Technology Development Of The Automotive Industry And The...

The importance of new technology development in the automotive industry and the enhancement of fossil fuel alternatives. With countries advancing their energy output the strain on natural resources is increasing, leading to finite resources which will no longer be a viable option in the near future. Research has been conducted and other options have been found some of which include Plug-in electric vehicles (PHEVs) and other electric or bio fuel alternatives. In the recent years energy consumption has been reduced in compression ignition engine cars which have put less of a strain on the finite fossil fuels. Development of software has commenced in vehicles to help reduce mileage and usage of fuels either fossil fuel or an electric†¦show more content†¦Many countries have taken the lead in this field, causing others to invest into this research and in turn into production of this system among vehicles for the general public. The general public have shown interest in the development and production of fuel alternative vehicles to stop pollution and other damaging effects on the planet. Oleander (2016) states that in effect this has lead to lunar mining which would stop the development of a asymmetrical planetary alignment, causing the earth to tremble on the rotation around the sun. They then state how the fossil fuel consumption on the earth shows a threat to the stability of the planet. Highly populous countries continue to develop new economies, causing their energy consumption to as well. The world cannot sustain this increased demand in natural resources and energy production. Currently fossil fuels are providing most of the world’s energy and this use has caused irrefutable damage to the environment. The primary energy demand is satisfied via exhaustible energy sources some examples being natural gas, nuclear energy and coal. Due to the raise in energy consumption the production of these energy methods is inadequate due to production and distribution being pushed further behind. Mining these finite resources with this current energy demand is pushing the world into more eco-friendly options like a PHEV or a hybrid car, rather than relying on fossil fuels which

De Beers And The Diamond Industry - 1213 Words

The De Beers Group of Companies established itself in the diamond industry in the late 1800’s and it was only a matter of time until De Beers owned virtually every diamond mine in South Africa. Diamond distributors joined up with De Beers because of similar interests: they wanted to create a scarcity of diamonds, so that high prices would follow. Eventually, De Beers would establish exclusive contracts with suppliers and buyers, making it impossible to deal with diamonds outside of De Beers. For the remainder of the 20th century, the business model was the same: A subsidiary of De Beers would buy the diamonds and De Beers would determine the amount of diamonds they wanted to sell, and at what prices. In turn, De Beers funneled all of the†¦show more content†¦However, there is an incentive for them to work together, as they would be able to maximize their profits across the industry rather than competing amongst one another. This way, a cartel can be established to fix selling prices, purchase prices, and reduce production using a variety of tactics. In the case of when De Beers was the sole producer of diamonds in the market, they were the gold standard of monopolies for the better half of the 20th century. Essentially, De Beers could choose to produce at any point on the market demand curve. They found it to be profitable to drive others out of the industry by purchasing competitor’s production of diamonds. The company exercised its control of the industry, establishing barriers to entry, by convincing competitors to join its single channel monopoly. When rivals opted to try and coexist with De Beers, they flooded the market with diamonds to make it unprofitable for the competition to remain. Additionally, De beers would purchase and stockpile diamonds produced by subsidiaries to control prices by limiting supply. While other commodities have seen their price fluctuate over the years, De Beers was able to establish a continuously rising price for diamonds since the Great Depression. Throughout the 20th century, De beers used their dominant position to manipulate the diamond market. They maximized the price consumers were willing to pay through strategic marketing that suggestedShow MoreRelatedThe Price of Diamonds Is Too High The price of diamonds has been controlled, up until recently, by1700 Words   |  7 PagesThe Price of Diamonds Is Too High The price of diamonds has been controlled, up until recently, by cartels. Cartels are formed when suppliers of a particular product or service formally agree not to compete with one another. Cartel agreements usually determine the price, output and supply levels as well as where and to whom the product will be distributed to. De Beers is one of the commonly heard names with regard to diamonds. Up until recently De Beers controlled the diamond industry. 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Cask Of Amontillado (492 words) Essay Example For Students

Cask Of Amontillado (492 words) Essay Cask Of AmontilladoOlliver StedenkoCom 131Comp LitEssay #1The Plot of Edgar Allan Poe’s â€Å"The Cask of Amontillado†With the completion of the second paragraph in Edgar Allan Poe’s â€Å"The Cask of Amontillado,† the plot has been made mostly clear. Although you are unaware of who the protagonist is, the motives of this unknown character are very obvious. He has vowed revenge and intends to murder Fortunato. Poe clearly states this by saying â€Å" he did not perceive that my smile now was at the thought of his immolation.† (paragraph 2) An unclear aspect of the plot though, is that Montresor had planned and carefully designed this act of murder. Planning a murder, an untraceable one at that, would need a formidable amount of preparation. Montresor first needed a way to get Fortunato somewhere in which they would not be heard or seen. He does this by tempting Fortunato to come visit his vaults to taste his newly purchased Amontillado. What makes this portion of Montresor’s plan significant is the time in which he chose to do so. At â€Å"about dusk† during â€Å"the supreme madness of the carnival† (paragraph 4) is a perfect time for Montresor to disappear with Fortunato unnoticed. And the fact that Fortunato is wearing a â€Å"motley† (paragraph 4) or a clown costume only helps ensure that he won’t be recognized when in the presence of Montresor. Also, Montresor explains that no attendants would be present in his home because â€Å" they had absconded to make merry in honor of the time.† (paragraph 24)The next set of evidence supporting the idea that Montresor had put a lot of thought and planning into the murder is when he pulls the trowel out from the folds in his cloak. That wouldn’t seem like a big deal until you continue reading and learn exactly how Montresor goes about killing Fortunato. The fact that Montresor â€Å" uncovered a quantity of building stone and mortar † (paragraph 75) from underneath a pile of bones, and just happened to have his trowel inside his roquelaire seems a little peculiar. And there was enough materials there for him to build a complete wall over the niche measuring 6 foot by 3 foot. The staples and chains that were already attached to the wall, deep in the recess, before the two men arrived seems a little mysterious as well. Although Poe isn’t blunt and doesn’t just come out and say that Montresor had carefully designed the act in which was done to Fortunato, I believe that he tries to make it fairly obvious. He provides a lot of details and supporting evidence that may lead one to believe that it was a carefully planned homicide. The way in which he describes and chose to play out the situation, hints at what Poe was trying to reveal in this horrific short story. Poetry Essays

World Religion and Man2 Essay Example For Students

World Religion and Man2 Essay peace of mind and that rituals do not erase the effects of pass acts; 2.Right motives: the quality of the drive behind the thinking and being free from carnal thirst, malevolence, cruelty, etc; 3.Right speech: not indulging in cruel and harsh talk, thereby being able to establish a link between right motives and right action; 4.Right action: any actions that proceed from an unobstructed mind. This also includes abstaining from unwholesome actions and performing those which are beneficial; 5.Right means of livelihood: the idea of not harming living things through any means, and to abstain from indulging in anything which would cloud the mind; 6.Right effort: efforts taken to encourage the development of of the other paths and to discourage any hindrances; 7.Right mindfulness: to prevent the excessive development of of one path at the expense of another; 8.Right meditation: to quiet the mind and present true pictures to the mind of any hindrances to the Middle Path.2 The Middle Path, a s seen above, is an ethical code for a relatively simple life of performing good deeds, not harming yourself and others, and maintaining ethical thoughts and frame of mind. By following the Middle Path, a person would eventually reach enlightenment and be able to achieve Nirvana. To the Buddha, Nirvana is the extinction of self hood and a final reunion with the Great World Soul3. Similar to Buddhism, Islam is also a simple faith with simple teachings, with an easily obtainable objective. Islams beliefs though are held in a monotheistic framework ,and in what is known as the Five Pillars of Islam. The supreme deity of Islam is Allah and obeying the will of Allah is done by following the Five Pillars of Islam. They are thus: 1.Every Muslim must utter There is no God but Allah and Mohammed is his prophet; 2.Every Muslim must pray five times a day and publicly on Friday at noon; 3.Every Muslim must give alms(charity) to the poor and unfortunate; 4.During the holy month of the Ramadan, e very Muslim must fast from dawn to sunset; and 5.Every Muslim must make a pilgrimage to Mecca at least once in their lifetime.4 Along with the Five Pillars, Muslims(followers of the Islam faith) must also abstain from eating pork, gambling, drinking alcoholic beverages, and engaging in dishonest behavior. These rules are the basic laws a Muslim must obey, and they do not require too much effort from the individual or put a strain on the individual. By following them and by obeying the will of Allah, a Muslim is guaranteed a place in an eternal paradise filled with sensual delights. This eternal paradise is the objective of those who are faithful to Allah and Islam. Confucianism is also similar to the others, in its simplicity in teachings and adherence. First Confucianism deals with the rational cosmic order and the organization of worldly affairs. Confucian belief is that all humans were endowed with their own Dao(Way), which was dependent on their role in life, and it was the indi viduals duty to live accordingly to their Dao, and not to ignore it. And by following their Dao Bibliography: We will write a custom essay on World Religion and Man2 specifically for you for only $16.38 $13.9/page Order now

Discussion the meaning of the word of God as treated in the Old and New Testaments

Free Essays on Through My Eyes

Through My Eyes What is religion? One might agree it is a broad way of life, a belief regarding one’s relationship with the universe, or even God. In some societies today, religion is still a way of life, and it has become a way of providing salvation and sanctuary to an individual or community. Throughout my childhood, I have memories of Sunday school, church, and prayer. My brother and I were brought into the church and taught the "ways of a Catholic." For many years I blindly believed everything that I was taught, did as I was told and acted in the proper Catholic manner. The thought never crossed my mind to question anything or disobey anyone in fear of upsetting my peers and more importantly my mother. She always said to believe in what your heart tells you, but when you don’t know any better, what do you believe? I felt somewhat trapped, and unable to explore the questions I had about God, the universe, life, and death. All my life my mother taught me that church was time to grow and become closer to God, but as a child I what does this mean? Does it mean getting to know someone unreal, or talking to someone that doesn’t talk back? For me church was just another routine. When Sunday morning rolled around, we would all get up, dress up, and hop in the mini-van to go to church. We would then sit there for about an hour listening to the priest rambling on about who knows what. My mind would wander, and I would ask my mother questions and be shushed from the people behind me. Then came Sunday school where we were supposed to learn about what we heard in church. Instead we colored, painted, and goofed off. As I went through puberty, I began to wonder it’s as though I gained a mind of my own and began to question the ideas and rituals of Catholicism. I found myself drifting away from my beliefs, but I never went against them. From my experiences I have learned that society judges what is different. No one likes to be... Free Essays on Through My Eyes Free Essays on Through My Eyes Through My Eyes What is religion? One might agree it is a broad way of life, a belief regarding one’s relationship with the universe, or even God. In some societies today, religion is still a way of life, and it has become a way of providing salvation and sanctuary to an individual or community. Throughout my childhood, I have memories of Sunday school, church, and prayer. My brother and I were brought into the church and taught the "ways of a Catholic." For many years I blindly believed everything that I was taught, did as I was told and acted in the proper Catholic manner. The thought never crossed my mind to question anything or disobey anyone in fear of upsetting my peers and more importantly my mother. She always said to believe in what your heart tells you, but when you don’t know any better, what do you believe? I felt somewhat trapped, and unable to explore the questions I had about God, the universe, life, and death. All my life my mother taught me that church was time to grow and become closer to God, but as a child I what does this mean? Does it mean getting to know someone unreal, or talking to someone that doesn’t talk back? For me church was just another routine. When Sunday morning rolled around, we would all get up, dress up, and hop in the mini-van to go to church. We would then sit there for about an hour listening to the priest rambling on about who knows what. My mind would wander, and I would ask my mother questions and be shushed from the people behind me. Then came Sunday school where we were supposed to learn about what we heard in church. Instead we colored, painted, and goofed off. As I went through puberty, I began to wonder it’s as though I gained a mind of my own and began to question the ideas and rituals of Catholicism. I found myself drifting away from my beliefs, but I never went against them. From my experiences I have learned that society judges what is different. No one likes to be...

Accounting (walmart) slp module 3 Essay Example | Topics and Well Written Essays - 500 words

Accounting (walmart) slp module 3 - Essay Example Amounts are in million. EBIT (earnings before interest and taxes); TCE (total capital employed). As could be realized, ROCE is impacted by capital turnover (sales/TCE) and operating profitability (EBIT/sales) which all settles down to ROCE being (EBIT/TCE). Thus, Wal-Mart took decisions which impacted their, capital turnover, making it to decrease every year, from 3.2 in 2004 to 2.84 in 2008. As for her operating profitability of sales, an increase was realized between 2004 and 2005, (5.81% to 6.08%) but it started declining in 2006 (6.0%) and in 2007 and 2008 it was 5.88% and 5.81% respectively. With this trend of events, Wal-Mart’s ROCE kept on declining as she employed more capital. Thus, the question now to answer is; due to the cost decisions taken in Wal-Mart, is her financial health improving or failing? Inventory rose every year but thanks to rising sales between 2004 to 2007, inventories appears to be under control. But this was not the case in 2008 whereby inventory increased with sales declining. But, how many times a year did Wal-Mart sell out her inventory? Here, Wal-Mart had a promising trend as the number keeps on increasing. Account receivables grew 61.7% between 2004 and 2008, which was faster than sales which only grew 31.7% between 2004 and 2008. Thus, money owed to Wal-Mart was increasing faster which was not a decision as her working capital is impacted

Satire in Catch 22 Essay Example | Topics and Well Written Essays - 1000 words

Satire in Catch 22 - Essay Example Being able to view war from both within and outside the bureaucrats’ decision-making zone, Heller’s readers can assess the causes of war, not on the traditional right-or-wrong judging standard, rather on the basis of the underlying bureaucratic motivation that has remained unnoticed by the critics in the post Second World War period. One of Heller’s twisting propositions is that since the concept of right-or-wrong and the glory of war are essentially the projections of the bureaucratic polity, one should delve into the bureaucrats’ perception of the war in order to trace their idiotic manipulation of the ideology of war. Heller’s success lies in his ability to take his readers to an excursion to the bureaucrats’ decision-making zone that often is forbidden to the mass commoners. From the laughter-invoking bureaucratic whims, he gradually takes his readers to a more serious exploration of the destructive effects of these warring whims on the s oldiers as well as the mass commoners’ life. Focusing on the experiences of a bombardier, Yossarian, at the Air of Pianosa in Italy Heller goes on exhuming the offstage perversion, folly and idiocy of bureaucratic systems in modern society. Putting the right vs. wrong rhetoric of the stories on the Second World War aside, Heller questions whether the bureaucrats’ purpose behind the curtain of patriotism and honor are healthy for modern society. He attacks on the composition of the provision of Catch-22 that is manipulated by different military and government official differently. These different interpretations of the doctrine of Catch-22 by different persons are inspired by their own ends. Therefore, the Catch-22 doctrine serves the military officials as a blank check to do whatever they want to. The military officials use it to achieve their own ends, whereas it is manipulated by them as a means to suppress their subordinates. By putting the self-contradictory and ci rcular logic of Catch-22 in application, Heller has tried to lay the problems and duality of the bureaucratic reasoning and operation. The narrator of the novel describes Catch-22 in the following manner: â€Å"There was only one catch and that was Catch-22, which specified that a concern for one's safety in the face of dangers that were real and immediate was the process of a rational mind.† (Heller 78). But in the lines that immediately follow this definition, the narrator upholds the peculiarity and circularity of the provision, as he says, Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn't, but if he were sane he had to fly them. If he flew them he was crazy and didn't have to; but if he didn't want to he was sane and had to. (Heller 176) Yossarian become delighted to find that this clause can keep his friend Orr away from going to further missions. But Heller’s readers cannot but note the fact that this clause provides the military bureaucrats with enormous power to do anything without being accountable to anyone, as at some point, a military police says, â€Å"Catch-22 states that agents enforcing Catch-22 need not prove that Catch-22 actually contains whatever provision the accused violator is accused of violating.†

Interpreting and Aligning National, State, and Local Standards Research Paper

Interpreting and Aligning National, State, and Local Standards - Research Paper Example These standards were made in line with both college and work expectations and they are clear, understandable and consistent. According to CSSI (2012), these standards include rigorous content and application of knowledge through high-order skills and they are built upon strengths and lessons of current state standards. They are also evidence based and thus they are expected to contribute significantly to the improvement of quality and value of education in all the states in this country. These common core standards have several advantages that result after they have been fully implemented in the states. The common core standards help to identify all stakeholders in education and the knowledge skills that the students must acquire for them to be successful in college and career (Kendall, 2011). This is a very great advantage to the stakeholders since it can assist them in tailoring their activities towards facilitating the students to acquire these kinds of knowledge. Another advantag e is that they help in the achievement of some kind of uniformity in terms of skills and knowledge developed by students by the time they join college or work among all the states. These can enable the students to attend a college in a state different from his state of origin or even work effectively in a state different from the one in which he attended school. ... They make the experienced teachers incur some difficulties in their attempt to adjust their activities to suit a particular set of students. Another disadvantage is that they do not favor all the states equally since they can be influenced by the learning environment. This makes some content of these common core standards require some adjustments and modification to meets education requirements in a particular state. The standards that currently have the strongest influence on the education environment I work in are the common core standards for language art. These standards are concerned with the standards that need to be achieved in reading, writing, listening, speaking, and language translation (CCSSI, 2010). These standards will be having a great influence on the education environment in which I will be working. This is because they will be the ones shaping most of the activities that I will be undertaking in my effort to promote language learning among my students. One of the wa ys they will be shaping my activities is influencing the choice of activities to use in my teaching. My teaching activities will be varying depending on the learning objectives of my lesson. If the learning objectives are to promote language listening skills, then in designing my teaching activities I will be considering the common core standards for language listening knowledge. If the learning objectives are concerned with promoting speaking skills, then I will be putting into consideration the common core standards for such kind of knowledge and so on. This would make the lesson meet the required standards, enhancing its chances to help the students achieve the level of competency required. These common core standards will also be influencing the kind of teaching

The International Market Audit And Kangaroo Meat Products Marketing Essay

The International Market Audit And Kangaroo Meat Products Marketing Essay The Report Covers an International Market Audit and a Marketing plan for the export of Kangaroo meat products in the German market by Ace Corporation. The Companies main objective is to sell Kangaroo meat products like (sausages, diced meat, fillets and mince meat) in the German market to broaden its market space. The Vision of the company is Creating an edible product for human consumption which will be so tempting and full of nutrition that all would just want to say Lets eat Kangaroo. The Kangaroo Industry is in operation in all states of Australia except Victoria and NT. Its reasonably big industry collecting revenue of $270 million per year. Every state has to operate under the Kangaroo Management plan which is controlled by the Conservation authorities within the state and when overseas its controlled by the Federal authority. Germany is one of the worlds largest economies. Having a market share of 33.5 per cent in the European meat market. The Meat markets make a lot of profit reaching nearly $7.8 billion in the year 2007, and are mostly likely to touch $9.5 billion by 2012. (Frozen Food Global Industry Guide, 2008). The Germans are adapting to the new culture surrounding and are becoming more and more health conscious with passing time. After having understood the market trends and successfully completing the economic and socio-cultural analysis Ace Corporation has chosen Germany for the international export of Kangaroo meat products, which is very healthy , high in protein , iron and very low in fat perfect for our target market being families. (Phillips, C., n.d.). The Product Kangaroos are very high in number and are stated as an iconic animal and are known for their uniqueness in Australia. They give off one third as much methane as ruminant animals, like cows o goats. They are responsible for 60 per cent of the global methane emission. They whole idea behind entering into this industry was to reduce the highly populated number of Kangaroos creating a healthier environment and provide a cuisine which the consumers enjoy to eat as a part of their meals.( Kangaroo meat, n.d.). Below is the chart showing the population of Kangaroos in Australia 2009 Population estimates for kangaroos within the commercial harvest areas State Red (Macropus rufus) Western Grey (Macropus fuliginosus) Eastern Grey (Macropus giganteus) Wallaroo/Euro (Macropus robustus) South Australia 1,031,000 658,000 465,000 Western Australia 904,506 1,653,464 New South Wales 2,456,795 722,255 3,909,270 114,966 Queensland 5,004,684 7,714,654 2,405,729 Grand Total 9,396,985 3,033,719 11,623,924 2,985,695 Source: Kangaroo population estimates Kangaroo Meat which we will be exporting from Australia is meant for Human Consumption only, as 70 per cent of kangaroo meat is exported to different countries around the world. It is considered as ideal meat for maintaining a balanced diet. It is also low in cholesterol and has 24% of protein and minerals. The fat contain is less than 2%. Nutrition Content as Compared to other meat Protein (%) Fat (%) Kilojoules (per 100g) P/M/S ratio Cholesterol (mg/100g) Iron (mg/100g) Kangaroo 24 1-3 500 1.5(1)1 56 2.6 Lean Lamb 22 2-7 530 0.1(0.9)1 66 1.8 Lean Beef 22 2-5 500 0.1(0.9)1 67 3.5 Lean Pork 23 1-3 440 0.2(1.3)1 50 1.0 Lean Chicken Breast 23 2 470 0.4(1.5)1 50 0.6 Rabbit 22 2-4 520 0.8(0.5)1 70 1.0 Source: Food GL Fogerty AC. 1982. The fatty acids of Kangaroo and wallaby meat. CSIRO Food Research Quarterly, 42, 57-61. Kangaroo Meat is available in various shapes and sizes for human consumption a chart of different types of kangaroo meat cuts has been put up in the Appendix 1. Evaluate the Product as an innovation as it is perceived by the intended market. Relative Advantage People of Germany have adapted to new food habits and have become more calorie and cholesterol conscious in their intake. Percentage of protein in Kangaroo meet is high in comparison to beef and pork. People of Germany like game meat, as well are always ready to try different types of meat products. (Flannery, n.d.). An added advantage of Kangaroo meat is that it is 30% cheaper than beef, which simultaneously increases the scope of opportunities to sell our product into the German market. (More Aussies dining on Skippy, 2008). The relative advantage of our product is more as compared to other products. Compatibility Kangaroo meat is one of the healthiest red meat, available for human consumption. The fat levels in kangaroo meat are less than 2% which creates a positive mind set for the consumer to buy our product as these days consumer are very health conscious. Kangaroo meat can be used exactly like other red meats; its also available in a wide range of cuts. (Kangaroo Meat for Human Consumption,n.d.). Complexity Our Kangaroo meat is produced under high strict hygiene legislation and has an even healthier disease free status than domestic animal meats. The method of cooking kangaroo meat is easy and not to complex. One thing which needs to be kept in mind is overcooking which will dry out the meat. Trial ability As Kangaroo meat falls under the category of game meats and is one of the rarest breed of animal found for human consumption it is also very inexpensive to purchase, this automatically encourages the consumers in Germany to try this product for a minimum expense from their pockets Observability Kangaroo meat is easy to cook and contains high levels of protein, iron, zinc, B-group vitamins namely riboflavin, niacin, Vitamin B6 and Vitamin B12. A variety of dishes can be cooked from kangaroo meat. German Consumers cab be rest assured that our kangaroo meat is safe to eat and is processed to meet the strict Australian and export Standards. (COOKING TIPS.n.d.). Major problems and resistance to product acceptance based on the preceding evaluation. The Main issue or the area of concern for Kangaroo Meat is the method of cooking as it is low fat content, can easily dry out during the cooking process. Therefore it is recommended to follow some simple cooking steps to retain moisture and the meat flavour. Kangaroo meat should be handled and cooked like any other lean low fat red meat. (COOKING TIPS.n.d.).The Haziness of cooking kangaroo meat discourages many consumers. Also another problem with Kangaroo meat is that Kangaroo is the national animal of Australia. The consumers which are fond of meat products are very taste sensitive, they are aware of kangaroo products being available in the market but havent got the right approach and means to try it out. The Market Describe the market(s) in which the product is to be sold. The country that we are focusing on selling our product is Germany. The market audit and plan will be based on strategically approaches used to introduce our product into the market, specifically looking at the culture, political and economic environment. 1. Geographical region(s) We are focusing on Berlin being the capital of Germany, as it is not possible to cover the entire market of Germany in the first year of business. Berlin is the most important state in Germany out of the 16 states. It has a total population of 3.5million. Berlin is one of the most significant centres in European politics, culture and science. Berlin is also a working capital city and a province of Germany. It is also famous for its cultural institutions and a highly visited tourist destination.(Berlin ,Germany,n.d.) Forms of transportation and communication available in that region. Germany is well known as the nation of car lovers. Public Transport is excellent in Germany. Their rail network is very comfortable, reliable and fast. All major cities have an impressive public transport system like Tube, Tram and Busses which are very reliable. Many cities in Germany encourage cyclists with elected bicycle lanes. ( Getting Around in Germany,n.d.). For Transportation and communication when exporting and selling (in the Target market) our product, we will be using only Air Transport and Road Transport. Consumer buying habits. Product-use patterns The German cuisine is very different from region to region, Aswell we have discussed this in ou socio-cultural analysis which gives a clear understanding of the audience in the target market. As the Germans is health conscious and very particular about their calorie intake. There are more than 1500 varieties of sausages available.(Cuisine,n.d.). As our kangaroo meat is very healthy, light in consumption less in fat and easy to cook, it fits right as a part of their meals keeping in mind the health factor. Product feature preference According to a survey by GfK whose studies and analyses are based on consumer shopping behaviour state that the German consumers have a per capita retail purchasing power of around à ¢Ã¢â‚¬Å¡Ã‚ ¬5,201 in 2009. GfK GeoMarketing has understood and calculated the Germans purchasing power by region, categorizing the results according to around 60 food- and non-food product lines.(New study on Germans regional consumer preferences,n.d.). As the Consumers in Germany have high purchasing power , it gives us a green flag to enter their market and sell our chosen product. Untitled.png As seen in the above chart the German consumers spend round 12.6% on health and hygienic products. In which they are mainly looking for nutritious and healthy intake of food. In that case kangaroo meat which we want to sell meets their demands and expectation levels. Shopping habits Shop till you drop is the tag line which is fixed to the Germans shopping habits. Shopping is called as a national pastime for the Germans. Malls are not that well- developed in Germany so there are more of Out Malls which have been opened up. Place lile Big Box, hyper-stores, discounters, Marktstrassen or market streets are very popular to buy their products on daily needs.(Shopping in Germany,n.d.). Specialization shops are very popular and easily recognized in food stores. The Metzgerei (butcher), Backerei (bakery) and Konditorei (pastry shop) are in business by people of their own profession. Germans basically buy their meat from local butchers instead of buying it from supermarket. Their preference is quality, comfort, prestige, convenience and price when buying consumer durables. alternatively, price dominates other factors in case of everyday goods.(Shopping in Germany,n.d.). Distribution of the product Typical retail outlets The German market is the biggest and the most important part of Europe, the retail market is very competitive and segmented for most of the products. The highest level of importance is given to the Quality and service of the products. ( Germany MARKET ACCESS,n.d.). The German retail market is distributed into large Independent shops, having a high proportion of distribution in city centres and urban areas. Also they are quite a few numbers of hypermarkets followed by discounted stores which are the main attractions to customers. The market also gives high importance to distance selling which are mail order, e-commerce and teleshopping.( Germany MARKET ACCESS,n.d.). Our strategy here will be the approaching the specific shops which will sell our products to the consumers at a reasonable price, which specially assures good quality and taste. Product sales by other middlemen For selling a variety of products in Germany, the best approach is to involve or appoint an independent regional agent who understands the surrounding and culture, having a clear understanding of the situation. Also taking into consideration that Germany holds the ranking for organising the worlds largest trade exhibitions and fairs, proving very important for companies to build their image and status in the surrounding and simultaneously understand who its competitors are, how the market operates and how to create goodwill amongst the bigger guns. (Distribution, n.d.). Advertising and Promotion Advertising media usually used to reach your target markets(s) Advertising is one of the most evident forms of communication. The types of advertising most used in Germany are Televisions, Print ads( Newspapers), Outdoor, Radio, Online and Magazines, for any product to be introduced in this target market these types of adverting media are highly recommended.. (Germany Marketing Strategy,n.d.). As mentioned in our earlier economic analysis report that 51% of citizens obtain new through the medium of television, 22% get the information from newspapers or Magazines and 6% make use of the radio. Advertising is given the utmost importance in any company or to any product before getting itself introduced to the world and especially in Germany for us to introduce our Kangaroo Meat we will need to approach the right medium to give us the right push in to the target market. Sales Promotions customarily used Sales Promotions acts as the key factor in adding value to the sale. Sales promotions are usually used in the B to B Market, where the consumer goods move fast in sales. Germany on the other hand has some interesting strategies to take from, and undoubtedly these promotional strategies have proven to work in the current market trends. (Phillips, C., n.d.). The Tools used for the promotion of any product have to be taken into effect by understanding the customer sentiments and the way of purchasing, because the need and want are two separate things when it comes to buying a product. Tools like Consumer goods Coupons, Price reduction, Premiums, data base/ direct marketing, are the main sections given high priority in Germany when introducing a product. (Phillips, C., n.d.). Pricing Strategy Pricing is one of the most critical factors when pricing in the International market. Pricing is that element that generates revenue; the remaining elements are driven by cost. The thought that we as exporters need to be cautious when pricing in the Global environment is Counter Trade Requirements, Regional Trading, Increased Competitive Levels, and Standardisation against Localisation Issues etc. (cite text) Customary Mark-Ups The Normal pattern used by most of the retailers for the mark-up is the customary mark-ups which is a 100% .e.g. If our product cost is 12$ it will be sold in Germany for 24$ keeping in mind the conversion cost between the two countries.(Pricing Strategy,2007). In the case of our product we have kept the Customary mark- up price for our retailers as 60% for only the reason being our product is new in the market and even though our competitors exist we have to match the standard Quality and Taste of our product , keeping in mind the affordability factor Types of Discounts Available Discount types are many and have various purposes depending on the situation, the location, the time period or even the market trend. Types of discounts available in the target market are: Paper Coupon Online Coupon Direct Discounts Premiums Reward points Rebates Percentage of total Purchase Cash of total Purchase As for our Kangaroo meat we will only be using the Coupons, Premiums, and direct discount strategy as it is not possible to introduce all types of discount in the first year of production/export. Compare and contrast your product and the competitors product The Main competitors who export Kangaroo meat from Australia are: Macro Meats- Leading producer of kangaroo and wild gourmet game meat Southern Game Meat- Export Kangaroo meat to Europe. DGroot International Food Marketing Exports Kangaroo Meat to the USA. Game meats Australia- Export Kangaroo and Wallaby meat. Ace Corporation main objective is to export Kangaroo Meat. The idea and the purpose behind selling kangaroo meat is that, its low in fat intake and free from chemicals, hormones and pesticide. Its basically an ultimate free range meat which is very high in protein and iron content. Our Tag line says it all Lets Eat Kangaroo our motive being Healthier Kangaroo meat for Human Consumption. One of our major competitors is Macro Meats Competitors Product Macro Meats is our biggest competitor. Macro Meats was established in 1987 with a vision to develop kangaroo meat not only as another meat for human consumption, but to promote kangaroo meats healthy and 100% natural features. The Company Director and Owner Ray Borda has been the man behind this industry for over 22years. Some of the Products sold by them are: Kanga Bangas (Kangaroo Sausages) Kangaroo Mince-1kg Marinated kangaroo steak Kangaroo Mince- 500g Kangaroo Steak Kangaroo Fillets Kangaroo mini roast Kangaroo marinated kebabs. (Products, n.d.). Brand Name They export their product under the name- Macro meats-Gourmet Game. Is a certified meat exporter and is EU accredited. Features Some of their Features which give them a higher advantage are : Chemical free Processed as per Quality assurance program Gluten free 98% fat free High in Iron High in Protein Package Macro meats-Gourmet Game have a standardised packing pattern for all their products as they have a number of products which they export as mentioned above. Their packaging is done by the Australian Supermarkets and the kangaroo meat is approved by the National Heart Foundation of Australia and many of its products have a Kangaroo fillet Tick Approval. (A Growing Industry, n.d.). Competitors Prices Product Per kg (In AUD) Kanga Bangas ( Sausages) $13.00 Kangaroo Fillets $17.00 Kangaroo Mince 500g $10.00 Diced Kangaroo Meat $12.00 ACE Corporation will be only selling four products in the first year of production/export, for the same reason we have compared prices with only four of our competitors products. Competitors promotion and advertising methods. Macro Meats Slogan is Good for you good for the environment The Advertising methods used by them are mainly through newspapers, Television, radio and the weekly specials booklets distributed by the supermarkets.(Environment, n.d.). Competitors Distribution Channel The Distribution channels used by Macro meats are as follows: Air Transport Distributors Retailers Storage at the arrival airport Truck Transport Custom Duties Freight Forwarder Storage Importers Storage in Processed Chillers Macro Meat Processor Market Size The Australian Kangaroo Industry started exporting Kangaroo meat to Europe in 1959 having a high response to the European game meat. Kangaroo meat which is processed and exported is checked by the Australian Quarantine and Inspection Service (AQIS).( The kangaroo industry2008). The market size for this type of industry is massive and is spread in Germany, Russia, USA, Africa, China, France, and Netherlands. Estimated Industry sales for the Planning year As there are a few organisations already exporting the same product as ours it will be a bit difficult to gain an 100% profit margin. Looking at it from all aspects of the market we have an estimated target of 65% to achieve. Estimated sales for your company for the planning year. The Estimated sales for our first year being in business. Selling Kangaroo meat in the Germany will be approximately % 750,000.00 With an estimated Gross Profit of 16.4% Government participation in the marketplace The German federal government plays a vital role in the German economy, sometimes directly and sometimes indirectly through the effects of other policies on the economy. Germany being a part of the European Union (EU) which assures a Liberal Movement between European countries. Germany is a leader in export thus the entire European union is its Primary trade partner with 47.8% of the German imports and 53.1% of its exports are made with 15 original members of EU.( Foreign trade in figures, n.d.) Agencies There are two Australian Government that have been set up and will be helpful for us to export. They also provide grants to exporters that assist with business development activities. They are listed below: Austrade (Australian Trade commission). Overseas Business Development Grants from the Department of Foreign Affairs and Trade. Regulation The government regulations and list of documents that we will have to comply with, when exporting our product: Kangaroo Harvester accreditation requirements are that each State has a TAFE course which harvesters must pass in order to gain licences. A permit issued by the department will generally be needed to legally export kangaroo products. The export and import of wildlife and wildlife products is regulated under Part 13A of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) Following the Code of Practice for the Humane Harvesting which ensures humane welfare. Outcomes of kangaroos. (Exports, n.d.). Insurance Certificate Commercial invoice Packing list Freight insurance Freight documents Customer value declaration Certificate of origin Customs Import declaration (Special certificates, 2009).

Marketing Case Study

CASE 4? 6 Making Socially Responsible and Ethical Strategic decisions move a company toward its stated goals and perceived success. Strategic decisions also re? ect the ? rm’s social responsibility and the ethical values on which such decisions are made. They re? ect what is considered important and what a company wants to achieve. Mark Pastin, writing on the function of ethics in business decisions, observes: There are fundamental principles, or ground rules, by which organizations act. Like the ground rules of individuals, organizational ground rules determine which actions are possible for the organization and what the actions mean. Buried beneath the charts of organizational responsibility, the arcane strategies, the crunched numbers, and the political intrigue of every ? rm are sound rules by which the game unfolds. The following situations re? ect different decisions made by multinational ? rms and governments and also re? ect the social responsibility and ethical values underpinning the decisions. Study the following situations in the global cigarette marketplace carefully and assess the ground rules that guided the decisions of ? rms and governments. Marketing Decisions: Selling Tobacco to Third World Countries expanding market. As an example, Indonesia’s per capita cigarette consumption quadrupled in less than ten years. Increasingly, cigarette advertising on radio and television is being restricted in some countries, but other means of promotion, especially to young people, are not controlled. China, with more than 300 million smokers, produces and consumes about 1. 4 trillion cigarettes per year, more than any other country in the world. Estimates are that China has more smokers than the United States has people. Just 1 percent of that 1. 4 trillion cigarette market would increase a tobacco company’s overseas sales by 15 percent and would be worth as much as $300 million in added revenue. American cigarette companies have received a warm welcome in Russia, where at least 50 percent of the people smoke. Consumers are hungry for most things Western, and tobacco taxes are low. Unlike in the United States and other countries that limit or ban cigarette advertising, there are few effective controls on tobacco products in Russia. Russia, the world’s fourth largest cigarette market, has proved to be an extremely pro? table territory for British American Tobacco (BAT). BAT Russia, established in 1949, sold 65 billion cigarettes in Russia in 2005, giving it almost one? fth of market share. EXPORTING U. S. CIGARETTE CONSUMPTION In the United States, 600 billion cigarettes are sold annually, but sales are shrinking rapidly. Unit sales have been dropping about 1 to 2 percent a year, and sales have been down by almost 5 percent in the last six years. The U. S. Surgeon General’s campaign against smoking, higher cigarette taxes, non-smoking rules in public areas, and the concern Americans have about general health have led to the decline in tobacco consumption. Faced with various class-action lawsuits, the success of states in winning lawsuits, and pending federal legislation, tobacco companies have stepped up their international marketing activities to maintain pro? ts. Even though companies have agreed to sweeping restrictions in the United States on cigarette marketing and secondhand smoke and to bolder cancer-warning labels, they are ? hting as hard as ever in the Third World to convince the media, the public, and policymakers that similar changes are not needed. In seminars at luxury resorts worldwide, tobacco companies invite journalists, all expenses paid, to participate in programs that play down the health risks of smoking. It is hard to gauge the in? uence of such seminars, but in the Philippines, a government plan to reduce smoking by children was â€Å"neutralized† by a public relations campaign from cigarette companies to remove â€Å"cancer awareness and prevention† as a â€Å"key concern. A slant in favor of the tobacco industry’s point of view seemed to prevail. At a time when most industrialized countries are discouraging smoking, the tobacco industry is avidly courting consumers throughout the developing world using catchy slogans, obvious image campaigns, and single-cigarette sales that ? t a hard-pressed customer’s budget. The reason is clear: The Third World is an ADVERTISING AND PROMOTION In Gambia, smokers send in cigarette box tops to qualify for a chance to win a new car. In Argentina, smoking commercials ? ll 20 percent of television advertising time. And in crowded African cities, billboards that link smoking to the good life tower above the sweltering shantytowns. Such things as baby clothes with cigarette logos, health warnings printed in foreign languages, and tobaccosponsored contests for children are often featured in tobacco ads in Third World countries. Latin American tobacco consumption rose by more than 24 percent over a ten-year period. Critics claim that sophisticated promotions in unsophisticated societies entice people who cannot afford the necessities of life to spend money on a luxury—and a dangerous one at that. The sophistication theme runs throughout the smoking ads. In Kinshasa, Zaire, billboards depict a man in a business suit stepping out of a black Mercedes as a chauffeur holds the door. In Nigeria, promotions for Graduate brand cigarettes show a university student in his cap and gown. Those for Gold Leaf cigarettes have a barrister in a white wig and the slogan, â€Å"A very important cigarette for very important people. † In Kenya, a magazine ad for Embassy cigarettes shows an elegant executive of? cer with three young men and women equivalent to American yuppies. The most disturbing trend in developing countries is advertising that associates tobacco with American af? uence and culture. Some women in Africa, in their struggle for women’s rights, de? antly smoke cigarettes as a symbol of freedom. Billboards all over Russia feature pictures of skyscrapers and white sandy beaches and slogans like â€Å"Total Freedom† or â€Å"Rendezvous with America. † They aren’t advertising foreign travel but American cigarette brands. Cases 4 Developing Global Marketing Strategies Every cigarette manufacturer is in the image business, and tobacco companies say their promotional slant is both reasonable and common. They point out that in the Third World a lot of people cannot understand what is written in the ads anyway, so the ads zero in on the more understandable visual image. â€Å"In most of the world, the Marlboro Man isn’t just a symbol of the Wild West; he’s a symbol of the West. † â€Å"You can’t convince people that all Americans don’t smoke. † In Africa, some of the most effective advertising includes images of af? uent white Americans with recognizable landmarks, such as the New York City skyline, in the background. In much of Africa, children as young as ? e are used to sell single cigarettes, affordable to other children, to support their own nicotine habits. Worldwide nearly one-fourth of all teenage smokers smoked their ? rst cigarette before they were 10 years old. The scope of promotional activity is enormous. In Kenya, a major tobacco company is the fourth-largest advertiser. Tobaccosponsored lotteries bolster sales in some countries by offering as prizes expensive goods that are beyond most people’s budgets. Gambia has a population of just 640,000, but a tobacco company lottery attracted 1. million entries (each sent in on a cigarette box top) when it raf? ed off a Renault car. Evidence is strong that the strategy of tobacco companies is to target young people as a means of expanding market demand. Report after report reveals that adolescents receive cigarettes free as a means of promoting the product. For example, in Buenos Aires, a Jeep decorated with the yellow Camel logo pulls up in front of a high school. The driver, a blond woman wearing khaki safari gear, begins handing out free cigarettes to 15- and 16-year-olds on lunch recess. Teens visiting MTV’s Web sites in China, Germany, India, Poland, and Latin America were given the chance to click on a banner ad that led them to a questionnaire about their exposure to cigarette ads and other marketing tools in their countries. Some 10,000 teens responded to the banner ads. â€Å"In the past week, more than 62 percent of teenagers in these countries have been exposed to tobacco advertising in some form,† the 17-year-old SWAT (Students Working against Tobacco) chairman told Reuters. The tobacco companies learned that marketing to teens and kids worked in this country, but since they can’t do it here anymore, they’ve taken what they learned to other countries. † At a video arcade in Taipei, free American cigarettes are strewn atop each game. â€Å"As long as they’re here, I may as well try one,† says a high school girl. In Malaysia, Gila-Gila, a comic book popular with elementary school students, carries a Lucky Strike a d. Attractive women in cowboy out? ts regularly meet teenagers going to rock concerts or discos in Budapest and hand them Marlboros. Those who accept a light on the spot also receive Marlboro sunglasses. According to the American Lung Association Tobacco Policy Trend Alert, the tobacco industry is offering candy-? avored cigarettes in an attempt to continue to target teens. 1 Advertising and promotion of these products uses hip-hop imagery, attractive women, and other imagery to appeal to youth in similar ways that Joe Camel did a decade ago. Marketing efforts for candy-? avored cigarettes came after the Master Settlement Agreement prohibited tobacco companies from using cartoon characters to sell cigarettes. Researchers recently released the results of several surveys that showed that 20 percent of smokers ages 17 to 19 smoked ? avored cigarettes, while only 6 percent of smokers ages 17 to 20 did. In Russia, a U. S. cigarette company sponsors disco parties where thousands of young people dance to booming music. Admission is the purchase of one pack of cigarettes. At other cigarettesponsored parties, attractive women give cigarettes away free. In many countries, foreign cigarettes have a status image that also encourages smoking. A 26-year-old Chinese man says he switched from a domestic brand to Marlboro because â€Å"You feel a higher social position† when you smoke foreign cigarettes. â€Å"Smoking is a sign of luxury in the Czech Republica as well as in Russia and other Eastern countries,† says an executive of a Czech tobacco ? rm that has a joint venture with a U. S. company. â€Å"If I can smoke Marlboro, then I’m a well-to-do man. † The global tobacco companies insist that they are not attempting to recruit new smokers. They say they are only trying to encourage smokers to switch to foreign brands. The same number of cigarettes are consumed whether American cigarettes or not,† was the comment of one executive. Although cigarette companies deny they sell higher tar and nicotine cigarettes in the Third World, one British tobacco company does concede that some of its brands sold in developing countries contain more tar and nicotine than those sold in the United States and Europe. A recent study found three major U. S. brands with ? lters had 17 milligrams of tar in the United States, 22. 3 in Kenya, 29. 7 in Malaysia, and 31. 1 in South Africa. Another brand with ? ters had 19. 1 milligrams of tar in the United States, 28. 8 in South Africa, and 30. 9 in the Philippines. The ? rm says that Third World smokers are used to smoking their own locally made product, which might have several times more tar and nicotine. Thus, the ? rm leaves the tar- and nicotine-level decisions to its foreign subsidiaries, who tailor their products to local tastes. C. Everett Koop, the retired U. S. Surgeon General, was quoted in a recent news conference as saying, â€Å"Companies’ claims that science cannot say with certainty that tobacco causes cancer were ? t-footed lies† and that â€Å"sending cigarettes to the Third World was the export of death, disease, and disability. † An Oxford University epidemiologist has estimated that, because of increas ing tobacco consumption in Asia, the annual worldwide death toll from tobaccorelated illnesses will more than triple over the next two decades. Perhaps 100 million people died prematurely during the 20th century as a result of tobacco, making it the leading preventable cause of death and one of the top killers overall. According to the World Health Organization, ach year smoking causes 4 million deaths globally, and it expects the annual toll to rise to 10 million in 2030. GOVERNMENT INVOLVEMENT Third World governments often stand to pro? t from tobacco sales. Brazil collects 75 percent of the retail price of cigarettes in taxes, some $100 million a month. The Bulgarian state-owned tobacco company, Bulgartabac, contributes almost $30 million in taxes to the government annually. Bulgartabac is a major exporter of cigarettes to Russia, exporting 40,000 tons of cigarettes annually. Tobacco is Zimbabwe’s largest cash crop. One news report from a Zimbabwe newspaper reveals strong support for cigarette companies. â€Å"Western anti-tobacco lobbies demonstrate unbelievable hypocrisy,† notes one editorial. â€Å"It is relatively easy to sit in Washington or London and prattle on about the so-called evils of smoking, but they are far removed from the day-to-day grind of earning a living in the Third World. † It goes on to comment that it doesn’t dispute the fact that smoking is addictive or that it may cause diseases, but â€Å"smoking does not necessarily lead to certain 1 See â€Å"From Joe Camel to Kauai Kolada—The Marketing of Candy-Flavored Cigarettes,† http://lungusa. org. Part 6 Supplementary Material 350 million smokers, China has 50 million more cigarette buyers than the U. S. has people, according to Euromonitor. While smoking rates in developed countries have slowly declined, they have shot up dramatically in some developing counties where PMI is a major player. These include Pakistan (up 42 percent since 2001), Ukraine (up 36 percent), and Argentina (up 18 percent). death. Nor is it any more dangerous than other habits. Unfortunately, tobacco smoking has attracted the attention of a particularly â€Å"sanctimonious, meddling sector of society. They would do better to keep their opinions to themselves. † Generally, smoking is not a big concern of governments beset by debt, internal con? ict, drought, or famine. It is truly tragic, but the worse famine becomes, the more people smoke—just as with war, when people who are worried want to smoke. â€Å"In any case,† says one representative of an international tobacco company, â€Å"People in developing countries don’t have a long enough life expectancy to worry about smoking-related problems. You can’t turn to a guy who is going to die at age 40 and tell him that he might not live up to 2 years extra at age 70. † As for promoting cigarettes in the Third World, â€Å"If there is no ban on TV advertising, then you aren’t going to be an idiot and impose restrictions on yourself,† says the representative, â€Å"and likewise, if you get an order and you know that they’ve got money, no one is going to turn down the business. † Cigarette companies ? gure China’s self-interest will preserve its industry. Tobacco provides huge revenues for Beijing because all tobacco must be sold through the China National Tobacco Company monopoly. Duty on imported cigarettes is nearly 450 percent of their value. Consequently, tobacco is among the central government’s biggest source of funding, accounting for more than $30 billion in income in 2005. China is also a major exporter of tobacco. ANTISMOKING PROMOTIONS Since the early 1990s, multinational tobacco companies have promoted â€Å"youth smoking prevention† programs as part of their â€Å"Corporate Social Responsibility† campaigns. The companies have partnered with third-party allies in Latin America, most notably nonpro? t educational organizations and education and health ministries to promote youth smoking prevention. Even though there is no evidence that these programs reduce smoking among youths, they have met the industry’s goal of portraying the companies as concerned corporate citizens. In fact, a new study proves that youth smoking prevention ads created by the tobacco industry and aimed at parents actually increase the likelihood that teens will smoke. The study, â€Å"Impact of Televised Tobacco Industry Smoking Prevention Advertising on Youth Smoking-Related Beliefs, Intentions and Behavior,† published in the December 2006 issue of the American Journal of Public Health, sought to understand how the tobacco industry uses â€Å"youth smoking prevention† programs in Latin America. Tobacco industry documents, so-called social reports, media reports, and material provided by Latin American public health advocates were all analyzed. The study is the ? rst to examine the speci? c effect of tobacco company parent-focused advertising on youth. It found that ads that the industry claims are aimed at preventing youth from smoking actually provide no bene? t to youth. In fact, the ads that are created for parental audiences but also are seen by teens are associated with stronger intentions by teens to smoke in the future. Brazil has the world’s strictest governmental laws against smoking, consisting of highly visible antismoking campaigns, severe controls on advertising, and very high tax rates on smoking products. Despite these obstacles, the number of smokers in Brazil continues to grow. In 2006, there were approximately 44 million smokers in the country, up from 38 million in 1997. Factors driving this trend include the low price of cigarettes, which are among the lowest in the world; the easy access to tobacco products; and the actions taken by the powerful tobacco companies to slow down antismoking legislation in Brazil. FOCUS ON DEVELOPING MARKETS Lawsuits, stringent legislation against advertising, laws restricting where people can smoke, and other antismoking efforts on the part of governments have caused tobacco companies to intensify their efforts in those markets where restrictions are fewer and governments more friendly. As part of a strategy to increase its sales in the developing world, Philip Morris International (PMI) was spun off from Philip Morris USA in 2008 to escape the threat of litigation and government regulation in the United States. The move frees the tobacco giant’s international operations of the legal and public-relations headaches in the United States that have hindered its growth. Its practices are no longer constrained by American public opinion, paving the way for broad product experimentation. A new product, Marlboro Intense, is likely to be part of an aggressive blitz of new smoking products PMI will roll out around the globe. The Marlboro Intense cigarette has been shrunk down by about a half inch and offers smokers seven potent puffs apiece, versus the average of eight or so milder draws. The idea behind Intense is to appeal to customers who, due to indoor smoking bans, want to dash outside for a quick nicotine hit but don’t always ? nish a full-size cigarette. The CEO of PMI says there are â€Å"possibly 50 markets that are interested in deploying Marlboro Intense. † Other product innovations include sweet-smelling cigarettes that contain tobacco, cloves and ? voring—with twice the tar and nicotine levels of a conventional U. S. cigarette. Marlboro Mix 9, a high-nicotine, high-tar cigarette launched in Indonesia in 2007, and a clove-infused Mix 9 will be exported to other southeast Asian markets next. Another iteration of the Marlboro brand, the Marlboro Filter Plus, is being sold in South Korea, Russia, Kazakhstan, and Ukraine. It touts a special ? lter made of carbon, cellulose ac etate, and a tobacco plug that the company claims lowers the tar level while giving smokers a smoother taste. One of PMI’s immediate goals is to harness the huge potential of China’s smoking population, as well as some of that country’s own brands, which it has agreed to market worldwide. With some ASSESSING THE ETHICS OF STRATEGIC DECISIONS Ethical decision making is not a simplistic â€Å"right† or â€Å"wrong† determination. Ethical ground rules are complex, tough to sort out and to prioritize, tough to articulate, and tough to use. The complexity of ethical decisions is compounded in the international setting, which comprises different cultures, different perspectives of right and wrong, different legal requirements, and different goals. Clearly, when U. S. companies conduct business in an international setting, the ground rules become further complicated by the values, customs, traditions, ethics, and goals of the host countries, which each have developed their own ground rules for conducting business. Three prominent American ethicists have developed a framework to view the ethical implications of strategic decisions by American Cases 4 Developing Global Marketing Strategies ? rms. They identify three ethical principles that can guide American managers in assessing the ethical implications of their decisions and the degree to which these decisions re? ct these ethical principles or ground rules. They suggest asking, â€Å"Is the corporate strategy acceptable according to the following ethical ground rules? † These questions can help uncover the ethical ground rules embedded in the tobacco consumption situation described in this case. These questions lead to an ethical analysis of the degree to which this str ategy is bene? cial or harmful to the parties and, ultimately, whether it is a â€Å"right† or â€Å"wrong† strategy, or whether the consequences of this strategy are ethical or socially responsible for the parties involved. These ideas are incorporated in the decision tree in Exhibit 1. Principles Utilitarian ethics (Bentham, Smith) Question Does the corporate strategy optimize the â€Å"common good† or bene? ts of all constituencies? Does the corporate strategy respect the rights of the individuals involved? Does the corporate strategy respect the canons of justice or fairness to all parties? Rights of the parties (Kant, Locke) Justice or fairness (Aristotle, Rawls) Exhibit 1 A Decision Tree for Incorporating Ethical and Social Responsibility Issues into Multinational Business Decisions Does the decision efficiently optimize the common good or benefits of: THE BUSINESS FIRM? Stockholders Management Profits Growth Other SOCIETY? Culture Order Justice â€Å"The good life† Other THE ECONOMY? THE INDIVIDUAL? Economic growth Freedom Allocation of resources Health and welfare Production and distribution Self-realization of goods and services Human dignity Other Opportunity Other YES NO YES Are there critical factors that justify suboptimizing these goals and satisfactions? NO Does the decision respect the rights of individuals involved? YES NO Reject Decision YES Are there critical factors that justify the abrogation of a right? NO Does the corporate decision respect the canons of justice or fairness to all parties involved? YES YES NO Reject Decision Are there critical factors that justify the violation of a canon of justice? NO Accept Decision Reject Decision Part 6 Supplementary Material See www. who. int, the World Health Organization’s Web site, for more details regarding the current tobacco controversy. See also www. getswat. com for a worldwide student initiative against smoking. Laczniak and Naor discuss the complexity of international ethics or, more precisely, the ethical assumptions that underlie strategic decisions for multinationals. 2 They suggest that multinationals can develop consistency in their policies by using federal law as a baseline for appropriate behavior as well as respect for the host country’s general value structure. They conclude with four recommendations for multinationals: 1. Expand codes of ethics to be worldwide in scope. 2. Expressly consider ethical issues when developing worldwide corporate strategies. . If the ? rm encounters major ethical dilemmas, consider withdrawal from the problem market. 4. Develop periodic ethics-impact statements, including impacts on host parties. 2 QUESTIONS 1. Use the model in Exhibit 1 as a guide and assess the ethical and social responsibility implications of the situations described. 2. Can you recommend alternative strategies or solutions to the dilemmas confronting the tobacco companies? To governments? What is the price of ethical behavior? 3. Should the U. S. government support U. S. tobacco company interests abroad? . Should a company be forced to stop marketing a product that is not illegal, such as cigarettes? Gene R. Laczniak and Jacob Naor, â€Å"Global Ethics: Wrestling with the Corporate Conscience,† Business, July–September 1985. Sources: â€Å"Smoke Over the Horizon; U. S. Gains in Tobacco Control Are Being Offset Internationally,† The Washington Post, July 23, 2006; â€Å"Death and Taxes: England Has Become the Latest in a Series of Countries to Vote for Restrictions on Smoking in Public Places,† Financial Management (UK), April 1, 2006; â€Å"Trick or Treat? Tobacco Industry Prevention Ads Don’t Help Curb Youth Smoking,† PR Newswire, October 31, 2006; â€Å"China Exclusive: China, With One Third of World’s Smokers, Promises a ‘Non-Smoking’ Olympics,† Xinhua News Agency, May 29, 2006; â€Å"Tobacco Consumption and Motives for Use in Mexican University Students,† Adolescence, June 22, 2006; â€Å"A Change in the Air: Smoking Bans Gain Momentum Worldwide,† Environmental Health Perspectives, August 1, 2007; â€Å"Adams Won’t Kick the BAT Habit: The Head of British American Tobacco Is Stoical About the Looming Ban on Smoking in Public Spaces: BAT will Adapt,† The Sunday Telegraph London, June 10, 2007; â€Å"Heart Disease, Stroke Plague Third World,† Associated Press (Online), April 4, 2006; â€Å"Get a Detailed Picture of the Tobacco Industry in Brazil,† M2 Press Wire, December 20, 2007; Vanessa O’Connell, â€Å"Philip Morris Readies Global Tobacco Blit z; Division Spin-off Enables Aggressive Product Push; High-Tar Smokes in Asia,† The Wall Street Journal, January 29, 2008; â€Å"The Global Tobacco Threat,† The New York Times, February 19, 2008; â€Å"How to Save a Billion Lives; Smoking,† The Economist (London,) February 9, 2008; â€Å"Whether Here or There, Cigarettes Still Kill People,† The Wall Street Journal, February 4, 2008. Marketing Case Study 1. When 7-UP introduced itself into the soft drink industry, they were generally thought of by consumers as a company that produced a clear soft drink for mixing alcoholic beverages.   After conducting extensive research, 7-UP found that colas were the best-selling category in the soft drink industry.   7-UP then repositioned itself in the market by introducing the slogan, â€Å"7-UP, the uncola.†Ã‚   This repositioning allowed them to take third place in the market, after Coca Cola and Pepsi, and also allowed for growth and gains over competitors in the lemon-lime category of soft drinks.   In addition, 7-UP differentiates itself from other soft drink manufacturers in several ways.   Within the lemon-lime category, 7-UP has introduced a new tagline, â€Å"all things in green bottles are not the same.†Ã‚   This tagline is meant to differentiate 7-UP from Sprite and Sierra Mist.   Two other new taglines will include â€Å"for less sweet, syrupy taste, the only way to go is Up† and â€Å"When you add it all up, the only way to go is Up† (Wikipedia).2. 7-UP was able to change consumer behavior by using psychology and working with the concept that everyone wants to be an individual.   When introducing the â€Å"uncola† tagline, 7-UP based this introduction on consumer research.   Purchasing and consuming Coke and Pepsi were part of going along with the group since many people were purchasing those products at the time.   Introducing 7-UP as the â€Å"uncola† brought to mind a sense of individuality for consumers.   The 7-UP marketing executives put the idea in their heads that purchasing and consuming 7-UP products would make them stand out from the crowd.   7-UP has continued this tradition of changing consumer behavior since that time.The company hopes to change consumer behavior in the twenty-first century by introducing a product called 7-UP Plus.   This product will create a whole new category wit hin the soft drink industry, as it is going to be sold as a soft drink with added nutritional value.   Again, 7-UP is basing the introduction of this product on consumer trends and research.   Due to the obesity epidemic in America, combined with raised health awareness on the part of many men and women, 7-UP will be introducing this reduced sugar product with added vitamins and minerals.   Introducing this product shows that 7-UP is on top of trends in consumer spending and, by introducing this product, the executives may be able to change consumer behavior from purchasing sugar-laden soft drinks with empty calories to purchasing a less sweetened product with vitamins and minerals that are needed to fuel the human body (Dillon).3.   Like any company, 7-UP has had many successes and failures throughout its history.   In the initial stages of the company, there were 600 lemon-lime beverages competing for market share with 7-UP.   7-UP was able to survive and rise to the t op of the market by successfully becoming one of the first lemon-lime soft drinks to be nationally distributed. 7-UP also floundered in the soft drink market due to poor marketing.   Originally, the soft drink was a means of calming children with upset stomachs.   Later, it became a mixer for alcoholic beverages.   Because 7-UP was thought of as a bartending mixer and not an individual beverage, sales were mostly due to people intending to mix the 7-UP with a type of alcoholic beverage.7-UP conducted extensive research and found that cola drinks were the best-selling soft drink in the industry.   However, these cola drinks contained a considerable amount of caffeine.   After careful consideration, they introduced the slogan, â€Å"7-UP, the uncola.†Ã‚   This slogan appealed to consumers because it carried a sense of individualism and it also appealed to those who were health-conscious and knew the effects of too much caffeine.   This was one of 7-UPs great success es.   Another failure by 7-UP was the introduction of 7-UP Gold.   7-UP Gold was designed as a spiced version of 7-UP, similar in taste to the ginger ale soft drink.   Although it was widely marketed and advertised, the product was never a hit and was discontinued.Another successful marketing campaign capitalized on the principles of Zen.   A television commercial featured a Zen master asking disciples to correctly choose.   The 7-UP symbolized light and consciousness while the cola featured in the commercial symbolized darkness.   With that commercial, 7-UP made consumers think they were making a good life choice by purchasing and consuming 7-UP.   Another failure in 7-UPs history is its poor bottling and distribution structure.   When 7-UP was first introduced, it had little competition because Coca Cola and Pepsi did not manufacture lemon-lime soft drinks.   This changed when Coca Cola introduced Sprite and Pepsi introduced Sierra Mist.   Bottlers were then fo rced by these respective companies to discontinue bottling 7-UP and exclusively bottle their products.   Unfortunately, this had led to an inability for 7-UP to be widely distributed to smaller stores.   As a result, 7-UP can often only be found in large stores or chains (Wikipedia).4.   7-UP's marketing strategy has been successful in many ways.   With the introduction of new taglines and slogans, 7-UP has been successful at positioning themselves in consumers' minds and increasing market share in the soft drink industry.   7-UP's marketing strategy has also been successful because marketing executives have capitalized on consumer trends throughout the history of the company.In the 1970s, the company seized upon the fact that the popular cola drinks had high levels of caffeine and redesigned their advertising to reflect the healthier choice that 7-UP was.   In addition, they appealed to the consumer's sense of wanting to be an individual and introduced advertisements ge ared toward that concept.   With the invention of new technology, 7-UP has also gained a presence on the World Wide Web with a well-designed web site that gives important information about the company and its products (Wikipedia). Marketing Case Study CASE 4? 6 Making Socially Responsible and Ethical Strategic decisions move a company toward its stated goals and perceived success. Strategic decisions also re? ect the ? rm’s social responsibility and the ethical values on which such decisions are made. They re? ect what is considered important and what a company wants to achieve. Mark Pastin, writing on the function of ethics in business decisions, observes: There are fundamental principles, or ground rules, by which organizations act. Like the ground rules of individuals, organizational ground rules determine which actions are possible for the organization and what the actions mean. Buried beneath the charts of organizational responsibility, the arcane strategies, the crunched numbers, and the political intrigue of every ? rm are sound rules by which the game unfolds. The following situations re? ect different decisions made by multinational ? rms and governments and also re? ect the social responsibility and ethical values underpinning the decisions. Study the following situations in the global cigarette marketplace carefully and assess the ground rules that guided the decisions of ? rms and governments. Marketing Decisions: Selling Tobacco to Third World Countries expanding market. As an example, Indonesia’s per capita cigarette consumption quadrupled in less than ten years. Increasingly, cigarette advertising on radio and television is being restricted in some countries, but other means of promotion, especially to young people, are not controlled. China, with more than 300 million smokers, produces and consumes about 1. 4 trillion cigarettes per year, more than any other country in the world. Estimates are that China has more smokers than the United States has people. Just 1 percent of that 1. 4 trillion cigarette market would increase a tobacco company’s overseas sales by 15 percent and would be worth as much as $300 million in added revenue. American cigarette companies have received a warm welcome in Russia, where at least 50 percent of the people smoke. Consumers are hungry for most things Western, and tobacco taxes are low. Unlike in the United States and other countries that limit or ban cigarette advertising, there are few effective controls on tobacco products in Russia. Russia, the world’s fourth largest cigarette market, has proved to be an extremely pro? table territory for British American Tobacco (BAT). BAT Russia, established in 1949, sold 65 billion cigarettes in Russia in 2005, giving it almost one? fth of market share. EXPORTING U. S. CIGARETTE CONSUMPTION In the United States, 600 billion cigarettes are sold annually, but sales are shrinking rapidly. Unit sales have been dropping about 1 to 2 percent a year, and sales have been down by almost 5 percent in the last six years. The U. S. Surgeon General’s campaign against smoking, higher cigarette taxes, non-smoking rules in public areas, and the concern Americans have about general health have led to the decline in tobacco consumption. Faced with various class-action lawsuits, the success of states in winning lawsuits, and pending federal legislation, tobacco companies have stepped up their international marketing activities to maintain pro? ts. Even though companies have agreed to sweeping restrictions in the United States on cigarette marketing and secondhand smoke and to bolder cancer-warning labels, they are ? hting as hard as ever in the Third World to convince the media, the public, and policymakers that similar changes are not needed. In seminars at luxury resorts worldwide, tobacco companies invite journalists, all expenses paid, to participate in programs that play down the health risks of smoking. It is hard to gauge the in? uence of such seminars, but in the Philippines, a government plan to reduce smoking by children was â€Å"neutralized† by a public relations campaign from cigarette companies to remove â€Å"cancer awareness and prevention† as a â€Å"key concern. A slant in favor of the tobacco industry’s point of view seemed to prevail. At a time when most industrialized countries are discouraging smoking, the tobacco industry is avidly courting consumers throughout the developing world using catchy slogans, obvious image campaigns, and single-cigarette sales that ? t a hard-pressed customer’s budget. The reason is clear: The Third World is an ADVERTISING AND PROMOTION In Gambia, smokers send in cigarette box tops to qualify for a chance to win a new car. In Argentina, smoking commercials ? ll 20 percent of television advertising time. And in crowded African cities, billboards that link smoking to the good life tower above the sweltering shantytowns. Such things as baby clothes with cigarette logos, health warnings printed in foreign languages, and tobaccosponsored contests for children are often featured in tobacco ads in Third World countries. Latin American tobacco consumption rose by more than 24 percent over a ten-year period. Critics claim that sophisticated promotions in unsophisticated societies entice people who cannot afford the necessities of life to spend money on a luxury—and a dangerous one at that. The sophistication theme runs throughout the smoking ads. In Kinshasa, Zaire, billboards depict a man in a business suit stepping out of a black Mercedes as a chauffeur holds the door. In Nigeria, promotions for Graduate brand cigarettes show a university student in his cap and gown. Those for Gold Leaf cigarettes have a barrister in a white wig and the slogan, â€Å"A very important cigarette for very important people. † In Kenya, a magazine ad for Embassy cigarettes shows an elegant executive of? cer with three young men and women equivalent to American yuppies. The most disturbing trend in developing countries is advertising that associates tobacco with American af? uence and culture. Some women in Africa, in their struggle for women’s rights, de? antly smoke cigarettes as a symbol of freedom. Billboards all over Russia feature pictures of skyscrapers and white sandy beaches and slogans like â€Å"Total Freedom† or â€Å"Rendezvous with America. † They aren’t advertising foreign travel but American cigarette brands. Cases 4 Developing Global Marketing Strategies Every cigarette manufacturer is in the image business, and tobacco companies say their promotional slant is both reasonable and common. They point out that in the Third World a lot of people cannot understand what is written in the ads anyway, so the ads zero in on the more understandable visual image. â€Å"In most of the world, the Marlboro Man isn’t just a symbol of the Wild West; he’s a symbol of the West. † â€Å"You can’t convince people that all Americans don’t smoke. † In Africa, some of the most effective advertising includes images of af? uent white Americans with recognizable landmarks, such as the New York City skyline, in the background. In much of Africa, children as young as ? e are used to sell single cigarettes, affordable to other children, to support their own nicotine habits. Worldwide nearly one-fourth of all teenage smokers smoked their ? rst cigarette before they were 10 years old. The scope of promotional activity is enormous. In Kenya, a major tobacco company is the fourth-largest advertiser. Tobaccosponsored lotteries bolster sales in some countries by offering as prizes expensive goods that are beyond most people’s budgets. Gambia has a population of just 640,000, but a tobacco company lottery attracted 1. million entries (each sent in on a cigarette box top) when it raf? ed off a Renault car. Evidence is strong that the strategy of tobacco companies is to target young people as a means of expanding market demand. Report after report reveals that adolescents receive cigarettes free as a means of promoting the product. For example, in Buenos Aires, a Jeep decorated with the yellow Camel logo pulls up in front of a high school. The driver, a blond woman wearing khaki safari gear, begins handing out free cigarettes to 15- and 16-year-olds on lunch recess. Teens visiting MTV’s Web sites in China, Germany, India, Poland, and Latin America were given the chance to click on a banner ad that led them to a questionnaire about their exposure to cigarette ads and other marketing tools in their countries. Some 10,000 teens responded to the banner ads. â€Å"In the past week, more than 62 percent of teenagers in these countries have been exposed to tobacco advertising in some form,† the 17-year-old SWAT (Students Working against Tobacco) chairman told Reuters. The tobacco companies learned that marketing to teens and kids worked in this country, but since they can’t do it here anymore, they’ve taken what they learned to other countries. † At a video arcade in Taipei, free American cigarettes are strewn atop each game. â€Å"As long as they’re here, I may as well try one,† says a high school girl. In Malaysia, Gila-Gila, a comic book popular with elementary school students, carries a Lucky Strike a d. Attractive women in cowboy out? ts regularly meet teenagers going to rock concerts or discos in Budapest and hand them Marlboros. Those who accept a light on the spot also receive Marlboro sunglasses. According to the American Lung Association Tobacco Policy Trend Alert, the tobacco industry is offering candy-? avored cigarettes in an attempt to continue to target teens. 1 Advertising and promotion of these products uses hip-hop imagery, attractive women, and other imagery to appeal to youth in similar ways that Joe Camel did a decade ago. Marketing efforts for candy-? avored cigarettes came after the Master Settlement Agreement prohibited tobacco companies from using cartoon characters to sell cigarettes. Researchers recently released the results of several surveys that showed that 20 percent of smokers ages 17 to 19 smoked ? avored cigarettes, while only 6 percent of smokers ages 17 to 20 did. In Russia, a U. S. cigarette company sponsors disco parties where thousands of young people dance to booming music. Admission is the purchase of one pack of cigarettes. At other cigarettesponsored parties, attractive women give cigarettes away free. In many countries, foreign cigarettes have a status image that also encourages smoking. A 26-year-old Chinese man says he switched from a domestic brand to Marlboro because â€Å"You feel a higher social position† when you smoke foreign cigarettes. â€Å"Smoking is a sign of luxury in the Czech Republica as well as in Russia and other Eastern countries,† says an executive of a Czech tobacco ? rm that has a joint venture with a U. S. company. â€Å"If I can smoke Marlboro, then I’m a well-to-do man. † The global tobacco companies insist that they are not attempting to recruit new smokers. They say they are only trying to encourage smokers to switch to foreign brands. The same number of cigarettes are consumed whether American cigarettes or not,† was the comment of one executive. Although cigarette companies deny they sell higher tar and nicotine cigarettes in the Third World, one British tobacco company does concede that some of its brands sold in developing countries contain more tar and nicotine than those sold in the United States and Europe. A recent study found three major U. S. brands with ? lters had 17 milligrams of tar in the United States, 22. 3 in Kenya, 29. 7 in Malaysia, and 31. 1 in South Africa. Another brand with ? ters had 19. 1 milligrams of tar in the United States, 28. 8 in South Africa, and 30. 9 in the Philippines. The ? rm says that Third World smokers are used to smoking their own locally made product, which might have several times more tar and nicotine. Thus, the ? rm leaves the tar- and nicotine-level decisions to its foreign subsidiaries, who tailor their products to local tastes. C. Everett Koop, the retired U. S. Surgeon General, was quoted in a recent news conference as saying, â€Å"Companies’ claims that science cannot say with certainty that tobacco causes cancer were ? t-footed lies† and that â€Å"sending cigarettes to the Third World was the export of death, disease, and disability. † An Oxford University epidemiologist has estimated that, because of increas ing tobacco consumption in Asia, the annual worldwide death toll from tobaccorelated illnesses will more than triple over the next two decades. Perhaps 100 million people died prematurely during the 20th century as a result of tobacco, making it the leading preventable cause of death and one of the top killers overall. According to the World Health Organization, ach year smoking causes 4 million deaths globally, and it expects the annual toll to rise to 10 million in 2030. GOVERNMENT INVOLVEMENT Third World governments often stand to pro? t from tobacco sales. Brazil collects 75 percent of the retail price of cigarettes in taxes, some $100 million a month. The Bulgarian state-owned tobacco company, Bulgartabac, contributes almost $30 million in taxes to the government annually. Bulgartabac is a major exporter of cigarettes to Russia, exporting 40,000 tons of cigarettes annually. Tobacco is Zimbabwe’s largest cash crop. One news report from a Zimbabwe newspaper reveals strong support for cigarette companies. â€Å"Western anti-tobacco lobbies demonstrate unbelievable hypocrisy,† notes one editorial. â€Å"It is relatively easy to sit in Washington or London and prattle on about the so-called evils of smoking, but they are far removed from the day-to-day grind of earning a living in the Third World. † It goes on to comment that it doesn’t dispute the fact that smoking is addictive or that it may cause diseases, but â€Å"smoking does not necessarily lead to certain 1 See â€Å"From Joe Camel to Kauai Kolada—The Marketing of Candy-Flavored Cigarettes,† http://lungusa. org. Part 6 Supplementary Material 350 million smokers, China has 50 million more cigarette buyers than the U. S. has people, according to Euromonitor. While smoking rates in developed countries have slowly declined, they have shot up dramatically in some developing counties where PMI is a major player. These include Pakistan (up 42 percent since 2001), Ukraine (up 36 percent), and Argentina (up 18 percent). death. Nor is it any more dangerous than other habits. Unfortunately, tobacco smoking has attracted the attention of a particularly â€Å"sanctimonious, meddling sector of society. They would do better to keep their opinions to themselves. † Generally, smoking is not a big concern of governments beset by debt, internal con? ict, drought, or famine. It is truly tragic, but the worse famine becomes, the more people smoke—just as with war, when people who are worried want to smoke. â€Å"In any case,† says one representative of an international tobacco company, â€Å"People in developing countries don’t have a long enough life expectancy to worry about smoking-related problems. You can’t turn to a guy who is going to die at age 40 and tell him that he might not live up to 2 years extra at age 70. † As for promoting cigarettes in the Third World, â€Å"If there is no ban on TV advertising, then you aren’t going to be an idiot and impose restrictions on yourself,† says the representative, â€Å"and likewise, if you get an order and you know that they’ve got money, no one is going to turn down the business. † Cigarette companies ? gure China’s self-interest will preserve its industry. Tobacco provides huge revenues for Beijing because all tobacco must be sold through the China National Tobacco Company monopoly. Duty on imported cigarettes is nearly 450 percent of their value. Consequently, tobacco is among the central government’s biggest source of funding, accounting for more than $30 billion in income in 2005. China is also a major exporter of tobacco. ANTISMOKING PROMOTIONS Since the early 1990s, multinational tobacco companies have promoted â€Å"youth smoking prevention† programs as part of their â€Å"Corporate Social Responsibility† campaigns. The companies have partnered with third-party allies in Latin America, most notably nonpro? t educational organizations and education and health ministries to promote youth smoking prevention. Even though there is no evidence that these programs reduce smoking among youths, they have met the industry’s goal of portraying the companies as concerned corporate citizens. In fact, a new study proves that youth smoking prevention ads created by the tobacco industry and aimed at parents actually increase the likelihood that teens will smoke. The study, â€Å"Impact of Televised Tobacco Industry Smoking Prevention Advertising on Youth Smoking-Related Beliefs, Intentions and Behavior,† published in the December 2006 issue of the American Journal of Public Health, sought to understand how the tobacco industry uses â€Å"youth smoking prevention† programs in Latin America. Tobacco industry documents, so-called social reports, media reports, and material provided by Latin American public health advocates were all analyzed. The study is the ? rst to examine the speci? c effect of tobacco company parent-focused advertising on youth. It found that ads that the industry claims are aimed at preventing youth from smoking actually provide no bene? t to youth. In fact, the ads that are created for parental audiences but also are seen by teens are associated with stronger intentions by teens to smoke in the future. Brazil has the world’s strictest governmental laws against smoking, consisting of highly visible antismoking campaigns, severe controls on advertising, and very high tax rates on smoking products. Despite these obstacles, the number of smokers in Brazil continues to grow. In 2006, there were approximately 44 million smokers in the country, up from 38 million in 1997. Factors driving this trend include the low price of cigarettes, which are among the lowest in the world; the easy access to tobacco products; and the actions taken by the powerful tobacco companies to slow down antismoking legislation in Brazil. FOCUS ON DEVELOPING MARKETS Lawsuits, stringent legislation against advertising, laws restricting where people can smoke, and other antismoking efforts on the part of governments have caused tobacco companies to intensify their efforts in those markets where restrictions are fewer and governments more friendly. As part of a strategy to increase its sales in the developing world, Philip Morris International (PMI) was spun off from Philip Morris USA in 2008 to escape the threat of litigation and government regulation in the United States. The move frees the tobacco giant’s international operations of the legal and public-relations headaches in the United States that have hindered its growth. Its practices are no longer constrained by American public opinion, paving the way for broad product experimentation. A new product, Marlboro Intense, is likely to be part of an aggressive blitz of new smoking products PMI will roll out around the globe. The Marlboro Intense cigarette has been shrunk down by about a half inch and offers smokers seven potent puffs apiece, versus the average of eight or so milder draws. The idea behind Intense is to appeal to customers who, due to indoor smoking bans, want to dash outside for a quick nicotine hit but don’t always ? nish a full-size cigarette. The CEO of PMI says there are â€Å"possibly 50 markets that are interested in deploying Marlboro Intense. † Other product innovations include sweet-smelling cigarettes that contain tobacco, cloves and ? voring—with twice the tar and nicotine levels of a conventional U. S. cigarette. Marlboro Mix 9, a high-nicotine, high-tar cigarette launched in Indonesia in 2007, and a clove-infused Mix 9 will be exported to other southeast Asian markets next. Another iteration of the Marlboro brand, the Marlboro Filter Plus, is being sold in South Korea, Russia, Kazakhstan, and Ukraine. It touts a special ? lter made of carbon, cellulose ac etate, and a tobacco plug that the company claims lowers the tar level while giving smokers a smoother taste. One of PMI’s immediate goals is to harness the huge potential of China’s smoking population, as well as some of that country’s own brands, which it has agreed to market worldwide. With some ASSESSING THE ETHICS OF STRATEGIC DECISIONS Ethical decision making is not a simplistic â€Å"right† or â€Å"wrong† determination. Ethical ground rules are complex, tough to sort out and to prioritize, tough to articulate, and tough to use. The complexity of ethical decisions is compounded in the international setting, which comprises different cultures, different perspectives of right and wrong, different legal requirements, and different goals. Clearly, when U. S. companies conduct business in an international setting, the ground rules become further complicated by the values, customs, traditions, ethics, and goals of the host countries, which each have developed their own ground rules for conducting business. Three prominent American ethicists have developed a framework to view the ethical implications of strategic decisions by American Cases 4 Developing Global Marketing Strategies ? rms. They identify three ethical principles that can guide American managers in assessing the ethical implications of their decisions and the degree to which these decisions re? ct these ethical principles or ground rules. They suggest asking, â€Å"Is the corporate strategy acceptable according to the following ethical ground rules? † These questions can help uncover the ethical ground rules embedded in the tobacco consumption situation described in this case. These questions lead to an ethical analysis of the degree to which this str ategy is bene? cial or harmful to the parties and, ultimately, whether it is a â€Å"right† or â€Å"wrong† strategy, or whether the consequences of this strategy are ethical or socially responsible for the parties involved. These ideas are incorporated in the decision tree in Exhibit 1. Principles Utilitarian ethics (Bentham, Smith) Question Does the corporate strategy optimize the â€Å"common good† or bene? ts of all constituencies? Does the corporate strategy respect the rights of the individuals involved? Does the corporate strategy respect the canons of justice or fairness to all parties? Rights of the parties (Kant, Locke) Justice or fairness (Aristotle, Rawls) Exhibit 1 A Decision Tree for Incorporating Ethical and Social Responsibility Issues into Multinational Business Decisions Does the decision efficiently optimize the common good or benefits of: THE BUSINESS FIRM? Stockholders Management Profits Growth Other SOCIETY? Culture Order Justice â€Å"The good life† Other THE ECONOMY? THE INDIVIDUAL? Economic growth Freedom Allocation of resources Health and welfare Production and distribution Self-realization of goods and services Human dignity Other Opportunity Other YES NO YES Are there critical factors that justify suboptimizing these goals and satisfactions? NO Does the decision respect the rights of individuals involved? YES NO Reject Decision YES Are there critical factors that justify the abrogation of a right? NO Does the corporate decision respect the canons of justice or fairness to all parties involved? YES YES NO Reject Decision Are there critical factors that justify the violation of a canon of justice? NO Accept Decision Reject Decision Part 6 Supplementary Material See www. who. int, the World Health Organization’s Web site, for more details regarding the current tobacco controversy. See also www. getswat. com for a worldwide student initiative against smoking. Laczniak and Naor discuss the complexity of international ethics or, more precisely, the ethical assumptions that underlie strategic decisions for multinationals. 2 They suggest that multinationals can develop consistency in their policies by using federal law as a baseline for appropriate behavior as well as respect for the host country’s general value structure. They conclude with four recommendations for multinationals: 1. Expand codes of ethics to be worldwide in scope. 2. Expressly consider ethical issues when developing worldwide corporate strategies. . If the ? rm encounters major ethical dilemmas, consider withdrawal from the problem market. 4. Develop periodic ethics-impact statements, including impacts on host parties. 2 QUESTIONS 1. Use the model in Exhibit 1 as a guide and assess the ethical and social responsibility implications of the situations described. 2. Can you recommend alternative strategies or solutions to the dilemmas confronting the tobacco companies? To governments? What is the price of ethical behavior? 3. Should the U. S. government support U. S. tobacco company interests abroad? . Should a company be forced to stop marketing a product that is not illegal, such as cigarettes? Gene R. Laczniak and Jacob Naor, â€Å"Global Ethics: Wrestling with the Corporate Conscience,† Business, July–September 1985. Sources: â€Å"Smoke Over the Horizon; U. S. Gains in Tobacco Control Are Being Offset Internationally,† The Washington Post, July 23, 2006; â€Å"Death and Taxes: England Has Become the Latest in a Series of Countries to Vote for Restrictions on Smoking in Public Places,† Financial Management (UK), April 1, 2006; â€Å"Trick or Treat? Tobacco Industry Prevention Ads Don’t Help Curb Youth Smoking,† PR Newswire, October 31, 2006; â€Å"China Exclusive: China, With One Third of World’s Smokers, Promises a ‘Non-Smoking’ Olympics,† Xinhua News Agency, May 29, 2006; â€Å"Tobacco Consumption and Motives for Use in Mexican University Students,† Adolescence, June 22, 2006; â€Å"A Change in the Air: Smoking Bans Gain Momentum Worldwide,† Environmental Health Perspectives, August 1, 2007; â€Å"Adams Won’t Kick the BAT Habit: The Head of British American Tobacco Is Stoical About the Looming Ban on Smoking in Public Spaces: BAT will Adapt,† The Sunday Telegraph London, June 10, 2007; â€Å"Heart Disease, Stroke Plague Third World,† Associated Press (Online), April 4, 2006; â€Å"Get a Detailed Picture of the Tobacco Industry in Brazil,† M2 Press Wire, December 20, 2007; Vanessa O’Connell, â€Å"Philip Morris Readies Global Tobacco Blit z; Division Spin-off Enables Aggressive Product Push; High-Tar Smokes in Asia,† The Wall Street Journal, January 29, 2008; â€Å"The Global Tobacco Threat,† The New York Times, February 19, 2008; â€Å"How to Save a Billion Lives; Smoking,† The Economist (London,) February 9, 2008; â€Å"Whether Here or There, Cigarettes Still Kill People,† The Wall Street Journal, February 4, 2008.