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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-1
ETHICS AND
SOCIALRESPONSIBILITY
IN MARKETING
CHAPTER
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-2
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
1. Explain the differences between legal
and ethical behavior in marketing.
2. Identify factors that influence ethicaland unethical marketing decisions.
3. Describe the different concepts of social
responsibility.
4. Recognize unethical and socially
irresponsible consumer behavior.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-3
THERE IS MORE BREWING AT
ANHEUSER-BUSCH THAN BEER
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-4
NATURE AND SIGNIFICANCE OF
MARKETING ETHICS
Ethics
Laws
Ethical/Legal Framework in Marketing
Current Perceptions of Ethical Behavior
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-5
Concept Check
1. What are ethics?
A: Ethics are the moral principles and
values that govern the actions anddecisions of an individual or group.
They serve as guidelines on how to
act rightly and justly when faced withmoral dilemmas.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-6
Concept Check
2. What are three possible reasons for thepresent state of ethical conduct in the
United States?
A: (1) Pressure on businesspeople to make decisionsin a society with diverse value systems. (2)
Business decisions being judged publicly bygroups with different values and interests. (3)
Ethical business conduct may have declined.
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UNDERSTANDING ETHICAL
MARKETING BEHAVIOR
Societal Culture and Norms
Culture
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FIGURE 4-1FIGURE 4-1 A framework for understanding
ethical behavior
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UNDERSTANDING ETHICAL
MARKETING BEHAVIOR
Business Culture and Industry Practices
Business Cultures
Ethics of Exchange
Caveat Emptor
Consumer Bill of Rights
U.S. Consumer Product Safety Commission
Federal Trade Commission (FTC)
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Federal Trade CommissionIs your online privacy protected?
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UNDERSTANDING ETHICAL
MARKETING BEHAVIOR
Ethics of Competition
Economic Espionage
Bribes
Kickbacks
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UNDERSTANDING ETHICAL
MARKETING BEHAVIOR
Corporate Culture and Expectations
Corporate Culture
Whistle-blowers
Code of Ethics
Ethical Behavior of Top Management and
Co-workers
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UNDERSTANDING ETHICAL
MARKETING BEHAVIOR
Moral Idealism
Utilitarianism
Personal Moral Philosophy andEthical Behavior
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FIGURE 4-AFIGURE 4-A Personal moral philosophies
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3M ScotchgardWhich moral philosophy did 3M use and why?
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Concept Check
1. What rights are included in theConsumer Bill of Rights?
A: The rights to safety, to be informed, tochoose, and to be heard.
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Concept Check
2. What is meant by moral idealism?
A: Moral idealism is a personal moral
philosophy that considers certainindividual rights or duties as
universal, regardless of the outcome.
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UNDERSTANDING SOCIAL
RESPONSIBILITY IN MARKETING
Concepts ofSocial Responsibility
Profit Responsibility
Green Marketing
Stakeholder Responsibility
Societal Responsibility
Cause Marketing
Profiteering
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FIGURE 4-2FIGURE 4-2 Three concepts of social
responsibility
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AvonWhy do companies engage in cause marketing?
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-21
UNDERSTANDING SOCIAL
RESPONSIBILITY IN MARKETING
Social Audit
Sustainable Development
The Social Audit: Doing Well by DoingGood
Turning the Table: Consumer Ethicsand Social Responsibility
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-22
Ronald McDonald HouseHow do companies do well by doing good?
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ReebokWhy is sustainable development important?
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Concept Check
1. What is meant by socialresponsibility?
A: Social responsibility means that
organizations are a part of a larger
society and are accountable to that
society for their actions.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-25
Concept Check
2. Marketing efforts to produce,promote, and reclaim environmentally
sensitive products are called
_____________.green marketing
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-26
Concept Check
3. What is a social audit?
A: A social audit is a systematic
assessment of a firms objectives,strategies, and performance in the
domain of social responsibility.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-27
DOING WELL BYDOING GOOD
GOING ONLINE
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-28
1. Visit the BSR website. Can you
update at least one example in the text
related to your chosen topic?
Going Online
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STARBUCKS CORPORATION:
SERVING MORE THAN
COFFEE
VIDEO CASE 4
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VIDEO CASE 4Starbucks
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VIDEO CASE 4Starbucks
FIGURE 1FIGURE 1 Starbucks Mission Statement and
Guiding Principles
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-32
1. How does Starbucks approach to
social responsibility relate to the three
concepts of social responsibilitydescribed in the text?
VIDEO CASE 4Starbucks
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-33
2.What role does sustainable
development play in Starbucks
approach to social responsibility?
VIDEO CASE 4Starbucks
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-34
THE FIVE MOST COMMON
KINDS OF ECONOMIC
ESPIONAGE
SUPPLEMENTALLECTURE NOTE 4-1
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-35
THE ETHICS OF
COMPETITIVE
INTELLIGENCE
IN-CLASS ACTIVITY 4-1
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-36
Fuld & Company Brochure
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-37
Ethics
Ethics are the moral principles and values
that govern the actions and decisions of
an individual or group.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-38
Laws
Laws are societys values and standards
that are enforceable in the courts.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-39
Consumer Bill of Rights (1962)
The Consumer Bill of Rights (1962)
is a law that codified the ethics of
exchange between buyers and sellers,
including the rights (1) to safety,
(2) to be informed, (3) to choose, and
(4) to be heard.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-40
Code of Ethics
A code of ethics is a formal statement of
ethical principles and rules of conduct.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-41
Whistle-blowers
Whistle-blowers are employees who
report unethical or illegal actions of their
employers.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-42
Moral Idealism
Moral idealism is a personal moral
philosophy that considers certain
individual rights or duties as universal,
regardless of the outcome.
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-43
Utilitarianism is a personal moral
philosophy that focuses on the greatest
good for the greatest number, by
assessing the costs and benefits of the
consequences of ethical behavior.
Utilitarianism
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-44
Social responsibility means that
organizations are a part of a larger society
and are accountable to that society for
their actions.
Social Responsibility
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-45
Green marketing consists of marketing
efforts to produce, promote, and reclaim
environmentally sensitive products.
Green Marketing
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Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 4-46
Cause marketing occurs when the
charitable contributions of a firm are tied
directly to the customer revenues
produced through the promotion of one of
its products.
Cause Marketing
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A social audit is a systematic assessment
of a firms objectives, strategies, and
performance in terms of social
responsibility.
Social Audit
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