful? Why or why not?
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What are stakeholders? What role do they play in strategic marketing decisions?
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Business for Social Responsibility Business for Social Responsibility (BSR) is a nonprofit organization for companies who want to operate responsibly and demonstrate respect for ethical values, people, communities, and the natural environment. Founded in 1992, BSR offers members practical information, research, educational programs, and technical assistance, as well as the opportunity to network with peers on current social responsibility issues. To learn more about this organization and access its many resources, visit www.bsr.org. What types of businesses join BSR, and why?
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TOMS Shoes Expands One-to-One Model to Eyewear While many organizations try to incorporate cause-related marketing into their business operations, TOMS Shoes takes the concept of philanthropy one step further. TOMS blends a for-profit business with a philanthropic component in what it terms the one-to-one model. For every pair of shoes sold, another pair is provided to a child in need. Recently, TOMS has also expanded into eyewear. For every pair of sunglasses sold, a person with vision problems in developing countries receives surgery, prescription glasses, or medical treatment to help restore his or her sight. Unlike many nonprofits, TOMS' for-profit business enables the company to support its philanthropic component, which keeps the company from having to solicit donations. The idea for TOMS Shoes occurred after founder Blake Mycoskie witnessed the immense poverty in Argentinean villages-poverty so bad that many families could not afford to purchase shoes for their children. Recognizing the importance of shoes to health and education, Mycoskie decided to create a new business that would consist of two parts: TOMS Shoes, a for-profit business that would sell the shoes, and Friends of TOMS, the company's nonprofit subsidiary that would distribute shoes to those in need. For his original product, Mycoskie decided to adopt the alpargata shoe worn in Argentina. The alpargata is a slip-on shoe made from canvas or fabric with rubber soles. After a Los Angeles Times article featured Mycoskie's new business, demand for the shoes exploded. Unfortunately for Mycoskie, he did not have enough shoes to fill the orders. Mycoskie was able to work out the product shortage, and today TOMS is a thriving business. After distributing its one-millionth pair of shoes in 2010, TOMS began to consider other products that could be used in the one-to-one model. "When I thought about launching another product with the TOMS model, vision seemed the most obvious choice," Blake Myscoskie explained. Because 80 percent of vision impairment in developing countries is preventable or curable, TOMS decided that for every pair of sunglasses it sold, the company would provide treatment or prescription glasses for those in need. TOMS chose Nepal as the first country to apply its one-to-one model. TOMS takes its obligations for social responsibility seriously. The company builds the cost of the extra pair of shoes and eye care into the price of the products it sells. TOMS also works closely with local humanitarian organizations. "With TOMS we always work with local nonprofits or NGOs to understand what the need is in a community before we just go in and start giving," said Liza De La Torre, VP of sales and marketing at TOMS. Customers who do business with TOMS feel committed to the company because they know that their purchases are going toward a good cause, even if they might pay a bit more in the process. TOMS goes to great lengths to educate the public about the importance of its mission. Although it does not have a marketing budget, the company provides internship opportunities and engages brand ambassadors at universities to spread the TOMS message. Every year the company promotes the One Day Without Shoes campaign, in which participants spend one day without shoes to understand what children in developing countries must undergo daily. These events have been supported by celebrities such as Charlize Theron, Kris Ryan, and the Dallas Cowboys Cheerleaders. Despite TOMS' clear philanthropic component, risks for misconduct still exist. The company uses factories in China, Argentina, and Ethiopia for manufacturing, which creates complex supply chain relationships that must be carefully managed. TOMS created a set of manufacturing standards based upon International Labor Organization compliance standards for its manufacturers. The company regularly performs audits to check that the factories are complying with company standards. TOMS also seeks to create strong organizational relationships with its employees and volunteers. The company often allows employees to participate in Shoe Drops (distributing the shoes to children) so they can see firsthand how their efforts are helping others. Despite its success, TOMS' mission is far from complete. As its expansion into eyewear demonstrates, the company is looking for new opportunities for applying its one-to-one model. TOMS demonstrates how an innovative concept and the ability to incorporate philanthropy into business operations can create a successful company that can make a difference. Do you think TOMS is successful because of its unique products, or is it the firm's approach to social responsibility?
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Suppose that in your job you face situations that require you to make decisions about what is right or wrong and then act on these decisions. Describe such a situation. Without disclosing your actual decision, explain what you based it on. What and whom did you think of when you were considering what to do? Why did you consider them?
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When developing a marketing strategy, companies must consider that their decisions affect not only their own company but also society in general. Many socially responsible and ethical companies identify their intentions as part of their mission statement, which serves as a guide for making all decisions about the company, including those in the marketing plan. To assist you in relating the information in this chapter to the development of your marketing plan, consider the following: Using Table 4.3, identify additional issues related to your product for each of the 4Ps. img The information obtained from these questions should assist you in developing various aspects of your marketing plan found in the "Interactive Marketing Plan" exercise at www.cengagebrain.com.
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At Timberland, Doing Well and Doing Good Are Laced Together Timberland's well-known name and tree logo are good clues as to how much this multinational firm cares about sustainability. The company, headquartered in Stratham, New Hampshire, started out manufacturing shoes and boots and later expanded into apparel and accessories. Today, Timberland sells through its own network of stores as well as through thousands of department and specialty stores worldwide. It also operates e-business websites in the United States, the United Kingdom, Japan, and France. The firm was so profitable that it was acquired by VF Corporation, owner of brands North Face and Wrangler, for $2.3 billion. The acquisition was the largest in the corporation's history. Timberland's $1.5 billion in revenue comes from sales in North America, Europe, and Asia. To stay on top of fast changing trends in the world of fashion, Timberland maintains an international design center in London. It seeks to develop high-quality outdoor products to improve the lives of its customers and communities, as well as to inspire them to make a difference in the world. As a result, the company's long-term strategy for success combines a comprehensive social responsibility agenda with careful planning for the ever-changing marketing environment. Four Pillars of Social Responsibility Timberland's social responsibility agenda rests on the four "pillars" of energy, products, workplaces, and service. Each pillar is associated with specific short- and long-term targets that Timberland has established with the input of its stakeholders. Under the first pillar-energy-the company has reduced energy consumption, slashed harmful greenhouse gas emissions, and increased its use of power from renewable sources. It is also increasing the use of virtual meetings to cut down on employee travel, which saves energy as well as time and money. The second pillar, earth-friendly products, is a key element in Timberland's social responsibility agenda. More than one-third of its shoes contain some recycled material. Its Earth keepers shoes have been specially designed to incorporate a combination of organic, renewable, and recyclable materials. Some Earth keepers are not only made from old plastic bottles and other recycled content, they can be completely disassembled and the components can be reworked into new Timberland shoes. Soon, all Timberland products will be labeled to show their impact on the planet. The third pillar relates to the workplace. Timberland sets tough standards for fair and safe working conditions at all the factories and facilities that make its shoes and clothing products. Although it owns and operates a factory in the Dominican Republic, the company buys most of its products from a global network of suppliers that employs 175,000 workers in approximately 300 factories spread across 35 countries. Timberland works with the VF Corporation's audit team to ensure that suppliers are complying with their detailed code of conduct, which forbids discrimination, child labor, and unsafe practices. Factories are audited regularly and when violations are found, Timberland follows up to be sure that the necessary workplace improvements are made. Timberland employees are encouraged to call the Integrity Line, a 24-hour hotline answered by a third party, whenever they want to report workplace concerns, submit ideas, or ask questions. The fourth pillar, service, has long been part of Timberland's cultural fabric. Every full-time Timberland employee can take up to 40 hours, with pay, to volunteer in his or her community. In addition, Timberland's former CEO began the tradition of Serv-a-palooza in 1998 when he set aside one work day for global volunteerism. Today, employees are encouraged (but not required) to devote this annual day of service to volunteering in their communities. Some employees use the day to clear nature trails, some pick up trash from riverbanks, and others grab their tool belts to build arts facilities or repair neighborhood schools. In more than a decade with Timberland, the former vice president of corporate culture enthusiastically laced up his Timberland boots and volunteered on three continents, doing everything from protecting the rainforest to improving the gardens around a senior center. The Changing Marketing Environment Because Timberland has a diverse product portfolio and is active in retailing and wholesaling as well as manufacturing, it has to keep an eye on competitors in several industries. One strong U.S.-based rival is Wolverine World Wide, which manufactures Hush Puppies, Sebago, Merrell, Patagonia Footwear, and other brands of casual and work shoes. Like Timberland, Wolverine operates company stores in the United States and the United Kingdom. The U.K.-based R. Griggs Group, maker of Doc Martens boots, shoes, and sandals, is a key competitor. Finally, particular Timberland shoe styles compete directly with footwear marketed by the world's largest athletic shoe companies. Economic conditions can also affect Timberland's marketing situation. During the recent recession, when many consumers held back on discretionary purchases, the company's overall revenue fell. However, sales of its work boots remained flat, even as some competitors saw their sales drop. Timberland's marketing executives realized that the brand was holding its own among construction workers and other buyers who need tough, reliable footwear to use day in and day out. Timberland's marketers have also noticed that the challenging global economic situation is influencing the way consumers think and feel about buying products such as shoes and clothing. When unemployment was low and buying power was high, consumers often used such purchases as a way to display their wealth. As the economy moved into recession, however, many cash-strapped consumers cut back on purchases of showy, expensive items, in favor of products that conveyed a more subtle message about cultural values such as concern for the environment. Today, "self worth is tied to thoughtful purchases as a way to impress your peers, instead of conspicuous consumption," states Timberland's senior director of merchandising. In addition to its international marketing initiatives in China and Europe, Timberland sees promising opportunities for growth in India. It signed a strategic alliance with Reliance Industries, a local company known for marketing international brands. Reliance distributes shoes, boots, and clothing through Timberland-branded stores and through selected department stores in major Indian cities. Timberland's CEO says that Reliance has "a clear understanding of the Timberland brand and consumer" and, just as important, it's "as committed as we are to our ideology and passion for the outdoors." High-Tech Shoes and Communications Timberland is applying technological advances to improve its footwear products and to reach out to customers through digital media. For example, to satisfy customers' needs for comfort, the company has introduced patented "Smart Comfort" footbeds in its shoes. As part of its commitment to sustainability, Timberland makes Green Rubber soles from recycled rubber and is designing its new footwear products for easy disassembly and recycling at the end of their useful lives. Moving into digital media is helping Timberland bring its marketing messages to the attention of consumers who use the Web. Through brand-specific sites, Facebook fan pages, blog entries, a Twitter feed, YouTube videos, and online games, Timberland supplements its traditional marketing activities and engages consumers who seek a deeper level of involvement with their favorite brands. What kinds of ethical issues does Timberland face in its marketing? What is the company doing to address these issues?
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If you had to conduct a social audit of your organization's ethics and social responsibility, what information would most interest you? What key stakeholders would you want to communicate with? How could such an audit assist the company in improving its ethics and social responsibility?
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