Ethics and Social Responsibility in
Marketing
Chapter 3
Ethical Marketing= Oxymoron?
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What are ethics?
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Ethics are the “moral principles and values
that govern the actions and decisions of an
individual or group.”
Legal v. Ethical Standards
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Laws
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Standards enforceable by the courts
Are laws and ethics the same thing?
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Nike: Illegal? Unethical?
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Causes for the increasing focus on ethics
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Diverse value systems within the culture
Public groups are more active
Expectations have increased
Decrease in ethical behavior?
Influences upon What Is Ethical
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Societal Culture and Norms
Business Culture and Industry Practices
Corporate Culture and Expectations
Society

Societal Culture

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Levi Strauss
Societal Values
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Patents
Businesses
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Business Culture
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The rules of the game in interactions between
buyers and sellers, and companies
Ethics of Exchange

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Caveat Emptor
Consumer Bill of Rights
Businesses

Ethics of Competition
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Economic espionage

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Costs businesses in US
& Canada nearly $100
billion each year!
Bribery

Gifts, favors, etc.
Corporate Culture &
Expectations
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Code of Ethics
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Formal statement listing what comprises
acceptable behavior
Must be very clear
 Must be equally applied throughout the
organization
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Whistleblowers
Ethical Theories
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Moral idealism
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Considers certain rights as universal
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Utilitarianism
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Do no harm
“The greatest good for the greatest number”
Deontological Theories
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“The ends justify the means”
Social Responsibility

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Companies are accountable to society or
their actions
Three types:
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Profit Responsibility
Stakeholder Responsibility
Societal Responsibility
Environment
 General Public
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Societal Responsibility
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Environment

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Green Marketing
ISO 14000
General Public
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Cause-Related
Marketing
Public-Policy Issues
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Deceptive Advertising
Advertising to Children
Telemarketing Fraud
Source: Mower & Minor. “Consumer Behavior: A
Framework.” Prentice-Hall, New Jersey, 2001.
Deceptive Advertising
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“Literally false or potentially misleading”

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False statements
Misleading Safety Claims
Misleading Affirmative Safety Claims
 Deceptive Denials of Product Risk
 Deceptive Information Omissions
 Unfair Information Omissions
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Source: Mower & Minor. “Consumer Behavior: A Framework.”
Prentice-Hall, New Jersey, 2001.
Advertising to Children
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What’s wrong with it?
Source: www.adstrategy.wordpress.com
Source: www.wikipedia.org
Telemarketing Fraud

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Costs Americans $40
billion per year
Who is at risk?
Source: Mower & Minor. “Consumer
Behavior: A Framework.” PrenticeHall, New Jersey, 2001.
Compulsive Behavior
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Smoking
Drinking
Gambling
Compulsive Shopping
Source: Mower & Minor. “Consumer Behavior: A Framework.” Prentice-Hall,
New Jersey, 2001.
Measuring Ethical Conduct
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Social audit
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McDonald’s
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Long-term: Sustainable development
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Impact of ethical behavior:
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Word-of-mouth
Outperform less ethical competitors
Ethical Conduct- Consumers
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Dishonest consumer practices
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Billions of dollars lost annually
Consumers are unwilling to pay higher
prices for ecologically safe products
Consumers lack information