

Be able to explain marketing’s impact on
individual consumers, society as a whole and
businesses.
Be able to recommend actions that promote
a socially responsible way of doing business
2

Reminder: “Marketing is a social and
managerial process by which individuals and
groups obtain what they need and want
through creating and exchanging products
and value with others.” (Kotler et al, 2008, p7)
3

“Certain marketing practices hurt individual
consumers, society as a whole and other
business firms.” (Kotler et al, 2008, p67)
4
‘To be an ethical business, an organisation must
be a business and must conduct its activities
ethically. An organisation is a business if its
objective is maximising long-term owner
value; a business acts ethically, if its actions
are compatible with that aim and with
distributive justice and ordinary decency.’
Sternberg, E. (1994), Just Business, London: Warner
5
‘Managers seeking to ‘balance’ stakeholder
interests will quickly encounter the very
practical problem of how that ‘balance’
should be defined.’
(Fill, 2002:150)
6
Positive
 Increase sales  increase
employment
 Informs individuals on
products & services
 Publicity  better
profile more business
 Promotes investment in
R&D and social sciences
 Get a broader market 
global expansion, more
choice
Negative
 Offensive
 Environmental impact
 Promotes obsolescence
 Eliminate businesses
 Pushing through
unpopular strategies
 Make us buy things that
we don’t need
7



The study of moral principles & how
individuals should conduct themselves in
social affairs
Ethics are an individual’s personal beliefs
about right & wrong behaviour
Ethical considerations in decision taking
involve the decision taker’s personal feelings
& subjective opinion as to what’s good or bad
 can vary by individual
 can vary by culture
8

Factors instrumental in formation of ethics
 family influences
 peer influences
 life experiences
 personal values & morals
 situational factors

Managerial ethics - standards of behaviour
that guide individual managers in their
work:
 Relationship of the firm to its employees e.g. working
conditions, privacy
 relationship of employees to the firm e.g. conflicts of
interest
 relationship of firm to other economic agents
9

Negatives
 High prices to cover the cost of:
▪ Distribution
▪ Advertising & Promotion
▪ Excessive mark-ups
 Deceptive practices
 High-pressure selling
 Shoddy, harmful or unsafe products
 Poor service to disadvantaged customers
10
•Planned obsolescence
11

False wants and too much materialism
12

Too few social goods

Cultural pollution

Excessive political power
13

Acquisition of competitors

Marketing practices that create barriers to
entry

Unfair competitive practices
14
“Former employees have alleged the company
induced doctors to use Infuse and other spine
products by sending them on lavish trips to
resorts, paying them undeserved royalties, and
handing out lucrative consulting contracts that
required little work.”
(David Armstrong, Wall Street Journal, Oct. 3, 2008)
15
Greg Norman, left,
talks with CVS
President Tom
Ryan, second
from right, as
others look on
during the 6th
Annual CVS
Charity Classic in
2004.
The company’s ethics policy is supposed to keep
vendors from using fancy gifts to win favor with CVS
execs. But the rules don’t apply to the company’s
annual charity golf tournament, where vendors pay big
bucks for trips with key CVS executives,
16
Influences in Ethical Decision Making
Workplace
Co-workers
Managers
Ethical Policies
Community
Family
Ethical norms
Culture
Self
Religion
Profession
Legal
System
Cron and Decarlo, 2010
Law
Punishment
17
1.
Get support from top management showing that they expect
you to follow the spirit and letter of the law.
2.
Develop and distribute a sales ethics policy.
3.
Establish the proper moral climate. If the bosses follow the
rules, then the troops are apt to do likewise.
4.
Assign realistic sales goals. People who try to meet an unfair
quota are more likely to rationalize their way to a kickback
scheme.
5.
Set up controls when needed. Watch people who live above
their income.
6.
Suggest that salespeople call for help when they face unethical
demands.
7.
Get together with your competition if payoffs are an industry
problem.
8.
Blow the whistle if necessary.
Cron and Decarlo, 2010
18

Enlightened marketing – “holds that a
company’s marketing should support the best
long-run performance of the marketing system.
It consists of five principles.” (Kotler et al, 2008,
p96)
 Consumer-oriented marketing
 Value marketing
 Sense-of-mission marketing – mission should be
defined in broad social terms rather than narrow
product terms
 Societal marketing
 Innovative marketing – real improvements
19

You have a chance to win a big account that will mean
a lot to you and your company. The purchasing agent
hints that a ‘gift’ would influence the decision. Your
assistant recommends sending a colour TV set to the
buyer’s home. What would you do?

You have heard that a competitor has a new product
feature that will make a big difference in sales. The
competitor will demonstrate the feature in a private
dealer meeting at the annual trade show. You can
easily send a snooper to this meeting to learn about
the new feature. What would you do?
20

Kotler, P., Armstrong, G., Wong, V. and
Saunders, J. (2008), Principles of Marketing,
Fifth European Edition, Pearson; chapter 2
21