1. Chapter 4 Conscious Marketing, Corporate Social Responsibility, and Ethics
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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.
Adding Value 4.1 Philanthropy with a Dash of Style: The Elbi–David Yurman Partnership discusses the partnership between luxury jeweler David Yurman and the charitable app Elbi, which was founded by a model who appears in some of David Yurman’s marketing campaigns.

5. Marketing's Greater Purpose
Corporate Social Responsibility as an Element of Conscious Marketing:
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.
©Jae C. Hong/AP Images

6. Exhibit 4.1 Sampling of Major Companies’ CSR Programs
Company
Illustration of CSR Program
Amazon.com
Developed nonprofit Simple Pay Donation system to help nonprofits raise
money easily
BMW
Light Up Hope and BMW Children’s Safety programs
Coca-Cola
Spent $102 million through The Coca-Cola Campaign focusing on water
stewardship, healthy and active lifestyles, community recycling, and education
FedEx
Transported more than 67 planes’ worth of aid to disaster victims
General Electric
Ecomagination campaign, GE Volunteers Foundation
Google
Google.org funds for pro-profit entrepreneurship in Africa, Google China
Social Innovation Cup for College Students
McDonald’s
99 percent of fish come from MSC-fisheries, transitioning to sustainable food
and packaging sources, Ronald McDonald House charities
Procter & Gamble
Live, Learn, and Thrive improves the lives of children worldwide
Southwest Airlines
Employees donate volunteer hours to Ronald McDonald Houses throughout
the United States
Starbucks
Develops ecologically friendly growing practices, LEED certified stores
Today, virtually all large and well-known companies engage in some form of CSR. The available initiatives are vast in their spread, from establishing charitable foundations to supporting and associating with existing nonprofit groups to supporting the rights of minority groups to adopting responsible marketing, sales, and production practices. Exhibit 4.1 provides several illustrations of the CSR programs undertaken by major firms.
Source: Adapted from

7. Corporate Social Responsibility
Exhibit 4.2: How Conscious Marketing Differs from Corporate Social Responsibility
Corporate Social Responsibility
Conscious Marketing
Independent of corporate purpose or culture                       
Incorporates higher purpose and a caring culture      
Reflects a mechanistic view of business
Takes a holistic, ecosystem view of business as a complex adaptive system                
Often grafted onto traditional business model, usually as a separate department or part of PR                                                
Social responsibility is at the core of the business through the higher purpose and viewing the community and the environment as stakeholders             
Sees limited overlap between the business and society, and between business and the planet
Recognizes that business is a subset of society, and that society is a subset of the planet
Although CSR is an important element of conscious marketing, it is not the same thing. Companies might engage in CSR in an effort to mitigate the damage that their products cause, such as when cigarette companies sponsor public information campaigns or oil companies plant trees to balance out their carbon footprint. Thus, though conscious marketing and CSR have some clear connections, they also differ in critical ways.
Ask students: Are the differences between conscious marketing and CSR meaningful to consumers?

8. 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.

9. Exhibit 4.3: 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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10. Marketing Analytics 4.1: How Kellogg’s Uses Analytics to Address GMO Concerns
Kellogg’s Kashi brand was criticized on social media for containing genetically modified organisms (GMOs). Kellogg’s made social media a focal point in the brand’s overhaul. Successful “#KravetheSmiler” campaign gave Kellogg’s new insights and data.
Kellogg’s recently suffered its first sales and profit decreases in decades. Using advanced analytics, Kellogg’s realized that one of its brands was getting creamed on social media: Reports showed that Kashi, which Kellogg’s has promoted as an all-natural option, contained genetically modified organisms (GMOs). Consumers were furious, and they made their opinions clear on various social media.
In response, Kellogg’s undertook a complete overhaul in an attempt to redefine its brands’ core purpose. It consolidated its 42 separate company websites into a single umbrella site. And it made social media a focal point in its brand overhaul. To encourage trial of its Krave cereal, it released the hashtag “#KravetheSmiler,” then awarded prizes to customers who used the hashtag. Throughout the campaign, Kellogg’s constantly gathered data, including daily summaries of tweets that featured the hashtag, the daily top tweeters, how many tweets per hour they received, and so forth.
The well-planned campaign worked: Kellogg’s received more than 35,000 tweets about Krave cereal. Using specially designed algorithms, Kellogg’s could quickly and effectively comb through all the data and award prizes fairly and effectively. Although the campaign improved customer relations, the more important result might have been the way it provided Kellogg’s with new insights and data. With this information, Kellogg’s is likely to be able to replicate this success in other social media campaigns.
©studiomode/Alamy Stock Photo

11. 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

12. Current and Potential Customers
Act quickly to shifts and trends to meet customer needs.
Conscious marketing focus:
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

13. 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.

14. 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, a lesson Patagonia learned well, as described in Adding Value 4.2 Are Growth and Conscious Marketing Contradictory? The Challenge for Patagonia.

15. Environment
Sustainability is a special category that combines considerations of all stakeholders.
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.

16. 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.

17. Integrating Conscious Marketing Throughout the Firm: Leadership and Culture
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

18. Planning Phase
The mission or vision statements set the overall tone for Conscious Marketing.
With strong leadership, marketers can introduce conscious marketing at the beginning of the planning process by including statements in the firm’s mission or vision statements. Google’s well-known code is simple in its phrasing, “Do the right thing,” but often complex in its application, as Ethical & Societal Dilemma 4.1 explains. The search engine has taken a new step and banned advertising by payday loan companies from its sponsored search results. Although the companies still might appear in the list of organic results, they will no longer appear in the prized positions at the top and side of the page.
©jackie ellis/Alamy Stock Photo

19. Conscious Leadership: Newman’s Own Donating over $400 million since 1982
This is a good opportunity to discuss Newman’s Own Organics, an example given in the textbook.
Profits from Newman’s Own—more than $430 million since 1982—have been donated to thousands of charities, especially Newman’s Hole in the Wall Gang camps for children with life-threatening diseases. The unique mission of the company and the entrepreneurial flair of the founders, along with their conscious leadership, made this nonprofit a smashing, ongoing success. 
©Newman’s Own, Inc.

20. Control Phase
Check successful implementation: were the conscious marketing issues successfully addressed?
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 mobile 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 and Twitter.

21. 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.

22. Marketing Ethics as a Conscious Marketing Principle
It is often difficult to balance the needs and preferences of various stakeholders.
Marketing ethics is an integral component of a conscious marketing initiative.
When a firm embraces conscious marketing, it implements programs that are socially responsible, and its employees act in an ethically responsible manner.
The nature of ethical and unethical marketing decisions

23. Exhibit 4.4: Ethics vs. 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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24. Exhibit 4.5: A Framework for Ethical Decision Making
This concept is broken down in the next slides.
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25. Step 1: Identify Issues Using a Marketing Research Firm as an Example
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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26. 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.

27. Step 3: Brainstorm and Evaluate Alternatives
All relevant parties should come together to brainstorm any alternative courses of action.
The company leaders and managers review and refine the alternatives, leading to the final step.
Example using a marketing research firm:
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.

28. Step 4: Choose a Course of Action
Weigh the alternatives
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.
Take a course of action

29. Exhibit 4.6: 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 this 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 (and in Exhibit 4.6). 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.

30. 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 (and in Exhibit 4.6). 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, Andrews McMeel Publishing LLC, 2002.

31. 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

32. Marketing Chapter 4
The End