ETHICS AND SOCIAL

RESPONSIBILITY IN MARKETING

CHAPTER

NATURE of MARKETING ETHICS

• Ethics –doing the“right” thing

Laws

Ethical vs LegalPersonal & not punishable - Societal and Punishable

UNDERSTANDING ETHICAL BEHAVIOR

1st Influence - Societal Culture and Norms

Culture dictates what is right and wrong, so “right” changes from culture to culture.

2nd Influence - Business Culture & Industry Practices - B to C

• 1962, Kennedy’s Consumer Bill of Rights

•Early 1900s: Caveat Emptor

–A Latin phrase meaning “let the buyer beware” - what you see is what you get, &if it’s not what you expected, too bad

–Belief that competition in the marketplace corrects abuses

Business Culture & Industry Practices - B to B

Ethics of Competition• Economic Espionage – stealing trade secrets

•Includes trespassing, wiretapping, dumpster diving

• Bribes -payment before service

• Kickbacks-payment after service

Both are illegal in U.S., but very common in developing nations

3rd Influence- Corporate Culture & Expectations

Corporate Culture – shown in dress codes, work space, compensation

• Whistle-blowers

Code of EthicsWhat’s in it? (pg 85)

What if its breached?

Personal Moral Philosophy and Ethical Behavior

Moral Idealism There is a right thing to do, no matter what the costFavored by religious &consumer groups

UtilitarianismThe right thing to do is what hurts the fewestFavored by business executives and the military

Concept of Social Responsibility

Profit Responsibility-company’s duty is to maximize profits

• Green Marketing

Stakeholder Responsibility-company’s duty is to protect the interests of the people who gain from it

Societal Responsibility - company’s duty is to preserve

environment while reaping profit

Careful of Profiteering- shrink supply to raise price & profit

FIGURE 4-2FIGURE 4-2 Three concepts of social responsibility

Turning the Table: Consumer Ethics and Social Responsibility

Includes:•Filing warranty claims after the period expire •Fraudulent returns of merchandise•Providing inaccurate credit information•Pirating digital content•Submitting phony insurance claims•Improper disposal of environmentally sensitive material

Costs taxpayers billions each year in higher prices and premiums.

Remember - “Everybody does it” is not an excuse for abuse

Concept Check

2. What are three possible reasons for the present state of ethical conduct in the United States?

A: (1) Pressure on businesspeople to make decisions in a society with diverse value systems. (2) Business decisions being judged publicly by groups with different values and interests. (3) Ethical business conduct may have declined.

Concept Check

1. What rights are included in the Consumer Bill of Rights?

A: The rights to safety, to be informed, to choose, and to be heard.

Concept Check

2. What is meant by moral idealism?

A: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Concept Check

1. What is meant by social responsibility?

A: Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.

Concept Check

2. Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called _____________.green marketing

Concept Check

3. What is a social audit?

A: A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in the domain of social responsibility.

Ethics

Ethics are the moral principles and values that govern the actions and decisions of an individual or group.

Ethics are the moral principles and values that govern the actions and decisions of an individual or group.

Laws

Laws are society’s values and standards that are enforceable in the courts.Laws are society’s values and standards that are enforceable in the courts.

Consumer Bill of Rights (1962)

The Consumer Bill of Rights (1962)is a law that codified (standardized what was not previously written down) the ethics of exchange between buyers and sellers. It includes the buyers rights:

(1) to safety

(2) to be informed

(3) to choose, and (4) to be heard.

The Consumer Bill of Rights (1962)is a law that codified (standardized what was not previously written down) the ethics of exchange between buyers and sellers. It includes the buyers rights:

(1) to safety

(2) to be informed

(3) to choose, and (4) to be heard.

Code of Ethics

A code of ethics is a formal statement of ethical principles and rules of conduct.A code of ethics is a formal statement of ethical principles and rules of conduct.

Whistle-blowers

Whistle-blowers are employees who report unethical or illegal actions of their employers.

Whistle-blowers are employees who report unethical or illegal actions of their employers.

Moral Idealism

Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number,” by assessing the costs and benefits of the consequences of ethical behavior.

Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number,” by assessing the costs and benefits of the consequences of ethical behavior.

Utilitarianism

Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.

Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.

Social Responsibility

Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.

Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.

Green Marketing