Chapter 4Social Responsibility

and Ethics in Marketing

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Objectives

• Understand concept and dimensions of social responsibility

• Define/describe importance of marketing ethics

• Familiarize self with ways to improve ethical decisions in marketing

• Understand role of social responsibility and ethics in improving marketing performance

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The Nature of Social Responsibility

Social responsibility – an organization’s obligation to maximize its positive impact and minimize its negative impact on society

4 | 5Copyright © Houghton Mifflin Company. All rights reserved.

100 BestCorporate Citizens

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Dimensions OfSocial Responsibility

Social Responsibility

Marketing/Corporate Citizenship

Stakeholders

Marketing Ethics

Cause-Related Marketing

Strategic Philanthropy

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Marketing Citizenship

The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders.

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Pyramid OfCorporate Social Responsibility

Source: From Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,” adaptation of Figure 3, p. 42. Reprinted from Business Horizons, July/Aug. 1991.

Copyright © 1991 by the Foundation for the School of Business at Indiana University. Reprinted with permission.

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Marketing Ethics

Principles and standards that define acceptable marketing conduct as determined by various stakeholders.

BBB Code of Advertising

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Cause-Related Marketing

The practice of linking products to a particular social cause on an ongoing or short-term basis.

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Strategic Philanthropy

The synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits.

IBM - Overview | Corporate Community Relations

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Social Responsibility Issues

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Green marketing

The specific development, pricing, promotion, and distribution of products that do not harm the natural environment.

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Europe’s Eco-Label

EUROPA - Environment - Ecolabel - Latest News

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Corporate Goals ForThe Natural Environment

Eliminate concept of waste

Reinvent concept of a product

Make prices reflect the cost

Make environmentalism profitable

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Marketing Ethics

Ethical Issue – An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical.

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Sample Ethical IssuesRelated to the Marketing Mix

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The Nature of Marketing Ethics

• Individual Factors

• Organizational Relationships

• Opportunity

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Factors in Ethical Decision-Making

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Organizational Culture

A set of values, beliefs, goals, norms, and rituals that members of an organization share.

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Types And IncidencesOf Observed Misconduct

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Improving EthicalConduct In Marketing

• Codes of conduct

• Ethics Officers

• Implementing Ethical and Legal Compliance Programs

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Top Management & Ethics

• Talk about importance of ethics

• Inform employees

• Keep promises

• Model ethical behavior

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Reasons For NotReporting Ethical Misconduct

Source: From National Business Ethics Survey, “How Employees View Ethics in Their Organizations 1994-2005,”Ethics Resource Center 2005, p. 29. © Ethics Resource Center, Washington, DC. Reprinted with permission.

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Codes of Conduct

Formalized rules and standards that describe what the company expects of its employees

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Ethics Officers

Create/enforce code

Meet with, discusscode, and adviseorganization members

Toll-free hotlines

Salaries Of Ethics Officers

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Implementing Ethical &Legal Compliance Programs

• Open communication & coaching

• Ethics training

• Clear channels of communication

• Follow-up support

• Enforce standards and impose penalties

• Part of overall marketing strategy

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Audit Of Control Mechanisms

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Challenges Of Ethical andSocially Responsible Behavior

Introduction/adaptation of new products

More user-friendly

Transparency/openness

Management responsibility

Predict long-term effects

Balancing society’s demands

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Social Responsibilityand Ethics Improve Performance

$ Consumers want to buy from company associated with cause

$ Company’s citizenship