© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-1

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-2 ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING C HAPTER

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-3 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 ethics and social responsibility. 4.Recognize unethical and socially irresponsible consumer behavior.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin NATURE AND SIGNIFICANCE OF MARKETING ETHICS Slide 4-5 Ethics  Laws Laws Ethical/Legal Framework in Marketing Current Perceptions of Ethical Behavior

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-6 FIGURE 4-1 FIGURE 4-1 Classifying marketing decisions according to ethical and legal relationships

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-9 FIGURE 4-2 FIGURE 4-2 A framework for understanding ethical behavior

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin UNDERSTANDING ETHICAL MARKETING BEHAVIOR Slide 4-10 Societal Culture and Norms  Culture

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin MARKETING NEWSNET Slide 4-11 Internet Piracy and Campus Pirates

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin UNDERSTANDING ETHICAL MARKETING BEHAVIOR Slide 4-12 Business Culture and Industry Practices  Business Cultures  Ethics of Exchange Caveat Emptor Caveat Emptor Consumer Bill of Rights Consumer Bill of Rights Federal Trade Commission (FTC)

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-13 Federal Trade Commission Is your online privacy protected?

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin UNDERSTANDING ETHICAL MARKETING BEHAVIOR Slide 4-14 Business Culture and Industry Practices  Ethics of Competition Economic Espionage Economic Espionage Bribes Kickbacks

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin UNDERSTANDING ETHICAL MARKETING BEHAVIOR Slide 4-16 Corporate Culture and Expectations  Corporate Culture Whistle-blowers Whistle-blowers  Code of Ethics Code of Ethics  Ethical Behavior of Top Management and Co-workers

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin UNDERSTANDING ETHICAL MARKETING BEHAVIOR Slide 4-18  Moral Idealism Moral Idealism  Utilitarianism Utilitarianism Personal Moral Philosophy and Ethical Behavior

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-19 FIGURE 4-A FIGURE 4-A Personal moral philosophies

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING Slide 4-23 Concepts of Social ResponsibilityConcepts of Social Responsibility  Profit Responsibility Green Marketing Green Marketing  Stakeholder Responsibility  Societal Responsibility ISO ISO Cause Marketing Cause Marketing

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-24 FIGURE 4-4 FIGURE 4-4 Three concepts of social responsibility

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING Slide 4-27  Social Audit Social Audit  Sustainable Development Sustainable Development The Social Audit: Doing Well by Doing Good Turning the Table: Consumer Ethics and Social Responsibility

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-46 Ethics Ethics are the moral principles and values that govern the actions and decisions of an individual or group.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-47 Laws Laws are society’s values and standards that are enforceable in the courts.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-48 Caveat Emptor Caveat emptor is the legal concept of “let the buyer beware” that was pervasive in American business culture prior to the 1960s.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-49 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.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-50 Economic Espionage Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-51 Code of Ethics A code of ethics is a formal statement of ethical principles and rules of conduct.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-52 Whistle-blowers Whistle-blowers are employees who report unethical or illegal actions of their employers.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-53 Moral Idealism Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-54 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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-55 Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions. Social Responsibility

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-56 Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products. Green Marketing

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-57 ISO consists of worldwide standards for environmental quality and green marketing practices developed by the International Standards Organization (ISO). ISO 14000

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-58 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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-59 A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility. Social Audit

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 4-60 Sustainable development involves conducting business in a way that protects the natural environment while making economic progress. Sustainable Development