Question: A limited campaign.
Divide into two groups and prepare arguments for and against the following behavior: You work in the marketing department of a large dairy products company. The company has launched a "revolutionary" yogurt product with ingredients that promote healthy digestion. As a promotion to launch the new product, the company is offering to donate 10 cents to the American Heart Association (AHA) for every foil top from the yogurt pots that is returned to the manufacturer.
To support this campaign, the company has invested millions of dollars in a broad "media spend" on television, radio, Web, and print outlets, as well as the product packaging itself. In very small print on the packaging and advertising is a clarification sentence that specifies that the maximum donation for the campaign will be $10,000. Your marketing analyst colleagues have forecast that first-year sales of this new product will reach 10 million units, with an anticipated participation of 2 million units in the pot-top return campaign (a potential donation of $200,000 without the $10,000 limit). Focus groups that were tested about the new product indicated clearly that participants in the pot-top return campaign attach positive feelings about their purchase to the added bonus of the donation to the AHA.
Thinking Critically
WALMART
By most accounts Walmart is among the most successful companies in the world. Its revenues for 2007 were $379 billion, more than fi ve times larger than the next largest retailer, Target. For comparison, in the same year Saudi Arabia was ranked by the World Bank as the 24th largest economy in the world with an estimated gross domestic product (GDP) of $381 billion and Switzerland was ranked 22nd with a GDP of $415 billion. Walmart operates almost 7,300 stores, and over 4,000 of them are in the United States. It is estimated that 200 million people shop at Walmart each week. Worldwide, Walmart employs 2 million people. It is the largest private employer in the United States and the single largest employer in 25 separate U.S. states. Walmart was founded in the early 1960s by Sam Walton in Rogers, Arkansas. Walton's original marketing strategy was to emphasize low prices, and this strategy continues today as reflected in its marketing campaign of "everyday low prices."
Walmart is able to achieve low retail prices by leveraging its buying power as the world's largest retailer and by controlling labor costs. Walmart sells more socks, toothpaste, dog food, sporting goods, guns, diamonds, and groceries than any other business in the world. Alone, it accounts for the sale of 30 percent of all household goods (laundry detergent, soap, paper towels) and 15 percent of all CDs, as well as 28 percent of Dial soap's total sales, 24 percent of Del Monte Foods', 23 percent of Clorox's, and 23 percent of Revlon's. Walmart is the single largest importer from China, accounting for almost 10 percent of all Chinese imports to the United States, worth an estimated $12 billion in 2002. At first glance, Walmart's success promotes a number of values. Stockholders have received significant financial benefits from Walmart. Consumers also receive financial benefits in the form of low prices, employees benefi t from having jobs, many businesses benefit from supplying Walmart with goods and services, and communities benefit from tax-paying corporate citizens.
Walmart cites several other values that it promotes in its own self-description. Walmart describes itself as a business that "was built upon a foundation of honesty, respect, fairness and integrity." What is described as the "Walmart culture" is based on three basic beliefs attributed to founder Sam Walton: respect for individuals, service to customers, and striving for excellence. Despite this, not everyone agrees that Walmart lives up to high ethical standards. Critics portray Walmart as among the least admired corporations in the world. Ethical criticisms have been raised against Walmart on behalf of every major constituency-customers, employees, suppliers, competitors, communities-with whom Walmart interacts. For example, some critics charge that Walmart's low-priced goods, and even their placement within stores, are a ploy to entice customers to purchase more and higher-priced goods. Such critics charge Walmart with deceptive and manipulative pricing and marketing. Perhaps the greatest ethical criticisms of Walmart have involved treatment of workers. Walmart is well known for its aggressive practices aimed at controlling labor costs.
Walmart argues that this is part of its strategy to offer the lowest possible prices to consumers. By controlling labor costs through wages, minimum work hours, and high productivity, and by keeping unions away, Walmart is able to offer consumers the lowest everyday prices. Walmart has also been accused of illegally requiring employees to work overtime without pay and to work off the clock. Employees in Wisconsin, Michigan, Missouri, Kansas, Ohio, Washington, Illinois, West Virginia, and Iowa have fi led lawsuits alleging such illegal labor practices. Walmart has also been accused of obstructing employees' attempts to organize unions. The National Labor Relations Board fi led suit against Walmart stores in Pennsylvania and Texas charging illegal antiunion activities. Maine's Department of Labor fi ned Walmart for violating child labor laws, finding 1,436 child labor law infractions in some 20 different Walmart stores. Walmart has also been sued in Missouri, California, Arkansas, and Arizona for violating the Americans with Disabilities Act.