Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing Ethics and Social Responsibility

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 3 Objectives 1.Understand that marketing’s contribution to society includes improving the efficiency and effectiveness of the economic process through the creation of exchanges, marketing products, and trading innovations. Explore why marketing is frequently criticized for socially irresponsible behavior.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 3 Objectives 2.Recognize why the self-centered behavior of millions of business and consumers around the world has a detrimental impact on supply and demand. 3.Appreciate the role of personal ethical behavior and learn the major theories of marketing ethics.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 3 Objectives 4.Understand the rules and regulations govern each element of the marketing mix. 5.Understand that marketing has a role in promoting worthy public causes and how cause-related marketing is used to achieve this goal.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 3—Social Responsibility Social Responsibility--Defined The collection of marketing philosophies, policies, procedures and actions intended to enhance society’s welfare.

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s First Social Responsibility Strive to be More Efficient and Effective First responsibility is to advance life, liberty, and the general happiness through the creation of exchanges, markets, product innovations, and trading innovations that increase the efficiency and effectiveness of the economic process Objective 1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s First Social Responsibility Problems with Efficiency and Effectiveness 1.Too many unneeded products are marketed that fail 2.Too many unneeded products are marketed that succeed. Planned obsolescence—creating products that are known to be outdated in the near future. Ex. computer software Objective 1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s First Social Responsibility Problems with Efficiency and Effectiveness 3.Market distribution systems are inefficient 4.A lot of advertising is wasteful expenditure Inefficient targeting Objective 1

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketer’s Self-interested, Unintended Consequences on Supply Tragedy of the Commons –Individual activities of producers can have an accumulative effect that is often not intended and can lead to harmful effects on others or society at large. Objective 2

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketer’s Self-interested, Unintended Consequences on Supply Supply-side Market failure –Individual activities of a supplier inadvertently lead to destructive effects on the overall supply. Objective 2

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketer’s Self-interested, Unintended Consequences on Demand Demand-side Market failure –Cumulative effect of the marketing practices of many thousands of advertising campaigns that has a residual negative impact on the values of buyers and demand for various products. Objective 2

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketer’s Self-interested, Unintended Consequences on Demand Demand-side Market failure –Nationwide poll in 2002 revealed that “unrealistic standards of beauty” was the biggest criticism that customers had of advertising. Objective 2

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Second Social Responsibility Behave Ethically –Conduct business in an ethical manner –Most do live up to this responsibility, however some do not. Objective 3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Second Social Responsibility Personal Codes of Ethics –General terms leave specific interpretation up to the implementation of marketing strategy –American Marketing Association Developed a code of ethics that marketing professionals turn to Objective 3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Second Social Responsibility Theories of Marketing Ethics 1.Morality accepted by all, called a Social Contract 2.Principle of Utility—is that “ethical behavior” is the behavior that produces the most good for the most people in a specific situation. Objective 3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Second Social Responsibility Theories of Marketing Ethics 3.Categorical imperative—would it be right if everyone did it? 4.Situational ethics—right and wrong are determined by the specific situation Objective 3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Second Social Responsibility Personal Ethical Choices –Ethical vigilance—asking yourself the “hard questions” Objective 3

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Third Social Responsibility Obey the Law –Political and legal forces impact the marketing environment to which the marketer must adapt. Objective 4

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Fourth Social Responsibility Help Market Good Causes –Encourage its use in the promotion of worthy public causes –Cause-Related Marketing Objective 5

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Fourth Social Responsibility Cause-Related Marketing –Includes those activities that governments, public service organization, companies, and individuals undertake in an effort to encourage target customer participation in socially redeeming programs Objective 5

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved. Marketing’s Fourth Social Responsibility Cause-Related Marketing –Usually delivered through educational campaigns and provide free or low-priced services at convenient times and places. Objective 5