CHAPTER 16 IN REVIEW
Marketing Ethics, Misbehavior, and Value
Chapter Summary
Glossary Terms
altruistic duties expectations placed
Discuss marketing ethics and how marketing ethics guide the
development of marketing programs.
upon a firm to give back to communities
through philanthropic activities
Marketing ethics are societal and professional standards of right and fair practices that
are expected of marketing managers. Marketing programs must be planned in ways that
adhere to marketing ethics. Most firms have explicitly stated rules and codes of conduct
for their employees and their activities in the marketplace. Most professional organizations
also have these codes. These ethics provide a framework from which marketing decisions
can be made.
Children’s Online Privacy Protection Act act that was established
to protect children’s privacy in online
environments
compensatory damages damages
that are intended to cover costs incurred
by a consumer due to an injury
Consumer Bill of Rights introduced
Describe the consumerism movement and how the movement
has affected marketing practice.
The consumerism movement gained momentum in the 1960s with the passage of the
Consumer Bill of Rights. Since that time, consumer advocacy groups have exerted pressure
on businesses to ensure that they are acting within the best interests of society. In part
as a result of the consumerism movement, marketers began to acknowledge and accept
what is referred to as the societal marketing concept, which states that marketing decision
making should be made within a framework that considers the effects of marketing action
on societal well-being.
The Marketing Mix and Business Ethics
TOOL
Product
COMMON USE
The development of a
good, service, or experience that will satisfy
consumers’ needs.
Failure to disclose that product won’t function properly
without necessary component
parts.
Place
The distribution of a marketing offer through various channels of delivery.
Limiting product availability in
certain markets as a means of
raising prices.
Price
The marketer’s statement
of value received from an
offering that may be monetary or non-monetary.
Stating that a regular price is
really a “sales” price. This practice is prohibited by law.
Promotion
Communicating an offering’s value through techniques such as advertising,
sales promotion, and wordof-mouth.
Promoting one item as being
on sale and then informing the
customer that the product is
out of stock and that a more
expensive item should be
bought. This practice, known
as “bait and switch,” is illegal.
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UNETHICAL USE
by President John F. Kennedy in 1962,
list of rights that includes the right to
safety, the right to be informed, the right
to redress and to be heard, and the right
to choice
consumerism activities of various
groups to voice concern for, and to
protect, basic consumer rights
corporate social responsibility organization’s activities and status
related to its societal obligations
customer orientation practice of
using sales techniques that focus on
customer needs
deceptive advertising message
that omits information that is important
in influencing a consumer’s buying
behavior and is likely to mislead
consumers acting “reasonably”
deficient products products that
have little or no potential to create value
of any type
desirable products products that
deliver high utilitarian and hedonic value
and that benefit both consumers and
society in the long run
door-in-the-face technique
ingratiation technique used in personal
selling in which a salesperson begins
with a major request and then follows
with a series of smaller requests
equity theory theory of satisfaction
in which a consumer compares the ratio
of his or her own outcomes and inputs
to the same ratio for another party in a
transaction
ethical duties expectations placed on
a firm to act within ethical boundaries
ethics standards or moral codes of
conduct to which a person, group, or
organization adheres
CHAPTER SIXTEEN
M A R K E T I N G E T H IC S , M IS B E H AVIO R , A N D VA LU E
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Chapter 16 Marketing Ethics, Misbehavior, and Value
even-a-penny-will-help technique ingratiation technique in which a
marketing message is sent that suggests
that even the smallest donation, such as
a penny or a dollar, will help a cause
foot-in-the-door technique ingratiation technique used in personal selling
in which a salesperson begins with a
small request and slowly leads up to one
major request
“I’m working for you!” technique
technique used by salespeople to create
the perception that they are working as
hard as possible to close a sale when they
really are not doing so
ingratiation tactics that are used to
become more attractive and likable to
another person or party
marketing concept concept that
states a firm should focus on consumer
needs as a means of achieving long-term
success
marketing ethics societal and
professional standards of right and fair
practices that are expected of marketing
managers as they develop and implement marketing strategies
morals personal standards and beliefs
used to guide individual action
negligence situation whereby an
injured consumer attempts to show that
a firm could foresee a potential injury
might occur and then decided not to act
on that knowledge
Comprehend the role of corporate social responsibility in the
field of marketing.
It is important for businesses today to focus on “doing well by doing good.” Being socially
responsible is one way in which businesses attempt to do well by doing the right things.
Corporate social responsibility refers to an organization’s activities and status related to
its societal obligations. Due to increased pressure from various consumer and media
groups, companies are finding that they must be socially responsible with their marketing
programs.
Understand the various forms of regulation that affect
marketing practice.
Federal, state, and local laws are in place to protect consumers from many forms of
marketer misbehavior. Federal bodies, such as the Federal Trade Commission and the Food
and Drug Administration, exist to monitor exchanges that take place between consumers
and marketing organizations. Other groups, such as the Better Business Bureau, the
American Association of Advertising Agencies, and the American Marketing Association,
also play important roles in monitoring marketing activities. Although these groups
attempt to bring fairness to the marketplace, ultimately it is up to the decision maker to
ensure that his or her own actions, and the actions of his or her firm, fall within generally
accepted business guidelines.
Comprehend the major areas of criticism to which marketers
are subjected.
Several issues in marketing receive criticism from various groups. Issues such as deceptive
advertising, marketing to children, marketing unsafe products, planning the obsolescence
of current products, using manipulative sales tactics, and practicing stealth marketing
campaigns are all considered questionable by various groups.
planned obsolescence act of
planning the premature obsolescence of
product models that perform adequately
Understand how products liability issues can provide both
positive and negative results for consumers.
pleasing products products that
Strict liability is the primary legal doctrine governing products liability cases in the United
States today. Under strict liability, a consumer suing a company over a product injury need
only show that an injury occurred and that a product was faulty. Generally, demonstrating a
faulty product has not proved difficult. Policies such as this protect consumers by providing
relatively consumer-friendly vehicles to pursue damages from companies for injuries. In this
way, they help consumers. However, they also harm consumers by driving up the costs of
many products and restricting the amount of products available to choose from.
provide hedonic value for consumers but
may be harmful in the long run
products liability extent to which
businesses are held responsible for
product-related injuries
puffery practice of making exaggerated claims about a product and its
superiority
punitive damages damages that are
sought to punish a company for behavior
associated with an injury
sales orientation practice of using
sales techniques that are aimed at satisfying the salesperson’s own needs and
motives for short-term sales success
salutary products products that are
good for both consumers and society in
the long run and that provide high utilitarian value, but no hedonic value
stealth marketing marketing technique
in which consumers do not realize that they
are being targeted for a particular product
promotion
strategic initiatives process of strategi-
societal marketing concept mar-
cally engaging in socially responsible activities in order to increase the value of the firm
keting concept that states that marketers
should consider not only the wants and
needs of consumers but also the needs
of society
strict liability legal action against a firm
whereby a consumer demonstrates in court
that an injury occurred and that the product associated with the injury was faulty in some way
CHAP TER S IXTEEN
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M ARKE T ING E T HICS, M ISBE HAV IOR, AND VALUE
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