CHAPTER

ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING

NATURE of MARKETING ETHICS Ethics doing theright thing Ethical

 Laws

vs

Legal

Personal & 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 Early 1900s: Caveat Emptor
A Latin phrase meaning let the buyer beware - what you see is what you get, &if its not what you expected, too bad Belief that competition in the marketplace corrects abuses

1962, Kennedys Consumer Bill of Rights

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  Code of Ethics Whats in it? (pg 85) What if its breached?
Whistle-blowers

Personal Moral Philosophy and Ethical Behavior

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

 Utilitarianism
The right thing to do is what hurts the fewest Favored by business executives and the military

Concept of Social Responsibility

 Profit Responsibility-companys duty is to maximize profits
Careful of Profiteering- shrink supply to raise price & profit

 Stakeholder Responsibility-companys duty is to protect

the interests of the people who gain from it

 Societal Responsibility - companys duty is to preserve

environment while reaping profit Green Marketing

FIGURE 4-2 Three concepts of social 4responsibility

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 green marketing are called _____________.

Concept Check

3. What is a social audit? A: A social audit is a systematic assessment of a firms 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.

Laws

Laws are societys 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.

Code of Ethics

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.

Moral Idealism

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

Utilitarianism

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.

Social Responsibility

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

Green Marketing

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