Ethics and Social Responsibility in Marketing

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Ethics and Social Responsibility in
Marketing
Chapter 3
Ethical Marketing= Oxymoron?
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What are ethics?

Ethics are the “moral principles and values
that govern the actions and decisions of an
individual or group.”
Legal v. Ethical Standards

Laws


Standards enforceable by the courts
Are laws and ethics the same thing?

Nike: Illegal? Unethical?

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



Societal Culture and Norms
Business Culture and Industry Practices
Corporate Culture and Expectations
Society

Societal Culture


Levi Strauss
Societal Values

Patents
Businesses

Business Culture


The rules of the game in interactions between
buyers and sellers, and companies
Ethics of Exchange


Caveat Emptor
Consumer Bill of Rights
Businesses

Ethics of Competition

Economic espionage


Costs businesses in US
& Canada nearly $100
billion each year!
Bribery

Gifts, favors, etc.
Corporate Culture &
Expectations

Code of Ethics

Formal statement listing what comprises
acceptable behavior
Must be very clear
 Must be equally applied throughout the
organization


Whistleblowers
Ethical Theories

Moral idealism

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

“The ends justify the means”
Social Responsibility


Companies are accountable to society or
their actions
Three types:



Profit Responsibility
Stakeholder Responsibility
Societal Responsibility
Environment
 General Public

Societal Responsibility

Environment



Green Marketing
ISO 14000
General Public

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

“Literally false or potentially misleading”


False statements
Misleading Safety Claims
Misleading Affirmative Safety Claims
 Deceptive Denials of Product Risk
 Deceptive Information Omissions
 Unfair Information Omissions

Source: Mower & Minor. “Consumer Behavior: A Framework.”
Prentice-Hall, New Jersey, 2001.
Advertising to Children

What’s wrong with it?
Source: www.adstrategy.wordpress.com
Source: www.wikipedia.org
Telemarketing Fraud


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

Social audit

McDonald’s

Long-term: Sustainable development

Impact of ethical behavior:


Word-of-mouth
Outperform less ethical competitors
Ethical Conduct- Consumers

Dishonest consumer practices



Billions of dollars lost annually
Consumers are unwilling to pay higher
prices for ecologically safe products
Consumers lack information
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