© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING 4 4 C HAPTER

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 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. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Distinguish among the different concepts of ethics and social responsibility. Recognize the importance of ethical and socially responsible consumer behavior. AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin THERE IS MORE TO ANHEUSER-BUSCH THAN MEETS THE PALATE ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Ethical/Legal Framework in Marketing  Laws Laws NATURE AND SIGNIFICANCE OF MARKETING ETHICSETHICS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Current Perceptions of Ethical Behavior NATURE AND SIGNIFICANCE OF MARKETING ETHICS

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Ethics are the moral principles and values that govern the actions and decisions of an individual or group. Ethics

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Laws are society’s values and standards that are enforceable in the courts. Laws

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What are ethics? A: Ethics are the moral principles 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.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. What are four possible reasons for the present state of ethical conduct in the United States? A: (1) Increased pressure on business people to make decisions in a society characterized by diverse value systems, (2) Growing tendency for business decisions to be judged publicly by groups with different values and interests, (3) Public’s expectations of business ethical behavior has increased, and (4) Ethical business conduct may have declined.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Societal Culture and Norms Business Culture and Industry Practice Ethics of Exchange  Caveat emptor Caveat emptor  Consumer bill of rights Consumer bill of rights Ethics of Competition  Economic espionage Economic espionage UNDERSTANDING ETHICAL MARKETING BEHAVIOR

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Caveat emptor is a legal concept which means let the buyer beware. Caveat Emptor

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The consumer bill of rights codified the rights to safety, to be informed, to choose, and to be heard. Consumer Bill of Rights

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors. Economic Espionage

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Corporate Culture and Expectations Codes of Ethics Ethical Behavior of Top Management and Co-Workers  Whistleblowers Whistleblowers UNDERSTANDING ETHICAL MARKETING BEHAVIOR

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Personal Moral Philosophy and Ethical Behavior Moral Idealism Utilitarianism UNDERSTANDING ETHICAL MARKETING BEHAVIOR

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A code of ethics is a formal statement of ethical principles and rules of conduct. Code of Ethics

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Whistleblowers are employees who report unethical or illegal actions of their employers. Whistleblowers

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome. Moral Idealism

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number.” Utilitarianism

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What rights are included in the Consumer Bill of Rights? A: The rights to safety, to be informed, to choose, and to be heard.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 2. Economic espionage includes what kinds of activities? A: Economic espionage is the clandestine collection of trade secrets of proprietary information about a company’s competitors.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. What is meant by moral idealism? A: It is a personal moral philosophy that considers certain individual rights or duties as universal regardless of outcome.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concepts of Social ResponsibilitySocial Responsibility UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concepts of Social Responsibility (cont)Social Responsibility Profit Responsibility Stakeholder Responsibility Societal Responsibility  Green marketing Green marketing  ISO ISO  Cause-related marketing Cause-related marketing UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions Social Responsibility

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Green marketing efforts are designed to produce, promote, and reclaim environmentally sensitive products. Green Marketing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin ISO consists of worldwide standards for environmental quality and green marketing practices. ISO 14000

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Cause-Related 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-Related Marketing

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Social Audit: Doing well by Doing GoodSocial Audit  Sustainable development Sustainable development Turning the Table: Consumer Ethics and Social Responsibility UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in the domain of social responsibility. Social Audit

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Sustainable development involves conducting business in a way that protects the natural environment while making economic progress. Sustainable Development

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 1. What is meant by social responsibility? A: Social responsibility means that organizations are part of a larger society and they are accountable to that society for their actions.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin 2. Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called _______________. green marketing Concept Check

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Concept Check 3. What is a social audit? A: A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in the domain of social responsibility.