Marketing &

Competition Ethics

NTUST IMBA
Michael Y.S.Kuo, Ph.D.
2016/10/27
 Financial Crisis
Events of Past 20 years
1997 Asian financial crisis
2006 Taiwans cash card crisis
2008 American financial crisis
2010 Greece debt crisis

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 Marketing
Whats Marketing ?
Marketing is based on thinking of the
business in terms of customer needs and
satisfaction.
How to do ?
Promotion through
Price, Service, or
Special package etc..

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

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

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Typical Model of Competition
Low-cost Strategy Model:
Such as Walmarts business model in retail store.
Monopolistic Model:
Resource Monopolization: Control of Row Material
Act of Monopolization : Development of natural resource
with authorization from Government. Such as development
of natural recourse and mineral in South America, etc..
Natural Monopolization : Quantify the production to get
beyond the economy scale in order to obtain relative
competitive advantage, such as Middle East crude oil price.
Joint Monopolization : Joint the pricing to manipulate the
market price, such as Taiwans (domestic) oil.
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 Market Competition Ethics
Attack Pricing Strategy
Offer aggressive price or undercut, Competition Strategy: Such as
competition of domestic telecommunication.
Negotiated Pricing: Such as domestic oil price under negotiated
Low Pricing Strategy
such as US Southwest Airlines
offer Low-cost, Round-trip $199.-
ticketfrom NY to LA.
Exaggerated Promotion strategy
Using unverified or hidden false
$5.0 /15MIN.

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

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 Storm Effect
2005/11 The legislator, Mr. Chung-hsiung Hsu, detonated
concerns of consumption rate of interest concerns
Credit card cash advance derived from Cash Card, also called
dual-card storm
In 2005, Dual-card storms caused around 470 billion market
value of stock evaporated .
2006/Q1 Overdue, up to peak
Cash card =11.7%, Credit card~= 6.2%
Overall, put out 75 billion of bad debt losses
Follow-up debt negotiation mechanism derived enterprise
business ethics and CSR issues.

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Overdue History

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 G&M Discussion -1
1. What is your opinion and point of view of G&M
business competition model?
2. Based on statistical data, dual card storm()
proposeRegeneration()more than 100
thousands people, where young generation make up
a relative majority. What kind phenomenon does it
reflects? Why?
3. Is it reasonable that this event evolve into aIts
rational to borrow money (), no guilt of
consumption ()? Why?
4. Relationship between Consumption culture and
advertisement reflects what kind of hidden issue?
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 G&M Discussion -2
5. Who is the biggest beneficiaries of the victim of this
event? Why?
6. What would be the relation and responsibilities of
the event, individual, bank and government?
7. Why does the Government suffered from public
accusations and forced to intervene after the event.
8. The storm brings a huge attack to the society,
where would be the source?
9. Does this whole event lead us to any further
reflection?

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

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Thank You !