Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-1 ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING C HAPTER

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1.Explain the differences between legal and ethical behavior in marketing. 2.Identify factors that influence ethical and unethical marketing decisions. 3.Describe the different concepts of social responsibility. 4.Recognize unethical and socially irresponsible consumer behavior.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-3 THERE IS MORE BREWING AT ANHEUSER-BUSCH THAN BEER

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-4 NATURE AND SIGNIFICANCE OF MARKETING ETHICS Ethics  Laws Laws Ethical/Legal Framework in Marketing Current Perceptions of Ethical Behavior

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-5 Concept Check 1. What are ethics? A: Ethics are the moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-6 Concept Check 2. What are three possible reasons for the present state of ethical conduct in the United States? A: (1) Pressure on businesspeople to make decisions in a society with diverse value systems. (2) Business decisions being judged publicly by groups with different values and interests. (3) Ethical business conduct may have declined.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-7 UNDERSTANDING ETHICAL MARKETING BEHAVIOR Societal Culture and Norms  Culture

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-8 FIGURE 4-1 FIGURE 4-1 A framework for understanding ethical behavior

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-9 UNDERSTANDING ETHICAL MARKETING BEHAVIOR Business Culture and Industry Practices  Business Cultures  Ethics of Exchange Caveat Emptor Consumer Bill of Rights Consumer Bill of Rights U.S. Consumer Product Safety Commission Federal Trade Commission (FTC)

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-10 Federal Trade Commission Is your online privacy protected?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-11 UNDERSTANDING ETHICAL MARKETING BEHAVIOR Business Culture and Industry Practices  Ethics of Competition Economic Espionage Bribes Kickbacks

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-12 UNDERSTANDING ETHICAL MARKETING BEHAVIOR Corporate Culture and Expectations  Corporate Culture Whistle-blowers Whistle-blowers  Code of Ethics Code of Ethics  Ethical Behavior of Top Management and Co-workers

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-13 UNDERSTANDING ETHICAL MARKETING BEHAVIOR  Moral Idealism Moral Idealism  Utilitarianism Utilitarianism Personal Moral Philosophy and Ethical Behavior

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-14 FIGURE 4-A FIGURE 4-A Personal moral philosophies

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide M Scotchgard Which moral philosophy did 3M use and why?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-16 Concept Check 1. What rights are included in the Consumer Bill of Rights? A: The rights to safety, to be informed, to choose, and to be heard.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-17 Concept Check 2. What is meant by moral idealism? A: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-18 UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING Concepts of Social ResponsibilityConcepts of Social Responsibility  Profit Responsibility Green Marketing Green Marketing  Stakeholder Responsibility  Societal Responsibility Cause Marketing Cause Marketing Profiteering

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-19 FIGURE 4-2 FIGURE 4-2 Three concepts of social responsibility

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-20 Avon Why do companies engage in cause marketing?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-21 UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING  Social Audit Social Audit  Sustainable Development The Social Audit: Doing Well by Doing Good Turning the Table: Consumer Ethics and Social Responsibility

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-22 Ronald McDonald House How do companies ‘do well by doing good’?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-23 Reebok Why is sustainable development important?

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-24 Concept Check 1. What is meant by social responsibility? A: Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-25 Concept Check 2. Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called _____________. green marketing

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-26 Concept Check 3. What is a social audit? A: A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in the domain of social responsibility.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-27 DOING WELL BY DOING GOOD GOING ONLINE

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide Visit the BSR website. Can you update at least one example in the text related to your chosen topic? Going Online

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-29 STARBUCKS CORPORATION: SERVING MORE THAN COFFEE VIDEO CASE 4

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-30 VIDEO CASE 4 Starbucks

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-31 VIDEO CASE 4 Starbucks FIGURE 1 FIGURE 1 Starbucks Mission Statement and Guiding Principles

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide How does Starbucks’ approach to social responsibility relate to the three concepts of social responsibility described in the text? VIDEO CASE 4 Starbucks

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide What role does sustainable development play in Starbucks’ approach to social responsibility? VIDEO CASE 4 Starbucks

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-34 THE FIVE MOST COMMON KINDS OF ECONOMIC ESPIONAGE SUPPLEMENTAL LECTURE NOTE 4-1

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-35 THE ETHICS OF COMPETITIVE INTELLIGENCE IN-CLASS ACTIVITY 4-1

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-36 Fuld & Company Brochure

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-37 Ethics Ethics are the moral principles and values that govern the actions and decisions of an individual or group.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-38 Laws Laws are society’s values and standards that are enforceable in the courts.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-39 Consumer Bill of Rights (1962) The Consumer Bill of Rights (1962) is a law that codified the ethics of exchange between buyers and sellers, including the rights (1) to safety, (2) to be informed, (3) to choose, and (4) to be heard.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-40 Code of Ethics A code of ethics is a formal statement of ethical principles and rules of conduct.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-41 Whistle-blowers Whistle-blowers are employees who report unethical or illegal actions of their employers.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-42 Moral Idealism Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-43 Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number,” by assessing the costs and benefits of the consequences of ethical behavior. Utilitarianism

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-44 Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions. Social Responsibility

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-45 Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products. Green Marketing

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-46 Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products. Cause Marketing

Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-47 A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility. Social Audit