Ethics and Social Responsibility in Marketing Chapter 3

Ethical Marketing= Oxymoron? What are ethics? Ethics are the “moral principles and values that govern the actions and decisions of an individual or group.” Guidelines on how to act

Legal v. Ethical Standards Laws Standards enforceable by the courts Are laws and ethics the same thing? Nike: Illegal? Unethical? Causes for the increasing focus on ethics Diverse value systems within the culture Public groups are more active Expectations have increased Decrease in ethical behavior?

Influences upon What Is Ethical Societal Culture and Norms Business Culture and Industry Practices Corporate Culture and Expectations

Source: www.free-stock-illustration.com Society Societal Culture Levi Strauss Societal Values Patents Source: www.free-stock-illustration.com

Businesses Business Culture Ethics of Exchange The rules of the game in interactions between buyers and sellers, and companies Ethics of Exchange Caveat Emptor Consumer Bill of Rights To safety To be informed To choose To be heard

Businesses Ethics of Competition Economic espionage Bribery Costs businesses in US & Canada nearly $100 billion each year! Bribery Gifts, favors, etc.

Corporate Culture & Expectations Code of Ethics Formal statement listing what comprises acceptable behavior Must be very clear Must be equally applied throughout the organization Whistleblowers

Ethical Theories Moral idealism Utilitarianism Deontological Theories Considers certain rights as universal Do no harm Utilitarianism “The greatest good for the greatest number” Deontological Theories “The ends justify the means”

Social Responsibility Companies are accountable to society or their actions Three types: Profit Responsibility Stakeholder Responsibility Societal Responsibility Environment General Public

Societal Responsibility Environment Green Marketing ISO 14000 General Public Cause-Related Marketing

Public-Policy Issues Deceptive Advertising Advertising to Children Telemarketing Fraud

Deceptive Advertising “Literally false or potentially misleading” False statements Misleading Safety Claims Misleading Affirmative Safety Claims Deceptive Denials of Product Risk Deceptive Information Omissions Unfair Information Omissions What about this?

Advertising to Children Yes, this is real What’s wrong with it? Children may lack the capacity to differentiate between the program and commercial May not understand the marketing intent May make children want unhealthy products Source: www.wikipedia.org Source: www.adstrategy.wordpress.com

Telemarketing Fraud Costs Americans $40 billion per year Who is at risk? Source: Mower & Minor. “Consumer Behavior: A Framework.” Prentice-Hall, New Jersey, 2001.

Compulsive Behavior Smoking Drinking Gambling Compulsive Shopping

Measuring Ethical Conduct Social audit McDonald’s Long-term: Sustainable development Impact of ethical behavior: Word-of-mouth Outperform less ethical competitors

Ethical Conduct- Consumers Dishonest consumer practices Billions of dollars lost annually Consumers are unwilling to pay higher prices for ecologically safe products Consumers lack information