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Marketing and Society: Social Responsibility and Marketing Ethics

•Chapter 4

•PowerPoint slides

•Express version

•Instructor name

•Course name

•School name

•Date

Principles of Marketing, Sixth Canadian Edition

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Learning Objectives

• After studying this chapter, you should be able to:– Understand marketing’s multiple responsibilities, and

identify the major social and ethical 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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Lessons for Socially Responsible Companies

• What you sell is important

• Be proud to be in business

• Make a solid commitment to change

• Focus on two bottom lines

• Forget the hype

Table 4.1Source: Thea Singer, “Can Business Still Save the World?”Inc., April 30, 2001, pp58-71; and MEC website, www.mec.ca

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Marketing’s Impact on Individual Consumers

• High prices:– High costs of distribution

– High advertising and promotion costs

– Excessive markups

• Deceptive practices:– Pricing, promotion, packaging, and telephone fraud

• High pressure selling

• Shoddy or unsafe products

• Planned obsolescence

• Poor service to disadvantaged consumers

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Marketing’s Impact on Society as a Whole

• False wants and too much materialism

• Too few social goods

• Cultural pollution• Too much political power

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Marketing’s 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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Seller’s Versus Consumers’ Rights

Sellers’ rights:– To introduce products of

different styles and sizes, provided they are not hazardous

– To set its own prices, provided no discrimination occurs

– To spend to promote the product

– To use any product message, provided it is not misleading

– To use buying incentives

Consumers’ rights:– To choose

– To be informed

– To safety

– To be heard

– To redress

– To consumer education

– To participate in marketplace decision making

– To have access to basic services

– To a sustainable environment

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Environmentalism

• Environmentalism:– An organized movement of concerned citizens and government

agencies

– To protect and improve people’s living environment

• Environmental sustainability:– Management approach

– Develop strategies that both sustain the environment and

– Produce profits for the company

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Socially Responsible Marketing

• Enlightened marketing:– Consumer-oriented marketing

– Innovative marketing

– Value marketing

– Sense-of-mission marketing

– Societal marketing

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Ethical Issues Associated with Marketing Practice

• Marketing research:– Invalid or unreliable research studies

– Invasion of consumer privacy, not respecting confidentiality

– Disguising sales as research

– Failure to secure voluntary and informed participation

– Competitive intelligence gathering

• Segmentation/target marketing:– Redlining: discriminating against poor

or disadvantaged consumers

– Targeting inappropriate products to vulnerable audiences

Table 4.2

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Ethical Issues Associated with Marketing Practice

• Positioning:– Making socially undesirable products more desirable

– Positioning on questionable benefits

• Product:– Marketing unsafe products

– Product testing: on animals or insufficient testing to reveal safety concerns

– Marketing socially controversial products

• Packaging and labelling:– Actual versus apparent size

– Misleading or inadequate information

– Excessive or environmentally-unfriendly packaging Table 4.2

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Ethical Issues Associated with Marketing Practice

• Pricing:– Collusion with competitors

– Negative option billing

– Prejudice in negotiated prices

– Price discrimination

• Advertising:– Sex role stereotyping

– Dehumanizing images and portraying people as products

– Bait-and-switch advertising

Table 4.2

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Ethical Issues Associated with Marketing Practice

• Sales and channel management:– High pressure sales tactics

– Unfairly disparaging competitors’ goods

– Channel loading

Table 4.2

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Some Morally Difficult Situations in Marketing

• You are considering hiring a product manager who just left a competitor’s company. She would be more than happy to tell you all the competitor’s plans for the coming year. What do you do?

• 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 fine colour television set to the buyer’s home. What do you do?

• You are interviewing a capable woman applicant for a job as a salesperson. She is better qualified than the men just interviewed. Nevertheless, you know that some of your important customers prefer dealing with men, and you will lose some sales if you hire her. What do you do?

• You are a sales manager in an encyclopedia company. Your competitor’s salespeople are getting into homes by pretending to take a research survey. After they finish the survey, they switch to their sales pitch. This technique seems to be very effective. What do you do?

Table 4.3

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In Conclusion…

• The learning objectives for this chapter were:– Understand marketing’s multiple responsibilities and identify

the major social and ethical 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