MM2711 Introduction to Marketing

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MM2711Introduction to Marketing

• Ethics and social responsibility
• Week 4

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MARKETING ETHICS

• Why do marketers have to worry about ethics?
• What does it take for a firm to be considered
  socially responsible?
• How should a firm make ethically responsible
  decision?
• How can ethics and social responsibility be
  integrated into a firms marketing strategy?

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Attitudes About the Ethical Standards of Various
Professions

• Why do you feel marketers (advertising
  practitioners) rank so low on this scale?
• What can marketers do to improve their ranking?

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Firm Goals
Profit is important to the success of the firm.
But how the firm makes that profit can have a
dramatic impact on the firms future.
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Social Criticisms of Marketing

• Marketings Impact on Individual Consumers

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Social Criticisms of Marketing
Marketings Impact on Individual Consumers High
Prices
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Social Criticisms of Marketing

• Marketings Impact on Individual Consumers
• Deceptive Practices

• Complaint Companies use deceptive practices that
  lead customers to believe they will get more
  value than they actually do. These practices fall
  into three categories
• Deceptive pricing (e.g. discount after price
  increasing)
• Deceptive promotion (e.g. bait and switch)
• Deceptive packaging (e.g. difference in actual
  and apparent sizes)

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Social Criticisms of Marketing

• Marketings Impact on Individual Consumers
• Deceptive Practices

• Response
• Support Legislation to protect consumers from
  deceptive practices
• Make lines clear
• Products that are harmful
• Products that provide little benefit
• Products that are not made well

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Social Criticisms of Marketing

• Marketings Impact on Individual Consumers

• High-Pressure Selling

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Social Criticisms of Marketing

• Marketings Impact on Individual Consumers

• Shoddy, Harmful, or Unsafe Products

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Social Criticisms of Marketing

• Marketings Impact on Individual Consumers

• Planned Obsolescence

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Social Criticisms of Marketing

• Marketings Impact on Individual Consumers

• Poor Service to Disadvantaged Consumers

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Social Criticisms of Marketing

• Marketings Impact on Society as a Whole

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Social Criticisms of Marketing

• Marketings Impact on Society as a Whole

• False Wants and Too Much Materialism

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Social Criticisms of Marketing

• Marketings Impact on Society as a Whole

• Too Few Social Goods

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Social Criticisms of Marketing

• Marketings Impact on Society as a Whole

• Cultural Pollution

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Social Criticisms of Marketing

• Marketings Impact on Other Businesses

• Acquisition of competitors reduces competition
• Marketing practices create barriers to entry
• High promotional spending
• Abuse of patent protection
• Unfair competitive marketing practices
• Predatory pricing
• Supplier relations

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MARKETING ETHICS

• Why do marketers have to worry about ethics?
• What does it take for a firm to be considered
  socially responsible?
• How should a firm make ethically responsible
  decision?
• How can ethics and social responsibility be
  integrated into a firms marketing strategy?

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American Marketing Association Code of Ethics
Each sub-area within marketing, such as marketing
research, advertising, pricing, and so forth, has
its own code of ethics that deals with the
specific issues that arise when conducting
business in those areas.
Source http//www.helleniccomserve.com/marketing
codeofethics.html
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The Six Tests of Ethical Action
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Creating an Ethical Climate in the Workplace

• Values
• Establish
• Share
• Understand
• Rules
• Management commitment
• Employee dedication
• Controls
• Reward
• Punishment

A strong ethical climate requires a commitment
from the top down within the firm. Everyone
within the firm must agree to a system of
controls that rewards appropriate behavior and
punishes inappropriate behavior.
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The Link Between Ethics and Corporate Social
Responsibility
Corporate social responsibility describes the
voluntary actions taken by a company to address
the ethical, social, and environmental impacts of
its business operations and the concerns of its
stakeholders.
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MARKETING ETHICS

• Why do marketers have to worry about ethics?
• What does it take for a firm to be considered
  socially responsible?
• How should a firm make ethically responsible
  decision?
• How can ethics and social responsibility be
  integrated into a firms marketing strategy?

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A Framework forEthical Decision Making
Example How to make ethical decisions in a
marketing research firm
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Step One Identify Issues

• In a marketing research firm, ethical issues
  might include
• data collection methodsnot informing respondents
  that they are being observed
• hiding the true purpose of a study from
  respondentstelling them they are an independent
  research company, but actually doing research for
  a particular politician.
• using results to mislead or even harm the
  publicresults of a pharmaceutical study.

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Step Two Gather Information and Identify
Stakeholders
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Stakeholder Analysis Matrix for a Marketing
Research Firm
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Step Three Brainstorm Alternatives

• Halt the market research project?
• Make responses anonymous?
• Instituting training on the AMA Code of Ethics
  for all researchers

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Step Four Choose a Course of Action
Weigh the alternatives
Take a course of action
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Ethical Decision-Making Evaluation Questionnaire
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MARKETING ETHICS

• Why do marketers have to worry about ethics?
• What does it take for a firm to be considered
  socially responsible?
• How should a firm make ethically responsible
  decision?
• How can ethics and social responsibility be
  integrated into a firms marketing strategy?

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Integrating Ethics Into Marketing Strategy
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Planning Phase

• The mission or vision statement sets the overall
  ethical tone for planning.
• Firms often go beyond the mission or vision
  statement by including a values statement.

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Implementation Phase
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Control Phase

1. Check successful implementation
2. React to change

Any plan requires constant evaluation and
revision, and this truism applies particularly to
the evaluation of ethical issues.