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Chapter 5 ♦ Developing a Global Vision 17
Chapter 5 ♦ Developing a Global Vision 18
GREAT IDEAS FOR TEACHING CHAPTER 5
James S. Cleveland, Sage College of Albany
DISCUSSION BOARD TOPICS TO ENCOURAGE PARTICIPATION
Discussion board questions provided to students to encourage them to engage in thinking and writing about the content
of the Principles of Marketing course usually take the form of a provocative statement to which students are asked to
respond. An example of this would be “All PR is good PR.”
Discussion topics such as this one are abstract and often require that the instructor provide an initial reply to show
students what is expected of them in their own replies. For students with limited work experience, this approach may be
quite appropriate. For adult students with extensive experience as employees and consumers, however, the abstract
nature of such topics can be frustrating.
I have developed, therefore, a series of discussion board questions to use with experienced, adult students. These
questions are designed to encourage them to use their experiences as employees and consumers as doorways to better
understand the course material, and to make their own responses more interesting to themselves and to the other students
in the class who will read and comment on them.
Each question has three parts:
1. First, there is a sentence or two from the students’ textbook introducing the topic. By using the text author’s
own words, students are enabled to locate relevant material in the text more easily, the text content is
reinforced, and confusion resulting from use of variant terms or expressions is minimized.
2. Second, there is a reference to text pages the student should review before proceeding. Since the goal of the
exercise is for students to apply the course content to their own experiences, reviewing the content first is
important.
3. Third, there is a request for the student to think about or remember some specific situation in their experience to
which they can apply the text material, and a question or questions for them to address in their reply.
Here are additional such discussion board questions developed for Chapter 5 of MKTG10. Each is written to fit the same
text cited above but could easily be rewritten and revised to fit another text.
Series A
1. No longer just an option, global marketing—marketing that targets markets throughout the world—has become an
imperative for business.
2. Review the information on the rewards of global marketing in section 5-1 of your text.
3. Then describe how your employer (current or past) participates in the global marketplace by buying foreign-made
goods and services or selling its goods and services abroad.
Series B
1. A company that is heavily engaged in international trade, beyond exporting and importing, is called a multinational
corporation.
2. Review the information about multinational corporations in section 5-2 of your text.
3. Describe the products you buy that are manufactured by multinational corporations. How many of them are not
made in this country? (Check labels or packaging to see where they were made.) Do you think this is a good
situation? Why or why not?
Chapter 5 ♦ Developing a Global Vision 19
John L. Beisel, Pittsburg State University
FORCING INTERNATIONAL COMMUNICATION
Students from other countries who are studying in the United States bring with them a rich cultural heritage and
perspective that most American students seldom bother to learn about. In fact, many American students rarely even take
the opportunity to talk to an international student during their college years, even though they have sat in class with them
time after time. I have had international students tell me upon graduation that they regret the fact that they never became
friends with an American student.
I decided to force communication between the two groups at every opportunity in my classes. In my International
Marketing course, the students are divided up into teams consisting of four students, and each team is assigned a country.
Their task is to develop a plan for marketing a specific consumer product to their assigned country, in 25 pages or less.
In a recent class, I appointed 11 teams of four students each. Each team was assigned a different country. Those 11
countries that were most represented by students in our university were the 11 countries assigned. They were India,
Indonesia, Japan, Malaysia, Nigeria, Pakistan, Paraguay, Singapore, South Korea, Taiwan, and Thailand. The teams were
expected to personally interview a minimum of four students from the country that they were assigned. The interviews
consisted of learning about the customs, product preferences, buying habits, prices, competitors, types of retail outlet
shops, and so forth, in the home country of the students interviewed, especially relating to the product assigned.
The final report for each team included, among other things, a country analysis with a brief description of the market
(demographics, primary marketing areas, etc.), an economic profile of the country, business customs, consumer behavior,
general U.S. relationships with the country, export prospects to the country, and the country’s restrictions on imports.
Also, customs regulations had to be cited regarding documentation, packing, labeling, marking, import quotas and
restrictions, tariffs, trademark protection, taxes, import licensing, shipping documents, health and sanitary requirements,
and so forth. Much of this information could be found in Overseas Business Reports.
Each team also created a brand name and a package design. A pricing policy was decided on, as well as a promotional
strategy. Common distribution channel alternatives were named, and entry alternatives (i.e., licensing, trading
companies, franchising, agents, joint venture, wholesalers, etc.) were chosen.
The students were quite positive about the project as a learning experience, especially regarding the face-to-face contact
with international students. During the interviews the students found new friends, and in some instances were even
invited to the interviewees’ living quarters for a meal with an international flavor.
Chapter 5 ♦ Developing a Global Vision 20
David J. Brennan, Webster University – St. Louis, Missouri
IT’S NOT FUNNY MONEY!
In teaching International Marketing, it is important for American students to develop a knowledge of foreign currencies.
For marketing students, this need not be a detailed financial knowledge but simply an awareness of a few key
international currencies and their names, symbols, and relative values.
Given a list of several relatively familiar countries, students are asked to name the currency of that country and to
indicate the symbol used to designate that currency. Some typical countries, currencies, and symbols (with the United
States as an example) could include [answers in brackets]:
Country
Currency
Symbol
Example:
USA
Dollar/cent
$ US
Australia
[Dollar/Cent]
[$AUS]
Belgium (or
other EU
member)
[Euro]
[€]
Canada
[Dollar/Cent]
[$CD]
Russia
[Ruble]
[RUB]
Great Britain
[Pound/Pence]
[£]
Hong Kong
[Dollar]
[$HK]
Ireland
[Punt]
[Pt]
Japan
[Yen/Sen]
[¥]
Poland
[Zloty]
[Z]
Switzerland
[Franc]
[Sf]
Mexico
[Peso]
[$MXN]
Aregentina
[Peso]
[$ARS]
China
[Yuan]
[元]
These, as well as other countries and their respective currencies, can be found in the foreign exchange listings in the
Financial Section of the Wall Street Journal. This listing provides the country, its major currency and foreign exchange
values for the previous two business days in terms of foreign currency value in $US, and $US in terms of value in the
foreign currency. If possible, it is also useful to go to a local bank and get (buy a few foreign currency bills (£, DM, Ff,
$CD) for class.
Several aspects of foreign currencies, as they may apply to marketing students, can be raised during class discussion.
These could include:
• Some currencies have similar names (e.g., the dollar in the United States, Canada, and Hong Kong and the peso
in Mexico, Argentina, Chile, Colombia, and Uruguay) but all have very different values.
• It is important for marketing students to be aware of the relative values of the currencies of key major trading
partners (Canada, Germany, Great Britain, China, and Japan). It illustrates how one can use those foreign
currencies with values less than, approximately equal to, and greater than the U.S. dollar. For example, in fall
2012:
✓ The Canadian ($CD) dollar is close to the value of the U.S. dollar ($US): 1 $CD = 0.97 $US or 1 $US = 1.03
$CD
✓ The Euro (€) is worth more than the U.S. dollar ($US): 1 € = 0.76 $US or 1 $US = 1.31€
✓ The Japanese Yen (¥) is worth much less than the U.S. dollar ($US): 1 ¥ = 0.013 $US (1¢ US) or 1 $US = 79
¥
✓ The British pound (£) is worth more than the U.S. dollar ($US): 1 £ = 1.62 $US or 1 $US = 0.62 £ (62 pence)
• Changes in foreign currency values in terms of the U.S. dollar can impact international business. A good example
of that is of the Japanese yen (¥). In 1987, 1 $US was worth (bought) approximately 250 ¥, while in 1992 the
Chapter 5 ♦ Developing a Global Vision 21
U.S. dollar weakened (and the Japanese yen strengthened) and 1 $US was only worth (bought) approximately
128 ¥ and in 1996 it hovered in the 80–100¥ to the 1 $US range. A useful point of discussion is the change in
foreign or U.S. consumer buying power due to such a change of currency values.
This exercise can educate American marketing students who are typically used to operating only in the U.S. dollar.
Although the U.S. dollar is still a key global currency, other currencies, such as the Euro, are important to understand. It
can illustrate to our students that foreign currencies are not “funny money” and need to be taken seriously in international
marketing.
Jacqueline J. Kacen, University of Michigan – Dearborn
CROSS-CULTURAL MARKETING: TAKING THE BRAND LOCAL?
What must international and cross-cultural marketers think about when introducing products into foreign markets?
Instead of focusing on familiar U.S. products being introduced into a new foreign market, this exercise has students
introduce a foreign product into the United States. This exercise works well as an in-class exercise, a group project, or an
individual homework assignment.
The product I use for this exercise is Vegemite, a Kraft product manufactured and sold in Australia and New Zealand.
However, any foreign product that is not currently marketed in the United States can be used in class.
As an introduction to the exercise, I provide students with a one-page summary of the product—its history, ingredients,
uses, target market, and position—in its home market. Alternatively, depending on time and resources, students can be
required to research the product on their own. Information about Vegemite, for example, is available through various
Web sites. This exercise can provide an opportunity for students to access Internet resources.
I also bring the product in to class so students can see it in its “original” form. By using a food product such as Vegemite,
students can also actually taste the product and thus better understand and appreciate its composition. (Note: Most
American students hate the taste of Vegemite, so I also provide soft drinks and pieces of candy to students so they can
“cleanse their palates.”)
The background information on the product and the taste experience provide students with enough information to create
their own marketing strategy for the product. Individually, in groups, or as a class, students are instructed to develop a
marketing plan for Vegemite’s introduction into the United States. The plan should include the target market, the
product’s positioning statement, packaging and size considerations, price (or pricing strategy), distribution strategy, and
promotional strategy. A discussion of the marketing plan(s) follows. The differences and similarities between consumers
in the United States and in the home country of the product should be highlighted during the class discussion.
Andrew Banasiewicz, Louisiana State University
GLOBALIZING THE THINKING OF BUSINESS STUDENTS
During the last decade, we have seen a strong emphasis being placed on providing business students with a more global
orientation. To accommodate this, we need to make the students realize that being raised in a particular culture results in
their “business perceptions,” as employed in a particular context, being not only a function of the actual attributes, but
their respective cultural background as well. I have devised a simple exercise aimed at forcing students to think of other
cultures not in terms of the potential differences, but rather in terms of strengths, weaknesses, opportunities, and threats
that these diverse environments may provide.
On a first day of class, I ask students to write on an index card their name, major, classification, and then two groups of
countries. The students are instructed to, for Group 1, create a list of foreign countries, which they perceive as being
most culturally similar to their own. Conversely, Group 2 is to be composed of five countries that they perceive as being
culturally most dissimilar to their own country. Lastly, the students are asked to consider a generic industrial product
Chapter 5 ♦ Developing a Global Vision 22
(such as a bearing), and use a scale of 1–10 to rate the perceived quality of that product that is being manufactured in
their own country of origin, the country they judged as most culturally similar, and lastly the country they judged most
culturally dissimilar. Due to the fact that the product under consideration is rather hard to compare on its functional
attributes, the students are forced to base their ratings on their culturally based attitudes.
Having collected all that information, I then group the lists of the most culturally similar and dissimilar countries. Then I
divide students into groups has and assign a specific country or region to each group. The groups are usually composed
of about four students who are paired and matched in such a way that two of the students have listed their group’s
country as one that they believe to be most similar to their own country, while the other two listed it as being culturally
most dissimilar to their own country. Following that, I announce that each of the groups is to choose a product or service
and attempt to market it in the country assigned to them. The groups are to view themselves as consulting teams
responsible for creating the marketing mix comprised of product, price, promotion, and distribution.
The groups are given most of the semester to work on the project, which is culminated by formal presentations.
Following the presentations, the students are asked to once again rate the perceived quality of a generic industrial product
being manufactured in their own country, the country most culturally similar, and the country most culturally dissimilar
to theirs. Following that, the ratings are compared against those recorded in the beginning of the semester and a
presentation is made regarding the differences. Lastly, the culturally motivated perceptual bias is discussed and the
opinions are solicited regarding the learning process that took place while working on the project.
Chapter 5 ♦ Developing a Global Vision 23
PART 1 – Integrated Case Assignments
MARKETING MISCUES
Concerns over Sustainability Result in Social Media Disaster for Nestlé
In March of 2010, Greenpeace began coordinating environmental activists in a protest over Nestlé’s alleged
purchase of palm oil from an Indonesian company that Greenpeace International claimed was destroying the rain forest
in the building of palm plantations. The palm oil was used to make Kit Kat candy bars. Although Nestlé claimed to have
already made the decision to no longer do business with the supplier, while also asserting that the purchase had
comprised only 1.25 percent of the company’s total palm oil consumption in 2009, the company was a vulnerable target
for environmental activists because of its history of questionable practices with respect to child labor and infant formula.
The coordinated efforts of the activists were composed of two major components. Greenpeace staged a protest
outside Nestlé’s headquarters in Switzerland and a mock Kit Kat commercial was posted on YouTube. Protesters at the
company headquarters wore cutouts of the candy bar but instead of the bar saying “Kit Kat,” it said “Killer.” The Kit Kat
commercial parody portrayed an office worker opening the candy bar and munching on a bloody orangutan finger. As
YouTube videos go, the Nestlé parody was shared far and wide via social media platforms such as Facebook and Twitter.
Like many companies, Nestlé has a fan page on Facebook to interact with its consumers. The Facebook fan page is a
location that enables dialogue about the company’s brands. Once the commercial parody hit the social media airwaves,
protesters began posting negative comments about the company on Nestlé’s Facebook fan page. Nestlé responded with
two actions. One, it asked Google’s YouTube to remove the commercial parody from the site due to copyright
infringement, and YouTube adhered to the request. However, the video had been downloaded, and it still spread across
the Internet. Two, Nestlé also told Facebook users that the company would delete their comments from the fan page if
the “Killer” logo was used. Apparently, angry protesters had begun to replace their profile pictures with the “Killer”
logo.
Interestingly, it was Nestlé’s response to actions within the social media ecosystem and not the palm oil issue itself
that erupted in war for the company. Nestlé’s threat to delete comments that included the altered Kit Kat logo (“Killer”)
incited the users of the company’s fan page. The fan base on Nestlé’s Facebook page soared to over 95,000 fans.
Unfortunately, the vast majority of this 95,000 were protesters, and Nestlé went on the defensive. The Nestlé online
moderator manning the fan page began to respond to individual postings in a derogatory and condescending tone. For
example, the moderator is purported to have said something like, “...it’s our page, we set the rules...” This just served to
fuel the online media firestorm even more, as the exchange quickly hit the Twitter circuit and even more people began to
visit the company’s Facebook fan page. Many of these visitors likely had no idea about the palm oil issue—they were
going to the fan page to see for themselves how Nestlé was engaging with its customers.
Ultimately, Nestlé’s rules of engagement for social media became a trending topic on Twitter, which resulted in
calls for a boycott of all of Nestlé’s products. The trending occurred because such a large number of people were
commenting on the same thing about Nestlé. As such, the issue appeared on the trend bar on Twitter’s home page. This
generated even more negative publicity for the company. Soon, the electronic word of mouth began to spread to the
offline world. This rapid spread of negativity led to panic among Nestlé shareholders and share prices began to drop
dramatically.
Nestlé had a social media disaster on its hands. Interestingly, that disaster was due to the way Nestlé engaged in
interactions on Facebook—not because of the fact that it had purchased palm oil from a non-sustainable company. The
negative social media engagement, however, brought the palm oil issue to the forefront of people’s minds who might not
have otherwise even thought about sustainability concerns related to candy bars. Thus, while the sustainability concern
might have lost its luster in a few days and activists would have moved on to the next cause, the social media
engagement snowballed and affected the company financially.
Sources: Raj Dash, “The Facebook Nestlé Mess: When Social Media Goes Anti-Social,” All Facebook, March 22,
2010, www.allfacebook.com/the-facebook -nestle-mess-when-social-media-goes-anti-social-2010-03; Rick Broida,
“Nestlé’s Facebook Page: How a Company Can Really Screw up Social Media,” BNET, March 19, 2010,
www.bnet.com/blog/businesstips/nestles-facebook -page-how-a-company-can-really-screw-up-social-media/6786;
“Nestlé and Black Friday,” March 23, 2010, www.rgc-media.com/nestle-and-black-friday; Emily Steel, “Nestlé
Takes a Beating on Social-Media Sites,” Wall Street Journal, March 29 2010,
http://online.wsj.com/article/SB1000142405270230443440457 5149883850508158.html.
Open-ended questions
1. How could Nestlé have handled the situation differently? Should the company have simply shut down its
Facebook page?
Most students will agree that the employee in charge of Nestlé’s Facebook fan page really instigated the negative social
2. Although the Kit Kat candy bar was at the original heart of the issue, what other products/companies are
owned by Nestlé? Could these products be affected by the Kit Kat social media fiasco?
Students should be directed to www.nestle.com to identify the product mix at Nestlé—any of which could have been
affected. Product categories and brands include:
Close-ended questions
True and False
1. Until it was accused by Green Peace of deforestation, Nestlé had no prior controversies surrounding its corporate
ethical behavior.
True
False
ANS: F
Nestlé was a vulnerable target for environmental activists because of its history of questionable practices with respect to
child labor and infant formula.
OBJ: LO-3.2
TOP: AACSB Ethics
KEY: CB&E Model International Perspective
MSC: BLOOMS Level I Knowledge
2. Once accused by Greenpeace, Nestlé chose not to exercise any ethical responsibility.
True
False
ANS: F
Nestlé claimed to have already made the decision to no longer do business with the palm oil supplier.
Chapter 5 ♦ Developing a Global Vision 25
OBJ: LO-3.3
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
3. If Nestlé’s supply-chain and/or marketing managers had performed a SWOT analysis of its supply sources for palm
oil, it could have foreseen that Greenpeace might have taken the action it did.
True
False
ANS: T
A classic SWOT analysis would deem environmental organizations an external threat.
OBJ: LO-2.5
TOP: AACSB Analytic
KEY: CB&E Model Strategy
MSC: BLOOMS Level I Knowledge
4. Even if the Twix commercial parody infringed on its copyright, Nestlé should have allowed it to remain because that
would be doing the “right thing”—that is, it would show corporate social responsibility.
True
False
ANS: F
Nestlé acted appropriately in the face of a marketing threat and it had at least tried to address the issues that Greenpeace
had raised against it.
OBJ: LO-2.5, 3.3
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level I Knowledge
Multiple Choice
5. How could Nestlé have better anticipated its mistake with social media in triggering a more widespread boycott?
a.
By not responding to boycott proponents on Facebook and the like.
b.
By better training its Facebook monitor.
c.
Users of social media tend to be opinionated and so a proper response can be anticipated.
d.
By censoring its social media presence.
e.
all of the above
ANS: c
Gen Yers have been encouraged by their parents, teachers, and other authority figures to share their opinions. As a result,
this group feels that their opinions are needed. This is also true of the next generation.
OBJ: LO-4.3
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
6. Which of the following might have helped Nestlé’s Facebook monitor prevent a public relations disaster and a
damaging boycott?
a.
seeing Facebook posters, even those against Nestlé, as stakeholders and customers
b.
a code of ethics to help the moderator in better interacting with Facebook posters
c.
a company that supports sustainable resources
d.
to have a prepared statement from the chief ethics officer
e.
all of the above
ANS: b
Ethics consists of those unwritten rules we have developed for our interactions with one another.
OBJ: LO-3.1
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
7. The Nestlé managers who oversee the content and interaction that takes place on its Facebook, Twitter, and the like
should now perform routine __________ to ensure that social media no longer poses an external threat.
a.
marketing analysis
b.
removal of controversial postings
c.
environmental scanning
d.
performance reviews of its monitors
e.
surveys of users
ANS: c
Environmental scanning provides information about forces, threats, events, and relationships in the external environment
that may affect the future of the organization or the implementation of a marketing plan.
OBJ: LO-2.5
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
8. The Natural Marketing Institute has identified a number of trends that are now becoming American consumer values.
Since Twix’s main market is the U.S., which trend(s) should Nestlé consider in both the marketing and production of its
candy bars.
a.
EcoTechMed
b.
meaningful green
c.
getting off the grid
d.
component lifestyle>
e.
all of the above
ANS: b
The Natural Marketing Institute has identified this trend, which reveals that Nestlé’s American market is going green and
would perceive Greenpeace in a positive light and be receptive to its message.
OBJ: LO-4.2
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer
MSC: BLOOMS Level II Comprehension
9. In purchasing palm oil for its candy bars from a nonsustainable supplier, which level in the pyramid of corporate
responsibility did Nestlé neglect?
a.
economic responsibility
b.
social responsibility
c.
ethical responsibility
d.
philanthropic responsibility
e.
legal responsibility
ANS: c
By buying from a nonsustainable supplier, Nestlé could be seen as not being ethical, doing what is right, just, and fair,
and lastly, avoiding harm to the environment.
OBJ: LO-3.3
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
10. From a marketing standpoint organizational focus, what did Nestlé do right in doing the wrong thing—by letting the
social media disaster do more damage to its reputation than selling Twix candy bars?
a.
Nestlé sought to earn the trust of Twix consumers by changing suppliers.
b.
Nestlé gave buyers the facts.
c.
Nestlé protected the market share of its Twix brand.
d.
Nestlé focused on customer value in regard to keeping Twix’s material costs low.
e.
all of the above
ANS: e
Nestlé behaved in a way that exhibits a market orientation as well as a market-oriented strategy.
OBJ: LO-1.3; 2.1
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
Chapter 5 ♦ Developing a Global Vision 27
CRITICAL THINKING CASE
Telekom Austria Group: Sustainability to Increase Value
Telekom Austria Group is the largest telecommunications provider in Austria, where it has over two million fixed
net lines. The company has close to 20 million mobile subscribers in its eight geographic markets, and each market is
served by a separately identified subsidiary within the Telekom Austria Group:
• A1 Telekom Austria
• Mobiltel in Bulgaria
• velcom in Belarus
• Vipnet in Croatia
• Si.mobil in Slovenia
• Vip mobile in Republic of Serbia
• Vip operator in Republic of Macedonia
• mobilkom liechtenstein
The overarching goal of the company is to be the most innovative and efficient telecommunications provider in the
central and eastern European marketplace. Driving the attainment of this goal are four corporate values: innovation,
diversity, responsibility, and quality. Through these values, the company aspires to be profitable while satisfying a wide
range of stakeholders. These stakeholders include customers, employees, employee union, shareholders/investors,
suppliers, municipalities, neighbors, NGOs, public policy makers, and special interest groups. The company prides itself
on its group-wide corporate social responsibility (CSR) efforts that seek to provide benefit to all stakeholders.
Sustainability Both Internally and Externally
As an information and communications technologies (ICT) company, Telekom Austria Group seeks to expand and
further develop environmentally friendly technologies. One area that the company has a keen interest in is the
virtualization of products and services. In the words of the company, think “data traffic instead of road traffic.” Examples
of such virtualization due to ICT are: music and film downloads instead of the purchase of CDs and DVDs; online tax
filing instead of using paper to file via the mail service; video conferencing instead of traveling for meetings; and tele-
working instead of making the daily commute to the physical office. Sustainability efforts for ICT at Telekom Austria
include: reducing CO2 emissions, energy efficiency at computer centers, intelligent use of resources by managing
capacity according to volume usage, converting to green electricity, using employees as environmental ambassadors, and
conserving resources with its motto of “reduce – reuse – recycle.” The company’s resource conservation efforts flow
directly to customers via online billing, a green signature for e-mails so as to encourage reduction of unnecessary
printing, mobile phone recycling, toner collection tied to charitable giving (one euro is donated for each toner cartridge
collected), and the production of environmentally friendly phones.
ICT Integration into Customers’ Lives
ICT is an indispensable aspect of everyday life in the 21st century. At the business-to-consumer (B2C) level, its use
appears in everything from social media communications (e.g., Facebook, Twitter, and YouTube) to shopping to online
banking to online education. From a business-to-business (B2B) perspective, ICT enables everything from product
routing via radio frequency identification (RFID) tags to data security. RFID tags emit radio waves that are decoded by a
reading device for the purposes of identification of inventory and tracking. Given the importance of ICT in the lives of
all customers, Telekom Austria considers customer service to be a critical success factor for the company. The
company’s A1 Service Center was the first Austrian service center in the mobile communications industry to be certified
according to the new European standard for customer care centers. In 2009, the company launched a new customer
service program called “Kundiologie.” With the motto of “Meet the Customer,” the company attempts to engage its
employees in real-time interactions with customers and then channels these insights into the areas of product
management and customer service. Thus, the company ties customer satisfaction to its employees in an active manner.
As such, employees, particularly those working in customer service departments, receive regular training in customer
relationship management and customer service.
Respondents in a 2009 customer satisfaction survey gave employees in the Technical Customer Service department
at Telekom Austria scores of “excellent” for their expertise, friendliness, and solutions-oriented attitudes. Additionally,
respondents were also highly satisfied with issues related to product installation and waiting times. The importance of
customer satisfaction is driven home internally by the fact that a customer satisfaction measure has been incorporated
into performance contracts of employees in one division of the company.
Chapter 5 ♦ Developing a Global Vision 28
Sustainability Audit
The Telekom Austria Group documents its sustainability performance and provides an annual sustainability report to
its stakeholders and the general public. The performance measures follow guidelines offered by the Global Reporting
Initiative, thus enabling comparisons to generally accepted indicators of international sustainability reporting. To
advance sustainability efforts and management, the company recently implemented a group-wide CSR management
system. The goal is to integrate all international subsidiaries into the existing sustainability management and reporting
system.
Sources: “Our Understanding of Sustainability,” Telekom/Austria Group,
www.telekomaustria.com/verantwortung/understanding_sustainability.php; “The Most Important Figures of
Sustainability from our Markets,” Telekom Austria Group, 2009/2010, http://sr2009-10.telekomaustria.com.
Open-ended questions
1. How will Telekom Austria’s commitment to the triple bottom line (planet, people, profit) provide value to the
company’s bottom line?
When it comes to sustainability, the bottom line is comprised of two components: corporate social performance and
corporate financial performance. However, the financial world and shareholders tend to assess performance on the
corporate financial performance metric. Thus, it is imperative that Telekom Austria be able to show the link between
sustainability and market outcomes, since performance in the marketplace is a critical precursor to financial performance.
2. Much is discussed about customer service within the context of sustainability at Telekom Austria. Why is
customer satisfaction included in the topic of sustainability?
In the 21st century, corporate social responsibility in innovative companies improves customer satisfaction in companies
Close-ended questions
True and False
1. ICT stands for information and customer technologies, which states Telekom’s market orientation.
Chapter 5 ♦ Developing a Global Vision 29
True
False
ANS: F
ICT stands for information and communications technologies.
OBJ: LO-1.3
TOP: AACSB Reflective Thinking
KEY: CB&E Model Product
MSC: BLOOMS Level I Knowledge
2. As part of its customer service, Telekom is a full-service green company so that customers can effortlessly participate
without changing their own personal behaviors.
True
False
ANS: F
The company’s resource conservation efforts flow directly to customers who are encouraged to use online billing that
requires no printing and the like.
OBJ: LO-3.3
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer
MSC: BLOOMS Level I Knowledge
3. A sustainable behavior that Telekom encourages in its customers might mean paying more for an environmentally
friendly phone that has its recycle fee built into its cost.
True
False
ANS: T
Environmentally aware consumers tend to earn more and are willing to pay more for green products.
OBJ: LO-3.3
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer
MSC: BLOOMS Level I Knowledge
4. Telekom’s commitment to sustainability can be translated into bottom line performance.
True
False
ANS: T
Studies have shown that market outcomes and corporate reputation are both linked to firm financial performance. On the
business side, a separate survey of 270 corporate communications professionals found that 43 percent expect to increase
their marketing of their sustainability programs.
OBJ: LO-3.3
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Level I Knowledge
Multiple Choice
5. Which of the following would you expect to read in Telekom’s mission statement?
a.
Telekom is above all a green company.
b.
Telekom means sustainability.
c.
Telekom seeks to integrate all its resources into the welfare of his customers.
d.
Telekom desires to be the most innovative and efficient telecommunications provider in its market.
e.
Telekom is an environmentally friendly company that serves its investors.
ANS: d
The overarching goal of the company is to be the most innovative and efficient telecommunications provider in the
central and eastern European marketplace.
OBJ: LO-2.4
TOP: AACSB Ethics
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
Chapter 5 ♦ Developing a Global Vision 30
6. Telekom, in finding ways to benefit its stakeholders, exercises __________ as a guiding principle.
a.
resource conservation
b.
ethical decision making
c.
corporate social responsibility
d.
ethical culture
e.
all of the above
ANS: c
The company prides itself on its group-wide corporate social responsibility (CSR) efforts that seek to provide benefit to
all stakeholders.
OBJ: LO-3.3
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
7. Telekom’s Kundiologie (literally, “customerology”) program is intended to improve __________ as well as customer
service.
a.
its cellular phones
b.
its employees’ ability to interact with clients
c.
its automated answering system
d.
611 online support
e.
none of the above
ANS: e
Telekom attempts to engage its employees in real-time interactions with customers and then channels these insights into
the areas of product management.
OBJ: LO-1.2
TOP: AACSB Reflective Thinking
KEY: CB&E Model Customer
MSC: BLOOMS Level II Comprehension
8. What does Telekom mean by achieving “data traffic instead of road traffic”?
a.
using wireless technologies to help customers leave less of a “carbon footprint”
b.
using fuel efficient service vehicles
c.
facilitating smartphone purchases
d.
achieving a complete reliance on m-commerce for all its transactions
e.
none of the above
ANS: a
Telekom seeks to expand environmentally friendly information communication technologies to facilitate online
purchases that use less energy that driving to a store.
OBJ: LO-3.3
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
9. In setting a corporate goal for itself in order to satisfy its broad constituency of stakeholders, which of the following is
not explicitly stated?
a.
sustainability
b.
innovation
c.
quality
d.
responsibility
e.
diversity
ANS: a
Driving the attainment of this goal are four corporate values: innovation, diversity, responsibility, and quality.
OBJ: LO-1.2
TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy
MSC: BLOOMS Level II Comprehension
10. Why does Telekom follow guidelines issued by the Global Reporting Initiative (the GRI is an NGO based in
Chapter 5 ♦ Developing a Global Vision 31
Amsterdam) in auditing its sustainability performance?
a.
The GRI is a European Union agency and it is the law.
b.
Telekom desires to cooperate with a nonprofit organization for their mutual benefit.
c.
Such audits also reveal Telekom’s financial performance, which is really its primary goal.
d.
Telekom seeks to compare its initiatives to generally accepted indicators of sustainability.
e.
Telekom has international subsidiaries that must legally have uniform sustainability goals.
ANS: d
Telekom’s seeks to meet what are generally accepted indicators of sustainability being reported by other organizations to
the GRI.
OBJ: LO-3.3
TOP: AACSB Reflective Thinking
KEY: CB&E Model International Perspective
MSC: BLOOMS Level II Comprehension
