Marketing and Society: Social Responsibility and Marketing Ethics 1

11-2 Professor Takada ROAD MAP: Previewing the Concepts The major social criticisms of marketing. The major social criticisms of marketing. Consumerism and environmentalism: Consumerism and environmentalism: –How they affect marketing strategies? The principles of socially responsible marketing. The principles of socially responsible marketing. The role of ethics in marketing. The role of ethics in marketing.

11-3 Professor Takada Criticisms of Marketing High Prices Deceptive Practices High-Pressure Selling Shoddy or Unsafe Products Planned Obsolescence Poor Service to Disadvantaged Consumers

11-4 Professor Takada High Prices Caused by: High Costs of Distribution High Advertising and Promotion Costs Excessive Markups

11-5 Professor Takada High Costs A heavily promoted brand of aspirin sells for much more than a virtually identical non-branded or store-branded product. Critics charge that promotion adds only psychological value to the product rather than functional value.

11-6 Professor Takada Social Responsibility Click the picture above to play video Honest Tea offers customers, in addition to tea, a relationship with a community.

11-7 Professor Takada Deceptive Practices Deceptive Pricing: Deceptive Pricing: –Falsely advertising “factory” or “wholesale” prices or large reductions from phony high retail list prices. Deceptive Promotion: Deceptive Promotion: –Overstating a product’s features or performance, running rigged contests. Deceptive Packaging: Deceptive Packaging: –Exaggerating package contents through subtle design, using misleading labeling, etc.

11-8 Professor Takada High-Pressure Selling Salespeople are trained to deliver smooth, canned talks to entice purchase. Salespeople are trained to deliver smooth, canned talks to entice purchase. Hard sales can occur because of prizes going to top sellers. Hard sales can occur because of prizes going to top sellers. High-pressure selling not good for long- term relationships. High-pressure selling not good for long- term relationships.

11-9 Professor Takada Shoddy or Unsafe Products Products not made well or service not performed well. Products not made well or service not performed well. Products deliver little benefit or can be harmful. Products deliver little benefit or can be harmful. Unsafe products due to manufacturer indifference, increased production complexity, poorly trained labor, and poor quality control. Unsafe products due to manufacturer indifference, increased production complexity, poorly trained labor, and poor quality control.

11-10 Professor Takada Product Safety Following its recall of 6.5 million flawed Firestone tires, product liability and safety concerns have driven Bridgestone/ Firestone to the brink of bankruptcy.

11-11 Professor Takada Planned Obsolescence Products needing replacement before they should be obsolete. Products needing replacement before they should be obsolete. Producers change consumer concepts of acceptable styles. Producers change consumer concepts of acceptable styles. Intentionally holding back attractive functional features, then introducing them later to make old model obsolete. Intentionally holding back attractive functional features, then introducing them later to make old model obsolete.

11-12 Professor Takada Poor Service to Disadvantaged Consumers Poor may pay more for inferior goods. Poor may pay more for inferior goods. “Redlining” may occur in disadvantaged neighborhoods. “Redlining” may occur in disadvantaged neighborhoods. Higher insurance premiums to people with poor credit ratings. Higher insurance premiums to people with poor credit ratings. “Weblining” can occur. “Weblining” can occur.

11-13 Professor Takada Marketing’s Impact on Society as a Whole False Wants & Too Much Materialism (i.e., what you own vs. who you are ). Too Much Political Power Producing Too Few Social Goods Cultural Pollution

11-14 Professor Takada Cultural Pollution Our senses are sometimes assaulted by commercial messages.

11-15 Professor Takada Marketing’s Impact on Other Businesses Acquisitions of Competitors Marketing Practices That Create Barriers to Entry Unfair Competitive Marketing Practices

11-16 Professor Takada Consumerism Consumerism is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers. Consumerism is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.

11-17 Professor Takada Consumerism: Sellers’ Rights The right to introduce any product in any size and style, provided it is not hazardous to personal health or safety; or, if it is, to include proper warnings and controls. The right to charge any price for the product, provided no discrimination exists among similar kinds of buyers. The right to spend any amount to promote the product, provided it is not defined as unfair competition. The right to use any product message, provided it is not misleading or dishonest in content or execution. The right to use any buying incentive schemes, provided they are not unfair or misleading.

11-18 Professor Takada Consumerism: Buyers’ Rights The right not to buy a product that is 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 well informed about important aspects of the product. The right to influence products and marketing practices in ways that will improve “quality of life.” The right to be protected against questionable products and marketing practices.

11-19 Professor Takada Environmentalism An organized movement of concerned citizens and government agencies to protect and improve people’s living environment. An organized movement of concerned citizens and government agencies to protect and improve people’s living environment.

11-20 Professor Takada Environmental Sustainability A management approach that involves developing strategies that both sustain the environment and produce profits for the company. A management approach that involves developing strategies that both sustain the environment and produce profits for the company.

11-21 Professor Takada Environmental Sustainability Grid

11-22 Professor Takada Legal Issues Facing Marketing Mgmt.

11-23 Professor Takada Enlightened Marketing A marketing philosophy holding that a company’s marketing should support the best long-run performance of the marketing system. A marketing philosophy holding that a company’s marketing should support the best long-run performance of the marketing system.

11-24 Professor Takada Enlightened Marketing Consumer-Oriented Marketing: Consumer-Oriented Marketing: –The philosophy of enlightened marketing that holds that the company should view and organize its marketing activities from the consumer’s point of view. Innovative Marketing: Innovative Marketing: –A principle of enlightened marketing that requires that a company seek real product and marketing improvements.

11-25 Professor Takada Innovative Marketing Colgate’s Total toothpaste is perhaps the best example of Colgate's passion for innovation. The breakout brand provides a combination of benefits, including cavity prevention, tartar control, fresh breath, and long-lasting effects.

11-26 Professor Takada Enlightened Marketing Value Marketing: Value Marketing: –A principle of enlightened marketing that holds that a company should put most of its resources into value-building marketing investments. Sense-of-Mission Marketing: Sense-of-Mission Marketing: –A principle of enlightened marketing that holds that a company should define its mission in broad social terms rather than narrow product terms. –Click Here to View Ben & Jerry's Mission Statement Click Here to View Ben & Jerry's Mission StatementClick Here to View Ben & Jerry's Mission Statement

11-27 Professor Takada Societal Classification of Products

11-28 Professor Takada Marketing Ethics Corporate Marketing Ethics Policies: Corporate Marketing Ethics Policies: –Broad guidelines that everyone in the organization must follow. These should cover: These should cover: –Distributor relations –Advertising standards –Customer service –Pricing –Product development –General ethical standards

11-29 Professor Takada Marketing Ethics What principle should guide companies and marketing managers on issues of ethics and social responsibility? What principle should guide companies and marketing managers on issues of ethics and social responsibility? Free market and legal system Responsibility falls to individual companies and managers Click Here to See: "Malden Mills: A Study in Leadership"

11-30 Professor Takada Ethics Programs PricewaterhouseCoopers established a comprehensive ethics program, which begins with a code of conduct called “The Way We Do Business.” Says PwC’s CEO, “Ethics is in everything we say and do.”

11-31 Professor Takada Rest Stop: Reviewing the Concepts 1. Identify the major social criticisms of marketing. 2. Define consumerism and environmentalism and explain how they affect marketing strategies. 3. Describe the principles of socially responsible marketing. 4. Explain the role of ethics in marketing.