Marketing Ethics and
Social Responsibility
Dr. Ananda Sabil Hussein
3-1
The Role of Ethics and Social
Responsibility in Marketing Strategy
 Grown in importance recently
 Due to firms having problems in this area
 Have become necessities due to:
 Stakeholder demands
 Changes in Federal law
 Improve marketing performance and profits
 Are important to development of marketing
strategy
3-2
Dimensions of
Social Responsibility
 Social Responsibility
 A broad concept that relates to an organization’s obligation to
maximize its positive impacts on society while minimizing its
negative impacts
 Marketing Ethics
 Principles and standards that define acceptable marketing conduct as
determined by the public, government regulators, private interest
groups, competitors, and the firm itself
3-3
The Pyramid of
Corporate Social Responsibility
3-4 3.1
Exhibit
Social Responsibility
 Includes:
 Economic responsibility of making a profit
 Legal responsibility of obeying laws and regulations
 Ethical responsibility to uphold principals and standards
 Philanthropic responsibility to increase the firm’s positive impact
on society
3-5
Marketing Ethics and
Strategy
 Requires that organizations and individuals
accept responsibility
 Can lead to violations of public trust
 Involves complex and detailed decisions in
gray areas
 Deals with experiences and decisions made
at work
 Comes into play anytime individuals feel
manipulated or cheated
3-6
Potential Ethical Issues in Marketing
 Overall Issues
 Product Issues
 Pricing Issues
 Distribution Issues
 Promotion Issues
3-73.2 in Text
See Exhibit
The Challenges of Being
Ethical and Socially Responsible
 Business decisions involve complex decisions in
which correctness may not be clear cut
 e.g. Internet privacy, protecting trademarks and brand
names
 Ethical conflict may emerge from an
inconsistency between personal values and the
values held by members of the work group
 Ethical issues can develop into legal problems
3-8
Types of Misconduct
Observed in Organizations
3-9 3.4
Exhibit
Deceptive Practices in Marketing
 Deceptive Communications and Promotion





Fraud or any false communication
Exaggerated claims or statements
Ambiguous statements
Product labeling issues
Selling abuses
 Regulating Deceptive Marketing Practices
 Typically regulated by:
 The firms themselves
 Industry and trade associations
3-10
Organizational Determinants of
Marketing Ethics & Social Responsibility
 Ethical Decision Making
 Determined by an individual’s background and
business colleagues
 Affected by personal values, opportunity for
unethical behavior, and exposure to others
 Intricately tied to the firm’s culture and ethical
climate
 Can only be improved by planning and structure
 Likely to occur when modeled by a strong leader
3-11
Ethical Climate
 Part of a corporate culture that relates to an
organization’s expectations about
appropriate conduct
 The character component of an organization
 Sets the tone for ethical decisions
 Determines whether or not an individual
perceives an issue to be an ethical issue
3-12
Codes of Conduct
(1 of 2)
 Codes of Conduct (Codes of Ethics)
 Formal statement that describes what an
organization expects of its employees
 Not an effective means of controlling ethical
behavior unless integrated into daily decision
making
 Not effective unless the code has support of top
management
3-13
Codes of Conduct
(2 of 2)

Codes must reflect management’s desire for
compliance with values, rules, and policies

Codes should have six core values:
1.
2.
3.
4.
5.
6.
Trustworthiness
Respect
Responsibility
Fairness
Caring
Citizenship

Codes will not resolve every issue encountered in
daily operations

Codes can help managers deal with ethical dilemmas
3-14
Key Considerations in Developing and
Implementing a Code of Ethical Conduct
3-15 3.5
Exhibit
Texas Instruments’
“Ethics Quick Test”
 Is the action legal?
 Does it comply with our values?
 If you do it, will you feel bad?
 How will it look in the newspaper?
 If you know it’s wrong, don’t do it!
 If you’re not sure, ask.
 Keep asking until you get an answer.
3-16
Market Orientation
 Market Orientation
 The development of an organizational culture
that effectively and efficiently promotes the
necessary behaviors for the creation of superior
value for buyers and, thus, continuous superior
performance of the firm.
 Strongly tied to ethics and social responsibility
 Means fostering a sense of cooperation and
information exchange
3-17
Stakeholder Orientation

Stakeholder Orientation



The degree to which a firm understands and
addresses stakeholder demands
Strongly tied to ethics and social responsibility
Comprised of three activities:
1. Generation of stakeholder groups data
and assessment of firm effects on these
groups
2. Distribution of this information
throughout the firm
3. Responsiveness as a whole to this
intelligence
3-18
Connecting Ethics & Social Responsibility
to Marketing Performance
 Strong ethics causes employees to be:




Motivated to serve customers
Committed to the firm
Committed to high quality standards
Satisfied with their job
 Can lead to trust among firm’s stakeholders
 Is so important that it can have major negative
impacts on firms that don’t uphold ethical
standards
3-19
The Connection Between
Ethics and Strategic Planning
 Typically done through ethical compliance
programs or integrity initiatives
 Vested in the marketing plan
 Based on an understanding of:
 1) Risks associated with misconduct
 2) Ethical and social consequences of strategy
 3) Values of organizational members and stakeholders
 Manifested through actions … not just words
3-20