ST 520 Responsible
Management
Session 8
CSR, marketing
and consumers
1
Ethical
marketing
– the 4 P's
Agenda
Other
marketing
topics
Product
Green marketing
Societal marketing
BOP marketing
Price
Cause-related
marketing
Consumer
rights
Place
Promotion
Advertising
2
Product issues

Utility

Health, safety, green marketing

Liability

Planned obsolescence

Eco-conception
3
Product issues
Utility




Is it needed?
Will it improve people's lives?
Does it provide lasting benefits to society?
Traditionally, the real marketing question is…
4
Product issues
Utility

Is it needed?

Is the product effective: will it do what
it says it does?

Is "the promise" true?

Orgamism Inc. article: an indictment of
big pharma
5
Product issues
Utility - content


Is what's in the
package…in the package?
The Kellogg's Corn Flakes
surprise discovery
6
Product issues
Safety

Is the product appropriate?

Is it adapted to the culture?

Ex: Nestle's infant formula



African disaster
Baby milk action group, UK
"… one of the world’s most widely
criticized and boycotted companies."
7
Product issues
Safety



Does it have the potential to harm
people…or the environment?
Should companies market products
that are potentially dangerous?
Or that send mixed messages in
terms of values (utility)?
8
Product issues
Safety

Does product content or use have the potential to harm ?

Diageo's drink responsibly Drink IQ test

What is responsible drinking?

Is it the company's role to promote it? Pro's and cons'
9
Product issues
Safety
"Cigarettes are legal and no one
forces people to smoke"
- Tobacco multinational spokesperson, late 1990s


Should tobacco companies be allowed to aggressively
market cigarettes in Asian and third world countries when
legislation and special interest group pressure in their
countries makes it more difficult to sell in their own
countries?
Do you see any other social responsibility issues regarding
the sale of cigarettes?
10
"If a business is managing products which
pose health risks, it is all the more
important that it does so responsibly"
BAT sustainability page
11
Product issues
Health

Are GMOs dangerous?




U.S. vs. Europe
The case for and against
Processed foods: weight,
link to cancer?
Fast food nation
12
Green marketing

AMA: the marketing of products which are considered safe.

Involves changes in




product modification
process technology
packaging
promotion

Lack of standards and consensus as to what constitutes
"green"  slow growth of green products

In the U.S., according to market researcher Mintel


12% are TRUE GREENS – regularly seek out and buy green products
68% are LIGHT GREENS - buy green sometimes
13
Green marketing
Some U.S. figures
14
Product issues
Liability

Legal responsibility for damage caused by
a product - consumers or manufacturers

"Caveat emptor" - buyer be aware

Warranties
15
Product issues
Consumer rights
Consumer
Consumer
•Buyer beware
•Entitled to respect
•Means to an end
•Right to know
•An end in themselves
16
Product issues
Protecting the consumer

Government regulations & watchdog organizations

Consumer rights







To safety
To choose
To know, to have complete information
To be heard, to complain
To full value: get what you pay for, products perform
as advertised
To recourse and redress
17
To privacy
Product issues
Liability and consumer rights


McDonald's hot coffee
case
Who is liable?
18
Product issues
Planned obsolescence


Planned short life cycle
inciting consumers to
replace product
Some mobile phone
operators offer incentives
to KEEP phones longer.
19
Product issues
Eco-friendly products

Examples:



Puma's clever little bag
Waterless car wash products
Yours'?

Eco-conception

Breaking cyclic capitalism:
take-make-waste
20
Societal marketing




Marketing which aligns consumer satisfaction, company
profits, and society's long-term welfare.
Suggests that focusing only on an exchange relationship
with customers is probably not enough to sustain long
term success.
A marketing strategy should deliver value to customers in
a way that improves both consumer's and society's
welfare.
SM activities improve companies' image among
customers, shareholders, the financial community, and
other relevant publics.
21
Societal marketing
Two examples

Micro-credit

Responsible tourism
22
Societal marketing
Marketing financial services to the poor

Micro-financing: The Grameen Bank

What is micro-credit? Pro's and con's

Questions at end of case
23
Societal marketing
Responsible tourism

Some responsible tourism behaviors








Buy local products
Be aware of religious and social customs
Pay a fair price
Take an interest local culture
Learn a few key words in local language
Dress and behave respectively
Limit environmental impact (water, carbon)
…

Responsibletravel.com

What is responsible tourism? (video)
24
Pricing issues

Price fixing: a secret agreement between
sellers or suppliers



Exploits and misleads consumers who have less
power and information
Illegal in the EU and the USA
What is a fair price, given operating costs?
25
Fair pricing
Fair trade vs. BOP
FAIR TRADE
BOTTOM OF THE PYRAMID
Focus: limited number of suppliers
in developing countries
Focus: maximum number of
customers in developing countries
Objective: local development
Objective: market share
Fair price
Low price
26
Fair pricing scenario



A developing country has discovered some valuable
mineral reserves and is interested in selling exploration
rights to its minerals.
This is the country's first international venture in
mineral, and you may be able to negotiate a belowmarket price for its minerals. In all likelihood, your
agreement will become the industry pattern for other
MNC negotiations.
What will you do?
27
Place – distribution

Rights conflict of:



Change




traditional small retailers to exist
consumers to a low-priced product
Potential disruption of traditional distribution patterns
Toys 'R Us Japan example.
Bribery: payoff required to enter a market?
Transportation and logistics of distribution
network
28
Promotion
Ethical issues in advertising

Content



Shocking, controversial, indecent
People as objects
Intrusive advertising


telemarketing and junk mail that invade
personal privacy.
Ex: selling advertising lists without customer
approval.
29
Controversial content



Benneton ad using dead
Bosnian soldier's clothes
Message?
Ethical issues
"The photo of a bloody tee-shirt and pair of pants belonging to a young
Bosnian soldier killed in battle really hurts. In a real battle, people were
more professional - a bullet in the head was enough. I'm not trying to
say that you wouldn't have found this kind of thing in a mass grave, but
using a military uniform to advertise a product is like a bad war movie.
Benetton, you're wrong here! " - Former Bosnian soldier
30
Source: Google – Benneton pub
31
Promotion
Ethical issues in advertising

Psychological-appeal based
advertising:



Reinforcement of stereotypes



Promising experiences which cannot be delivered
Ex: ideals of masculine or feminine behavior
Use of children, women, and minorities in
advertising.
Roles and life styles presented
Manipulative and coercive advertising


Advertising to vulnerable consumers.
Ex: targeting children, use of subliminal
messages
32
Promotion
Ethical issues in advertising

Concealment of facts from independent surveys

Deception



Claims that are misleading, false, or not easily understood
Not necessarily harmful if consumers are aware of the practice.
Exaggeration


Claims that cannot be supported with evidence
Ex: "low-calorie bread will lead to loss of weight" (how?)
33
Promotion
Targeting children in advertising

Access to internet  monitoring issue.

Children's vulnerability and inability



To
To
To
To
evaluate accuracy of information
distinguish between games and data collection
understand the potential dangers of interacting with strangers
resist pressure to buy and make decisions w/o parents

Exposure to questionable content and terminology

One-to-one marketing and manipulation

Ambiguous frontier between learning, entertainment, and
advertising
34
Promotion
Women in advertising

Emphasis on physical beauty and youth

Stereotype – women depicted:



As weak, mindless, submissive, helpless
As moms cleaning or taking care of children.
As permanently beautiful and slim sex objects,
not autonomous, rational people.
35
Dove soap ads counter-attack
36
Cause-related marketing

A mutually beneficial collaboration between a corporation and (often) a
non-profit organization in which their respective assets are combined to:




create economic and social value
connect with a range of stakeholders - consumers, employees, or suppliers
communicate the shared values of both organizations.
American Express preservation initiatives



Pioneers in "cause-related marketing" in 1983 campaign to raise money for the
Statue of Liberty’s restoration.
Donated one cent to the restoration every time someone used its charge card.
Number of new cardholders grew by 45 %, and card usage increased by 28 %.
37
Avon



The Avon foundation organizes
walks to raise funds to fight
breast cancer (video).
Also campaigns against domestic
violence.
What does this have to do with
marketing?
38
Body Shop campaigns

Against



sex trafficking of children
domestic violence
Finding a cure for HIV
39
Tooting your own horn
Self-promotion of responsible behavior

Is it right for an organization to draw attention to
its moral conduct?

NO, if the advertising…

… costs more than the action itself  Example Philip
Morris' "People Campaign": ads ($108 mn.) cost more
than donations ($60 mn.) to charity organizations.
Source Adbusters 2001

of moral conduct is perceived as a means to reaching
an end of lesser value (profits)
…
40