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Marketing &

Competition Ethics

Michael Y.S.Kuo, Ph.D.

Financial Crisis Events of Past 20 years • 1997 Asian financial crisis • 2006 Taiwan’s cash card crisis • 2008 American financial crisis • 2010 Greece debt crisis 1 .

Service. Marketing • What’s Marketing ? Marketing is based on thinking of the business in terms of customer needs and satisfaction.. or Special package etc. • How to do ? Promotion through Price. 2 .

Free-market economies should follow law of Supply and Demand to develop market managing strategy under competition ethics. origin from 18 century classical by economist Dr. Economy and Market Free Economies and Competition Law • Free Economies. • View the Competition of Free-Market Economies through Theory of Evolution 3 . Adam Smith.

Free-Market Economies • Innovation & Competition For the sake of competiveness. free market will derived unfair competition model. it is a need for enterprise to pursuit innovation and management continuously: “Good to Great” to promote Economic Growth. join monopolization.. etc. • Competition without Ethics If an enterprise pursuing profit maximization while lack of standardized mechanism and self-discipline. 4 . such as price negotiation.

Typical Model of Competition Low-cost Strategy Model: Such as Walmart’s business model in retail store.. • Joint Monopolization : Joint the pricing to manipulate the market price. 5 . such as Taiwan’s (domestic) oil. • Natural Monopolization : Quantify the production to get beyond the economy scale in order to obtain relative competitive advantage. etc. such as Middle East crude oil price. Such as development of natural recourse and mineral in South America. Monopolistic Model: • Resource Monopolization: Control of Row Material • Act of Monopolization : Development of natural resource with authorization from Government.

• Negotiated Pricing: Such as domestic oil price under negotiated • Low Pricing Strategy such as US Southwest Airlines offer Low-cost. Competition Strategy: Such as competition of domestic telecommunication.0 /15MIN.- ticket…from NY to LA.. 7 . • Exaggerated Promotion strategy Using unverified or hidden false $5. Market Competition Ethics • Attack Pricing Strategy Offer aggressive price or undercut. advertisement as marketing promotion methods. Round-trip $199. etc.

HSBC and other bank then follow up • 10~300k cash advance card. with interest of 18~22 % • 2002 issued more than 700 thousands cards. Chinese. Accumulate overdraft around NT$240 billion • Cosmos Bank earned a capital within a year of release. Taishin. Case: Cash Card Crisis George & Mary: • Slogan 諧音: 救急(emergency).com/watch?v=evgXzvqNUYs 8 . with loan amount of 50 billion • 2005 near 400 thousands of people cannot pay back the免利(interest free) ! ?? • 1997-7 first launched by Cosmos Bank • 1999 Ta Chong Bank. • https://www.

put out 75 billion of bad debt losses • Follow-up debt negotiation mechanism derived enterprise business ethics and CSR issues. up to peak Cash card =11.2% • Overall. Storm Effect • 2005/11 The legislator. 10 . Mr. also called dual-card storm • In 2005. Dual-card storms caused around 470 billion market value of stock evaporated . Credit card~= 6. Chung-hsiung Hsu. • 2006/Q1 Overdue. detonated concerns of consumption rate of interest concerns • Credit card cash advance derived from Cash Card.7%.

Overdue History 11 .

where young generation make up a relative majority. G&M Discussion -1 1. dual card storm(雙卡風暴) propose「Regeneration(更生)」more than 100 thousands people. What kind phenomenon does it reflects? Why? 3. no guilt of consumption (消費無罪)」? Why? 4. Relationship between Consumption culture and advertisement reflects what kind of hidden issue? 12 . What is your opinion and point of view of G&M business competition model? 2. Based on statistical data. Is it reasonable that this event evolve into a「It’s rational to borrow money (借錢有理).

G&M Discussion -2 5. The storm brings a huge attack to the society. What would be the relation and responsibilities of the event. individual. where would be the source? 9. bank and government? 7. 8. Does this whole event lead us to any further reflection? 13 . Who is the biggest beneficiaries of the victim of this event? Why? 6. Why does the Government suffered from public accusations and forced to intervene after the event.

Advertisement strategy and Law consumer psychology (Supervise by Gov. The business model of Perceived value Gaining profit from the poor. Supervising Responsibility (Banking) (Personal) 2. Social Attack 14 . No winner of the Money Game • Personal: Debt. (Ethics) • Government: Supplier Consumer 1. Life and Lose Credit • Banking: Competition 1.) 2. Legal but controversial (有爭議) with high interest rates 3.

Thank You ! .