12 MARKETING STRATEGY O.C. FERRELL • MICHAEL D. HARTLINE Marketing Ethics and Social Responsibility

The Role of Ethics and Social Responsibility in Marketing Strategy Dimensions of Social Responsibility Social responsibility Marketing ethics Marketing Ethics and Strategy The Challenges of Being Ethical and Socially Responsible

Marketing Strategy in Action R.J. Reynolds has been accused by critics of using its “Joe Camel” cartoon character, as shown in this 1988 ad, to target children for cigarette consumption. How has society acted to protect children from advertising such as this? What obligations do companies have to protect children?

The Pyramid of Social Responsibility Exhibit 12.1

Potential Ethical Issues in Marketing Exhibit 12.2

Perceived Values in the Workplace Exhibit 12.3

Discussion Question Why is marketing ethics a strategic consideration in organizational decisions? Who is most important in managing marketing ethics: the individual or the firm’s leadership? Explain your answer.

Deceptive Practices in Marketing Deceptive Communication and Promotion False/deceptive statements Exaggerated claims Ambiguous statements Product labeling issues Fraud Regulating Deceptive Marketing Practices Trade associations Better Business Bureau (BBB)

Better Business Bureau

Organizational Determinants of Marketing Ethics and Social Responsibility (1 of 2) Ethical Climate Codes of Conduct Six highly desirable core values: 1) Trustworthiness 2) Respect 3) Responsibility 4) Fairness 5) Caring 6) Citizenship

Key Considerations in Developing and Implementing a Code of Ethical Conduct Exhibit 12.4

Texas Instruments

Discussion Question Why are we seeing more evidence of widespread ethical marketing dilemmas within firms today? Is it necessary to gain the cooperation of marketing managers to overstate revenue and earnings in a corporation?

Organizational Determinants of Marketing Ethics and Social Responsibility (2 of 2) Marketing Ethics and Leadership Great leaders: 1) Create a common goal or vision 2) Obtain “buy in” 3) Motivate others to be ethical 4) Use available resources 5) Enjoy their jobs Ethics training can ensure that everyone: 1) Recognizes ethical decision making situations 2) Understands the culture and values of the firm 3) Is able to evaluate the impact of ethical decisions

Ethics, Social Responsibility, and Marketing Performance Firms that are ethical and socially responsible are rewarded with greater marketing performance. Having a strong ethical climate: Increases employee commitment Is conducive to a strong market orientation Creates trust among a firm’s stakeholders Increases customer loyalty

Discussion Question What is the relationship between marketing ethics and organizational performance? What are the elements of a strong compliance program to support responsible marketing and a successful marketing strategy?

Incorporating Ethics and Social Responsibility Into Strategic Planning AMA Code of Ethics Federal Sentencing Guidelines for Organizations (FSGO) Marketing strategy and implementation plans should reflect an understanding of: 1) The ethical and social consequences of strategic choices 2) The values of organizational members and stakeholders

AMA Code of Ethics for the Internet Exhibit 12.6

Frequency of Misconduct and Penalties Under the FSGO Exhibit 12.7