1. Chapter 4 Conscious Marketing, Corporate Social Responsibility, and Ethics

2. Learning Objectives (1 of 2)
Learning Objective 4.1 Define conscious marketing. Learning Objective 4.2 Describe what constitutes marketing’s greater purpose. Learning Objective 4.3 Differentiate between conscious marketing and corporate social responsibility. Learning Objective 4.4 Describe the ways in which conscious marketing helps various stakeholders.
LO4-1 Define conscious marketing.
LO4-2 Describe what constitutes marketing’s greater purpose.
LO4-3 Differentiate between conscious marketing and corporate social responsibility.
LO4-4 Describe the ways in which conscious marketing helps various stakeholders. 
These are the learning objectives guiding the chapter and will be explored in more detail in the following slides.

3. Learning Objectives (2 of 2)
Learning Objective 4.5 Explain how conscious leadership can produce a conscious culture in the firm. Learning Objective 4.6 Describe how ethics constitute an integral part of a firm’s conscious marketing strategy. Learning Objective 4.7 Identify the four steps in ethical decision making. .
LO4-5 Explain how conscious leadership can produce a conscious culture in the firm.
LO4-6 Describe how ethics constitute an integral part of a firm’s conscious marketing strategy.
LO4-7 Identify the four steps in ethical decision making. 
These are the learning objectives guiding the chapter and will be explored in more detail in the following slides.

4. Conscious Marketing Principles
Recognition of marketing’s greater purpose
Consideration of stakeholders and their interdependence.
The presence of conscious leadership, creating a corporate culture.
The understanding that decisions are ethically based.
Conscious marketing entails a sense of purpose for the firm that is higher than simply making a profit by selling products and services.

5. Marketing's Greater Purpose
Corporate Social Responsibility
Ethical Performance
Social Performance
Environmental Performance
Corporate social responsibility describes the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders. These responsibilities are not mandated by any law or regulation but instead are associated with the demands, expectations, requirements, and desires of various stakeholders. For example, one definition describes CSR as context-specific actions and policies, taking stakeholders’ expectations into account, to achieve what is referred to as the triple bottom line: economic, social, and environmental performance.
Ask students Is the BP Gulf Coast ad propaganda or authenticity?
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6. PROGRESS CHECK (1 of 4)
What are the criteria for being a conscious marketer?
Is Walmart a conscious marketer or is it a practitioner of CSR?
Conscious marketers exhibit the following principles: recognition of marketing’s greater purpose, consideration of stakeholders and their interdependence, the presence of conscious leadership, creating a corporate culture, and the understanding that decisions are ethically based.
Walmart has been widely criticized as the worst-paying company in the United States. Yet it also engages in extensive CSR programs across the triple bottom line. It has committed to reducing its carbon footprint (environmental performance), donates more than $1 billion in cash and in-kind items to charitable causes per year (social performance), and still earns strong profits (economic performance). Most students will consider Walmart a practitioner of CSR and not a conscious marketer.

7. The Stakeholders of Conscious Marketing
When companies embrace conscious marketing, they appeal not only to their shareholders but also to all of their key stakeholders including their own employees, consumers, the marketplace, and society at large. The choices they make with regard to what they produce and how, and then how they seek to sell those offerings, take a broad range of elements into consideration.
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8. Employees Basic responsibility:
Ensure a safe working environment free of threats to their physical safety, health, or well-being.
Perhaps the most basic responsibility of a firm is to employees: to ensure a safe working environment free of threats to their physical safety, health, or well-being. In some cases, this basic level of safety seems insufficient to ensure responsibility to workers. For example, more firms today realize that happy employee families make happy and productive employees, so they are offering new benefits and options, such as on-site daycare or flextime arrangements. When REI thought more consciously about its practices, it determined that living up to its higher purpose—that is, helping people enjoy outdoor adventures—meant closing its stores on Thanksgiving and the day after, popularly known as Black Friday. Although closing meant that REI lost some sales, the conscious culture in the firm emphasized that employees should be enjoying time outdoors with their families too.
© Suzi Pratt/Getty Images

9. Customers Current trends Conscious marketing focus Privacy Health
Increases awareness
Leads to better brand equity
Increases sales
Especially as changes in the marketing environment emerge, firms must consider the effects on their current customers as well as future customers they have targeted. Conscious marketing programs must take such shifts and trends into account and react to them quickly. Some trends receiving substantial attention in modern times include respecting and protecting privacy in an electronic world and ensuring the healthiness of products, especially those aimed at children. When conscious marketing takes on such pertinent issues, it often increases consumer awareness of the firm, which can lead to better brand equity and sales in the long run.
© Deshakalyan Chowdhury/Stringer/Getty Images

10. Marketplace
One firm in the industry can lead the way toward conscious marketing. Partners and competitors often have no choice but to follow.
When one firm in the industry leads the way toward conscious marketing, its partners and competitors often have no choice but to follow—or run the risk of not doing business or being left behind. To address issues such as global warming, water scarcity, and energy, GE uses a program it calls ecomagination. Reflecting the company’s higher purpose, ecomagination encompasses a business strategy composed of four commitments: to double investments in clean research and development (R&D), increase revenues from ecomagination products, reduce greenhouse gas emissions, and inform the public about these issues.
Source: General Electric Company

11. Society
A firm that fails to act responsibly causes damage to all the preceding stakeholders as well as to itself. 
Firms expend considerable time and energy engaging in activities aimed at improving the overall community and the physical environment, which suggests their increasing recognition of the importance of a broad range of varied stakeholders. Broader society, a key stakeholder, demands that companies act responsibly, and companies cannot ignore this. A firm that fails to act responsibly causes damage to all the preceding stakeholders as well as to itself.

12. Environment
Sustainability is a special category that combines considerations of all stakeholders.
Adding Value 4.1
Why is Walmart attempting to position itself as the retail industry’s sustainability leader?
A special category that combines considerations of all these stakeholders is sustainability. According to the U.S. Environmental Protection Agency, “Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment.” When marketing is truly sustainable, it can benefit all stakeholders: employees, customers, the marketplace, and society.
Source: Walmart Corporation/Flickr/CC BY 2.0

13. PROGRESS CHECK (2 of 4)
What is the difference between conscious marketing and corporate social responsibility?
Provide a specific example of a conscious marketing firm that considers the needs of each of its stakeholders.
Although CSR is an important element of conscious marketing, it is not the same thing. Becoming a conscious marketing organization is a complex effort, and for some firms, it may prove virtually impossible to achieve.
Examples include elements of employees, customers, the marketplace, and society.

14. Integrating Conscious Marketing
Planning Phase
Implementation Phase
In their constant pursuit of conscious marketing, firms can address relevant questions at each stage of the strategic marketing planning process. Remind students that as marketers, they must ask questions specific to each stage and examine those questions carefully before moving on to the next stage.
Control Phase

15. Planning Phase
The mission or vision statement sets the overall ethical tone for planning. Mission statements can be used as a means to guide a firm’s SWOT analysis.
By incorporating ethics into the firm’s mission statement, the firm sets a standard for its subsequent ethical decision making. The mission statement signals the firm’s strategic priorities.

16. Implementation Phase
Should the firm be relocating production to another country?
Should the firm be targeting this market with this product?
In the implementation phase of the marketing strategy, when firms are identifying potential markets and ways to deliver the four Ps to them, firms must consider several pertinent issues.
Group activity: For each question related to the implementation phase, see if students can think of examples for each of the questions.
Many students will use examples such as tobacco, alcohol, or other controversial product companies. Point out that other products also encounter the same issues, even if the products themselves seem less controversial.
Should the firm be selling its product in this market in this manner?

17. Control Phase Check successful implementation React to change
New technology and markets ensure that new potentially troubling issues continually arise.
Marketers collect data on people’s location
Purchase transactions
Posts on social and media sites (Facebook, Twitter)
Any plan requires constant evaluation and revision, and this truism applies particularly to the evaluation of ethical issues. During the control phase of the strategic marketing planning process, managers must be evaluated on their actions from a conscious marketing perspective. Systems must be in place to check whether each conscious marketing issue raised in the planning process was actually successfully addressed. Systems used in the control phase must also react to change. 
The emergence of new technologies and new markets ensures that new potentially troubling issues continually arise. In particular, people expect to be able to move normally in public spaces without their location being recorded for subsequent use. Yet marketers regularly collect data on people’s location through purchase transactions and posts on social and mobile sites such as Facebook, Twitter, and Flickr.

18. PROGRESS CHECK (3 of 4)
What ethical questions should a marketing manager consider at each stage of the marketing plan?
Answers will vary, may include questions concerning:
Planning – What are the ethical standards of the company?
Implementation – How should the ethical standards be reflected in the marketing strategy?
Control – Check whether each potential ethical issue raised in the planning process was actually successfully addressed.

19. The Link Between Ethics and Corporate Social Responsibility
Although both fall under the conscious marketing umbrella, it is important to distinguish between ethical marketing practices and corporate social responsibility programs. When a firm embraces conscious marketing, it implements programs that are socially responsible, and its employees act in an ethically responsible manner.
Ask students: Can a firm be socially responsible and not ethical, or ethical and not socially responsible? A firm can give money to charity (socially responsible), but be unethical (engage in deceptive advertising).
Ask students: Can you think of a firm that may be either ethical or socially responsible, but not both?
Group activity: Students should create a list of firms reputed to be socially responsible. In what ways do these firms demonstrate their commitment? Do the students consider these factors when purchasing goods?
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20. A Framework for Ethical Decision Making
This concept is broken down in the next slides.
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Step 1: Identify Issues
The first step is to identify the issue. In a marketing research firm, ethical issues might include:
data collection methods—not informing respondents that they are being observed
hiding the true purpose of a study from respondents—telling them they are an independent research company, but actually doing research for a particular politician
using results to mislead or even harm the public—results of a pharmaceutical study.
Ask students: Why would a company do this?
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22. Step 2: Gather Information and Identify Stakeholders
Identify all ethical issues and relevant legal information
In this step, the firm focuses on gathering facts that are important to the ethical issue, including all relevant legal information. To get a complete picture, the firm must identify all the individuals and groups that have a stake in how the issue is resolved.
Ask students: What are the ramifications of publishing misleading research findings for a new pharmaceutical product.
Answer: there could be real harm to users.
Then ask: Why might this happen?
Answer: The pharmaceutical industry wants the product to come to market to meet sales goals. They might be paying the researchers to do the project.
Identify all relevant stakeholders and get their input on any identified ethical issues

23. Step 3: Brainstorm Alternatives
Halt the market research project Make responses anonymous Institute training on the AMA Code of Ethics for all researchers
The alternative solutions depend on the type of ethical issue and how the stakeholders are affected.

24. Step 4: Choose a Course of Action
Weigh the alternatives
Take a course of action
Alternatives are then evaluated and a course of action is chosen. The chosen course represents the best solution for the stakeholders using ethical best practices.

25. Ethical Decision-Making Metric (1 of 2)
Test
Yes
Maybe No 1 2 3 4 5 6 7
The Publicity Test
Would I want to see the action I’m about to take on the front page of the local paper or in a national magazine?
The Moral Mentor Test
Would the person I admire the most engage in this activity?
The Admired Observer Test
Would I want the person I admire most to see me doing this?
To choose the appropriate course of action, marketing managers will evaluate each alternative by using a process something like the sample ethical decision-making metric on the slide The conscious marketer’s task here is to ensure that he or she has applied all relevant decision-making criteria and to assess his or her level of confidence that the decision being made meets those stated criteria. If the marketer isn’t confident about the decision, he or she should reexamine the other alternatives. Using Exhibit 4.6, you can gauge your own ethical response. If your scores tend to be in the “Yes” area (columns 1 and 2), then the situation is not ethically troubling for you. If, in contrast, your scores tend to be in the “No” area (columns 6 and 7), it is ethically troubling, and you know it. If your scores are scattered or are in the “Maybe” area (columns 3, 4, and 5), you need to step back and reflect on how you wish to proceed. In using such an ethical metric or framework, decision makers must consider the relevant ethical issues, evaluate the alternatives, and then choose a course of action that will help them avoid serious ethical lapses.

26. Ethical Decision-Making Metric (2 of 2)
Test
Yes
Maybe No 1 2 3 4 5 6 7
The Transparency Test
Could I give a clear explanation for the action I’m contemplating, including an honest and transparent account of all my motives, that would satisfy a fair and dispassionate moral judge?
The Person in the Mirror Test
Will I be able to look at myself in the mirror and respect the person I see there?
The Golden Rule Test
Would I like to be on the receiving end of this action and all its potential consequences?
To choose the appropriate course of action, marketing managers will evaluate each alternative by using a process something like the sample ethical decision-making metric on the slide The conscious marketer’s task here is to ensure that he or she has applied all relevant decision-making criteria and to assess his or her level of confidence that the decision being made meets those stated criteria. If the marketer isn’t confident about the decision, he or she should reexamine the other alternatives. Using Exhibit 4.6, you can gauge your own ethical response. If your scores tend to be in the “Yes” area (columns 1 and 2), then the situation is not ethically troubling for you. If, in contrast, your scores tend to be in the “No” area (columns 6 and 7), it is ethically troubling, and you know it. If your scores are scattered or are in the “Maybe” area (columns 3, 4, and 5), you need to step back and reflect on how you wish to proceed. In using such an ethical metric or framework, decision makers must consider the relevant ethical issues, evaluate the alternatives, and then choose a course of action that will help them avoid serious ethical lapses.
Source: Adapted from The Art of Achievement: Mastering the 7 Cs of Business and Life. © 2002 by Tom Morris, published by Andrews McMeel Publishing LLC, an Andrews McMeel Universal company, Kansas City, Missouri.

27. PROGRESS CHECK (4 of 4)
Identify the stages in the ethical decision-making framework.
Stages in framework:
Stages 1: Identify Issues
Stages 2: Gather Information and Identify Stakeholders
Stages 3: Brainstorm Alternatives
Stages 4: Choose a Course of Action