ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING. You should be able to Appreciate the nature and...
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Transcript of ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING. You should be able to Appreciate the nature and...
ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING
You should be able to
• Appreciate the nature and significance of ethics in marketing.
• Understand the differences between legal and ethical behavior in marketing.
• Identify factors that influence ethical and unethical marketing decisions.
• Distinguish among the different concepts of ethics and social responsibility.
• Recognize the importance of ethical and socially responsible consumer behavior.
Anheuser Busch’s campaign for responsible drinking and environment-conscious disposition of packaging
• “Know When to Say When” campaign for responsible
drinking appeared first via posters in 1983 and two
years later with TV commercials. Such efforts have
contributed to a sizeable decline in fatal drunk-driving
accidents and a 64% drop in teen drunk-driving deaths
since 1982.• Anheuser Busch is an advocate and sponsor or
numerous efforts to preserve the environment and is the world’s largest recycler of aluminum cans.
Trends in alcoholic consumption by high school seniors
50
55
60
65
70
75
80
'79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
Per
cen
tage
Year
Definition of Ethics
Ethics are . . . .Ethics are . . . .
The moral principals and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas.
The moral principals and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas.
Classifying marketing decisions according to ethical and legal relationships
Ethical
Eth
ical
ity
Illegal LegalLegality
Ethical butillegal
Ethical butillegal
Unethical and illegal
Unethical and illegal
Unethical butlegal
Unethical butlegal
Ethicalandlegal
Ethicalandlegal
Unethical
Concept Check
1. What are ethics?
2. What are 4 possible reasons for the present state of ethical conduct in our country?
Understanding Ethical Marketing Behavior
Consider the use of another’s ideas:• In the US copyrights, trademarks and patents are
considered intellectual property, and unauthorized use is illegal and unethical.
• Outside the US, sometimes due to the culture of a country, unauthorized use of copyrights, patents and trademarks is not considered unethical or illegal. Such is the case in countries like China, Mexico and Korea.
International comparison of the percent of U.S. software package sales that are illegal copies
0
20
40
60
80
100
Per
cent
age
Ch
ina
Tai
wan
Iber
ia
Sw
itze
rlan
d
Kor
ea
Jap
an
Ital
y
Ben
elu
x
Ger
man
y
Ben
elu
x
A framework for understanding ethical behavior
Societal culture and norms
Societal culture and norms
Business culture and industry practices
Business culture and industry practices
Organizational culture and expectations
Organizational culture and expectations
Personal moral philosophy and ethical behavior
Personal moral philosophy and ethical behavior
Consumer Bill of Rights
In 1962 President John F. Kennedy
outlined the Consumer Bill of
Rights that codified the ethics of
exchange between buyers and
sellers.
Consumer bill of rights - continued
SafetySafety
Be informedBe informed
ChooseChoose
Be heardBe heard
Right to Right to
Two kinds of unethical behavior
1. Industrial Espionage is the clandestine collection of trade secrets or proprietary information about a
company’s competitors.
Industrial espionage is most prevalent in high-technology industries, such as
electronics, specialty chemicals, industrial equipment,
aerospace, and pharmaceuticals, where technical know-how and trade secrets separate industry leaders from followers.
Two kinds of unethical behavior
2. The giving and receiving of bribes and kickbacks
is the second form of unethical competitive
behavior.
Bribes and kickbacks are often disguised as gifts,
consultant fees and favors. They are more
common in business-to-business and government
marketing than in consumer marketing.
Foreign Corrupt Practices Act
This act makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.
Generally, ethical standards are more likely to be compromised in industries experiencing intense competition and in countries in earlier stages of economic development.
American Marketing Association Code of Ethics
Members of the American Marketing Association have
joined together in subscribing to its code of ethics
embracing the following topics:
1. Responsibilities of the Marketer
2. Rights and Duties of Parties in the Marketing Exchange Process
3. Organizational Relationships
Personal moral philosophies
MORAL IDEALISMMORAL IDEALISM
Considers certain individual rights or duties universal regardless of the outcome
Considers certain individual rights or duties universal regardless of the outcome
UTILITARIANISMUTILITARIANISM
Considers the “greatest good for the greatest number” by assessing the costs and benefits of the consequences
Considers the “greatest good for the greatest number” by assessing the costs and benefits of the consequences
Concept Check
1. What rights are included in the
Consumer Bill of Rights?
2. What ethical practice is addressed in
the Foreign Corrupt Practices Act?
3. What is meant by moral idealism?
Three concepts of social responsibility
Profit responsibility
Owners/Stockholders
Stakeholder responsibility
Societal responsibility
Societal responsibility
Gen
eral
pu
blicE
cological environm
entCus
tom
ers E
mployees
Suppliers/Distributors
Public interest groupsPublic interest groups
Elements of a social audit
Of social expectations and rationale for engaging in social responsibility endeavors
Of social expectations and rationale for engaging in social responsibility endeavors
Of causes or programs consistent with the company’s mission
Of causes or programs consistent with the company’s mission
Of objectives and priorities for programs and activities to be undertaken
Of objectives and priorities for programs and activities to be undertaken
Of the type and amount of resources necessary to achieve objectives
Of the type and amount of resources necessary to achieve objectives
Recognition
Identification
Determination
Specification
Evaluation Evaluation Of programs and activities and assessment of future involvement
Of programs and activities and assessment of future involvement
Valdez Principles
The Valdez Principles encourage companies to:
1. eliminate pollutants, minimize hazardous wastes,
and conserve nonrenewable resources;
2. market environmentally safe products and services;
3. prepare for accidents and restore damaged
environments;
4. provide protection for employees who report
environmental hazards;
Valdez Principles
appoint an environmentalist to their boards of directors, name an executive for environmental affairs, and develop an environmental audit of their global operations to be made available for public inspection.