1 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall Dr. Dawne Martin MKTG 550 – Business Marketing September 13, 2012

 For Next Time: Meet in Calvin 102– John Deere  Exam: Tuesday, September 25  Learning Objectives › Understand the primary goals & objectives of business regulation and implications in a market economy › Understand the basic US antitrust and business regulatory legislative acts Apply to a business and marketing situation 2 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Legislation provides a level playing field for all companies  Well-developed, effective marketing plans avoid most legal issues  Business Legislation › Protect companies from each other › Protect consumers › Protect the interests of society 3

 Who is responsible for enforcing business regulations?  How do politics affect enforcement of regulations? 4 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

1890 Sherman Antitrust Act 1914 Clayton Act Federal Trade Commission Act 1936Robinson-Patman Act 1950Celler-Kefauver Act 1975Consumer Goods Pricing Act 5 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Designed to protect the investing public, rather than business competitors and customers  From a marketer’s perspective, an important provision is the silent period relating to Initial Public Offerings (IPOs) 6 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Standard set of laws that govern contracts and associated case law  Most portions of the UCC adopted by 49 of 50 states (excluding Louisiana)  Consistency in the UCC between states helps with the administration and enforcement of contracts across state lines 7 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Public Company Accounting Reform and Investor Protection Act of 2002  Commonly called “SOX”  Est. Public Company Accounting Oversight Board  SOX inspired: o “Canadian Sarbanes-Oxley Act,” Bill 198 (C- SOX) o Australian Corporate Law Economic Reform Program, (CLERP) o Japanese Financial Instruments and Exchange Law, (J-SOX) 8 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

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Exhibit 4-5: United Memories aggressive price at NBM Computers Pacific Model units/month $38 per unit Desktop Computer Market Pacific Model units/month $38 per unit NBM Computers Palo Alto Computer PACIFIC DRIVES UniMem Model units/month $32 per unit UNITED MEMORIES 10 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

Exhibit 4-6: Spartan Computers Enters the Market UNITED MEMORIES UniMem units/mo. $32 per unit Pacific Model units/mo. $55 per unit Desktop Computer Market Pacific units/mo. $38/unit NBM Computers Palo Alto Computer PACIFIC DRIVES Spartan Computers Pacific units/mo. $38/unit 11 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Offerings sold: o for different uses o to separate markets o at different times o that are not identical o to government agencies o at prices that meet a competitive threat are generally not a violation of price regulations.  Offerings created through supplier-customer collaboration, partnering, and customizations are not identical and therefore are not subject to price regulations 12 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 This test has three considerations: o SIZE: of organization involved o VOLUME: of business involved o SIGNIFICANCE: of market preemption 13 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

1. Patents 2. Copyrights 3. Trade Secrets 4. License 5. Cross-License 6. Joint Venture 14 Copyright © 2011 Pearson Education, Inc., publishing as Prentice Hall

 Ethics deal with personal moral principles and values  Laws are society’s values and standards that are enforceable in courts  There are numerous situations where judgment plays a large role in defining ethical and legal boundaries  Actions that are technically legal could be viewed as unethical  Actions are considered to be ethical may not be seen as legal

 58 of US adults rate ethical standards of business executives as “fair” or “poor”  90% think white-collar crime is “very common” or “somewhat common”  76% say the lack of ethics in business contributes to tumbling societal moral standards  41% of 1,694 corporate employees in a recent survey were aware of ethical problems in their company

 Marketing Ethics: Moral judgments, standards and rules of conduct relating to marketing decisions.  Factors influencing ethical decision-making: › Individual factors - attitudes and values. › Opportunity presenting itself - likelihood of punishment, no professional codes of ethics, no corporate policies to discourage unethical decision making. › Values, attitudes, and behaviors of others - peers, supervisors, top management.

Invisible hand: True and only social responsibilities of business organizations are to make profits and obey laws. Morality, responsibility, and conscience reside in invisible hand of free- market system, not with managers or organizations.Invisible hand: True and only social responsibilities of business organizations are to make profits and obey laws. Morality, responsibility, and conscience reside in invisible hand of free- market system, not with managers or organizations. Hand of government: Hand of government: Corporation has no moral responsibility beyond legal obedience. Regulatory hand of law and political process turn these objectives into common good. Hand of management: Hand of management: Encourages corporations to exercise independent, non-economic judgment over matters of morals and ethics that face them.

 Utilitarian Approach – produces the greatest good and least harm for all affected  Rights Approach – protects and respects moral rights of those affected  Fairness or Justice Approach – all equals should be treated equally, or on a standard that is defensible.

 Common Good Approach -- Respect and compassion for all others – specifically the vulnerable  Virtue Approach – Actions consistent with our virtues – Is this consistent with my acting my best.