Marketing and Society: Social Responsibility and Marketing Ethics Chapter 16 Marketing and Society: Social Responsibility and Marketing Ethics

Road Map: Previewing the Concepts Identify the major social criticisms of marketing. Define consumerism and environmentalism and explain how they affect marketing strategies. Describe the principles of socially responsible marketing. Explain the role of ethics in marketing.

Marketing’s Impact on Individual Consumers High Prices Deceptive Practices High-Pressure Selling Criticisms Leveled at the Marketing Function by Consumers, and Others Shoddy, Unsafe Products Planned Obsolescence Poor Service to Some

Marketing’s Impact on Individual Consumers: High Prices High Prices Caused by the Following Factors High Costs of Distribution High Advertising and Promotion Costs Excessive Markups

Marketing’s Impact on Individual Consumers: Deceptive Practices Pricing Falsely Advertising “Factory” or “Wholesale” Prices, Large Reduction From Phony High List Price Deceptive Promotion Overstating the Product’s Features, Luring Customers to the Store for Out-of-Stock Bargains, etc. Deceptive Packaging Exaggerating Package Contents, Not Filling Package to the Top, Using Misleading Labeling

Marketing’s Impact on Individual Consumers High-Pressure Selling Some products – such as cars and jewelry – are said to be sold, not bought. Such tactics damage marketer’s long-run relationship with customers. Shoddy or Unsafe Products Complaint that many products are not made well. Second, many products deliver little benefit. Third, concerns product safety.

American Association of Advertising Agencies This ad demonstrates that advertising can’t make consumers buy things that they don’t need despite high-pressure selling.

Marketing’s Impact on Individual Consumers Planned Obsolescence Change consumer concepts of acceptable styles. Hold back attractive functional features. May break, wear, rust, or rot sooner than should. Poor Service to Disadvantaged Consumers May pay more for inferior goods. “Redlining” may occur where major chain retailers avoid placing stores in disadvantaged neighborhoods.

Marketing’s Impact on Society as a Whole False Wants & Too Much Materialism Producing Too Few Social Goods Marketing’s Perceived Negative Impact on Society as a Whole Cultural Pollution Too Much Political Power

Marketing’s Impact on Other Businesses Acquisitions of Competitors Marketing Practices Create Barriers to Entry Unfair Competitive Marketing Practices All Can Harm Other Companies & Reduce Competition

Consumerism Consumerism is an Organized Movement of Citizens and Government Agencies to Improve the Rights and Power of Buyers in Relation to Sellers. Buyers’ Rights Sellers’

Consumerism – Buyers’ Rights The Right Not to Buy a Product Offered for Sale The Right to Expect the Product to be Safe The Right to Expect the Product to Perform as Claimed The Right to Be Protected Against Questionable Products The Right to Be Heard About “Quality of Life” Issues The Right to Be Well Informed About the Product

Environmentalism Have a Practice Sustainability Pollution Vision Prevention Plan for New Environmental Technologies Practice Product Stewardship Adopt Design for the Environment Practices

Major Legal Issues Facing Marketing Management (Fig. 16-2)

Enlightened Marketing Consumer-Oriented Marketing Holds That a Company’s Marketing Should Support the Best Long-Run Performance of the Marketing System. Innovative Marketing Value Marketing Sense-of-Mission Marketing Societal Marketing

Societal Classification of Products (Fig. 16-3)

Discussion Question Compare the marketing concept with the principle of societal marketing. Should all marketers adopt the societal marketing concept? Why or why not? The marketing concept can be expressed as "find a need and fill it, at a profit." The societal marketing concept is more elaborate: "find a need and fill it, at a profit, taking into account the consumer's and society's long-run interests." On the surface, the societal marketing concept appears so reasonable that every company should immediately adopt it. Yet, there are both philosophical and pragmatic objections to this concept. The philosophical objection is that this practice has businesspeople substituting their perceptions of what is in the social good, for consumers' perceptions or the views of elected policymaking officials. The pragmatic objection is that marketing managers have no special expertise in defining and acting in the public interest. Marketers may not foresee the unintended consequences of their "socially responsible" actions. For example, when a cereal manufacturer reduces a product's sugar content to save children's teeth, the result may be a substitution of even sweeter and less nutritious breakfast products rather than a reduction in cavities. Unfortunately, like most matters of social responsibility in marketing, this question is not as clear-cut as arguments suggest. Are marketers supposed to ignore consumers' and society's long-run interests? Even if consumers are willing to ignore product hazards, is it moral to sell the products to them? Is the correct philosophy “give ‘em what they want” or “let the buyer beware?”

Marketing Ethics Companies Need to Develop Corporate Marketing Ethics Policies – Broad Guidelines That Everyone in the Organization Must Follow and Should Address: Distributor Relations Advertising Standards Customer Service Pricing Product Development General Ethical Standards

Marketing Ethics Principles That Should Guide Companies and Marketing Managers On Issues of Ethics and Social Responsibility: Decided by the Free Market and Legal System Responsibility of Individual Companies And Managers

Interactive Student Assignments Form students into groups of three to five. Each group should focus on the following scenario. You are the marketing manager for a small kitchen appliance firm. While conducting field tests, you discover a design flaw in one of your popular appliances that could potentially be harmful to a small number of your customers. However, a product recall would likely bankrupt your company and cause all of the employees (including yourself) to lose their jobs. What would you do? Explain. Students will find this question a difficult task. Most instructors prefer to divide the students into groups, make the assignment and then discuss the answers in class. The unusual fact about this question is the number of students who will recommend doing nothing or covering up. The question is presented in a difficult way just to demonstrate this fact. As indicated in the chapter (and as a general philosophy in this textbook), there is always a right answer--even if the answer is very difficult. Is saving a life worth a bankruptcy? What is the small number of consumers harmed were unsuspecting children or disabled seniors? Or what is the potential harm was only to those who did not carefully read operating instructions or were left-handed? Would this make the decision less difficult than with the case of children or seniors? Is degree often used as an excuse? Probably so. Only the student and their personal moral and ethical values can answer that question. For additional thought situations see Table 16-1 and Table 16-2.

Rest Stop: Reviewing the Concepts Identify the major social criticisms of marketing. Define consumerism and environmentalism and explain how they affect marketing strategies. Describe the principles of socially responsible marketing. Explain the role of ethics in marketing.