16
Marketing and Society: Social
Responsibility and Marketing
Ethics
ROAD MAP: Previewing the Concepts
• Identify the major social criticisms of
marketing.
• Define consumerism and environmentalism
and explain how they affect marketing
strategies.
• Describe the principles of socially
responsible marketing.
• Explain the role of ethics in marketing.
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Criticisms of Marketing
High Prices
Deceptive Practices
High-Pressure Selling
Shoddy or Unsafe Products
Planned Obsolescence
Poor Service to Disadvantaged Consumers
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High Prices
Caused by:
High Costs of Distribution
High Advertising and Promotion Costs
Excessive Markups
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High Costs
A heavily promoted brand of aspirin sells for much more than a virtually
identical non-branded or store-branded product. Critics charge that promotion
adds only psychological value to the product rather than functional value.
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Social Responsibility
Click the picture above to play video
Honest Tea offers
customers, in
addition to tea, a
relationship with a
community.
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Deceptive Practices
• Deceptive Pricing:
– Falsely advertising “factory” or “wholesale” prices or
large reductions from phony high retail list prices.
• Deceptive Promotion:
– Overstating a product’s features or performance,
running rigged contests.
• Deceptive Packaging:
– Exaggerating package contents through subtle
design, using misleading labeling, etc.
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High-Pressure Selling
• Salespeople are trained to deliver smooth,
canned talks to entice purchase.
• Hard sales can occur because of prizes
going to top sellers.
• High-pressure selling not good for longterm relationships.
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Shoddy or Unsafe Products
• Products not made well or service not
performed well.
• Products deliver little benefit or can be
harmful.
• Unsafe products due to manufacturer
indifference, increased production
complexity, poorly trained labor, and poor
quality control.
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Product Safety
Following its recall of
6.5 million flawed
Firestone tires,
product liability and
safety concerns have
driven Bridgestone/
Firestone to the brink
of bankruptcy.
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Planned Obsolescence
• Products needing replacement before they
should be obsolete.
• Producers change consumer concepts of
acceptable styles.
• Intentionally holding back attractive
functional features, then introducing them
later to make old model obsolete.
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Poor Service to Disadvantaged
Consumers
• Poor may pay more for inferior goods.
• “Redlining” may occur in disadvantaged
neighborhoods.
• Higher insurance premiums to people with
poor credit ratings.
• “Weblining” can occur.
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Marketing’s Impact on Society as
a Whole
False Wants & Too
Much Materialism (i.e.,
what you own vs. who
you are).
Too Much Political
Power
Producing Too Few
Social Goods
Cultural Pollution
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Cultural Pollution
Our senses are sometimes assaulted by commercial messages.
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Marketing’s Impact on Other
Businesses
Acquisitions of Competitors
Marketing Practices That Create
Barriers to Entry
Unfair Competitive Marketing Practices
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Consumerism
• Consumerism is an
organized movement
of citizens and
government agencies
to improve the rights
and power of buyers
in relation to sellers.
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Consumerism: Sellers’ Rights
The right to introduce any product in any size and style, provided it is
not hazardous to personal health or safety; or, if it is, to include proper
warnings and controls.
The right to charge any price for the product, provided no discrimination
exists among similar kinds of buyers.
The right to spend any amount to promote the product, provided it is
not defined as unfair competition.
The right to use any product message, provided it is not misleading or
dishonest in content or execution.
The right to use any buying incentive schemes, provided they are not
unfair or misleading.
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Consumerism: Buyers’ Rights
The right not to buy a product that is offered for sale.
The right to expect the product to be safe.
The right to expect the product to perform as claimed.
The right to be well informed about important aspects of the product.
The right to be protected against questionable products and marketing
practices.
The right to influence products and marketing practices in ways that will
improve “quality of life.”
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Environmentalism
• An organized
movement of
concerned citizens
and government
agencies to protect
and improve
people’s living
environment.
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Environmental Sustainability
• A management
approach that
involves developing
strategies that both
sustain the
environment and
produce profits for
the company.
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Environmental Sustainability Grid
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Legal Issues Facing Marketing Mgmt.
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Enlightened Marketing
• A marketing philosophy holding that a
company’s marketing should support the
best long-run performance of the
marketing system.
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Enlightened Marketing
• Consumer-Oriented Marketing:
– The philosophy of enlightened marketing that
holds that the company should view and
organize its marketing activities from the
consumer’s point of view.
• Innovative Marketing:
– A principle of enlightened marketing that
requires that a company seek real product
and marketing improvements.
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Innovative Marketing
Colgate’s Total toothpaste is perhaps the best example of Colgate's
passion for innovation. The breakout brand provides a combination
of benefits, including cavity prevention, tartar control, fresh breath,
and long-lasting effects.
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Enlightened Marketing
• Value Marketing:
– A principle of enlightened marketing that
holds that a company should put most of its
resources into value-building marketing
investments.
• Sense-of-Mission Marketing:
– A principle of enlightened marketing that
holds that a company should define its
mission in broad social terms rather than
narrow product terms.
– Click Here to View Ben & Jerry's Mission
Statement
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Societal Classification of Products
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Discussion Question
• Based on the societal classification
scheme, how would you classify the
following products?
– McDonald’s Big Mac
– A handgun
– Airbags in an automobile
– Daily vitamins
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Marketing Ethics
• Corporate Marketing Ethics Policies:
– Broad guidelines that everyone in the organization
must follow.
• These should cover:
–
–
–
–
–
–
Distributor relations
Advertising standards
Customer service
Pricing
Product development
General ethical standards
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Marketing Ethics
• What principle should guide companies
and marketing managers on issues of
ethics and social responsibility?
Free market and
legal system
Responsibility
falls to individual
companies and
managers
Click Here to See: "Malden Mills: A Study in Leadership"
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Ethics Programs
PricewaterhouseCoopers
established a
comprehensive ethics
program, which begins
with a code of conduct
called “The Way We Do
Business.” Says PwC’s
CEO, “Ethics is in
everything we say and
do.”
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Interactive Student
Assignment
• Choose a partner and discuss the
following:
– Should companies follow the axiom “When In
Rome…” when making ethical decisions in
foreign countries?
– Why or why not?
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Rest Stop: Reviewing the Concepts
1. Identify the major social criticisms of
2.
3.
4.
marketing.
Define consumerism and
environmentalism and explain how they
affect marketing strategies.
Describe the principles of socially
responsible marketing.
Explain the role of ethics in marketing.
16-33
Q: Which of the following are
common product complaints?
1. poorly made products
2. products that deliver little benefit
3. unsafe products
4. all of the above
AK, 7e – Chapter 16
16-34
Q: Among the deceptive marketing
practices cited by critics are _____.
1. deceptive packaging
2. deceptive pricing
3. deceptive promotion
4. all the above
AK, 7e – Chapter 16
16-35
Q: Deceptive practices have led
to legislation, such as the _____
Act.
1. Robinson-Patman
2. FTC
3. Consumer Product Safety
4. Wheeler-Lea
AK, 7e – Chapter 16
16-36
Q: The question, "What aspects of our
production process create the most
pollution?" is likely to come out of what
practice of environmental sustainability?
1. Sustainability vision
2. New environmental technology
3. Pollution prevention
4. Product stewardship
AK, 7e – Chapter 16
16-37
Q: The question, "Would making our
products recyclable add value for our
customers?" is likely to come out of what
practice of environmental sustainability?
1.Sustainability vision
2.New environmental technology
3.Pollution prevention
4.Product stewardship
AK, 7e – Chapter 16
16-38
Q: The statement, "Our mission is for
our company to evolve in ways that help
solve social and environmental
problems" is likely to come out of what
practice of environmental
sustainability?
1. Sustainability vision
2. New environmental technology
3. Pollution prevention
4. Product stewardship
AK, 7e – Chapter 16
16-39
Q: Consumer advocates would like to
expand buyers’ rights to include all the
following except:
1. the right to be well informed about
important aspects of the product.
2. the right to be protected against
questionable products and marketing
practices.
3. the right to a full refund if the buyer is
unsatisfied, no questions asked.
4. the right to influence products and
marketing practices in ways that will
improve the "quality of life."
AK, 7e – Chapter 16
16-40
Q: Do you think it would be
proper to give a "gift" in order to
win an account?
1. Yes
2. No
AK, 7e – Chapter 16
16-41
Q: Do you think drug
companies are justified in
charging high prices for their
products?
1. Yes
2. No
AK, 7e – Chapter 16
16-42
Q: A delicious and nutritious
salad is an example of a
___________.
1. pleasing product
2. desirable product
3. salutary product
4. deficient product
AK, 7e – Chapter 16
16-43
Q: Junk food is an example of a
____________.
1. pleasing product
2. desirable product
3. salutary product
4. deficient product
AK, 7e – Chapter 16
16-44