Marketing Ethics and Social Responsibility Chapter Sixteen Marketing Ethics and Social Responsibility

Identify the major social criticisms of marketing. 4/17/2017 Identify the major social 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. Copyright 2007, Prentice Hall, Inc. Copyright 2005 Brainy Betty, Inc.

Nike – Socially Responsible? Case Study Nike – Socially Responsible? Background Nike has been heavily criticized for NOT being socially responsible. Accusation: use of sweatshops and child labor overseas, and horrible working conditions. Accusation: targeting low-income families by making shoes an expensive status symbol for poor urban street kids. Behavior Code of conduct and six-point plan ensures more socially responsible labor practices & commissioned an independent study of Nike factories abroad. Created a huge social responsibility department and publishes CRS report. Donates more than $37 million to sports programs and 3% of earnings to charity. Copyright 2007, Prentice Hall, Inc.

Criticisms of Marketing High prices Deceptive practices High-pressure selling Shoddy, harmful, or unsafe products Planned obsolescence Poor service to disadvantaged consumers Copyright 2007, Prentice Hall, Inc.

High Prices Caused by: High costs of distribution High advertising and promotion costs Excessive markups Copyright 2007, Prentice Hall, Inc.

Deceptive Practices Deceptive Pricing: Deceptive Promotion: Falsely advertising “factory” or “wholesale” prices or large reductions from phony high retail list prices. Deceptive Promotion: Overstating a product’s features or performance, running rigged contests. Deceptive Packaging: Exaggerating package contents through subtle design, using misleading labeling, etc. Copyright 2007, Prentice Hall, Inc.

High-Pressure Selling Salespeople are trained to deliver smooth, canned talks to entice purchase. High-pressure selling persuades people to buy goods they had no intention of buying. High-pressure selling can occur because of prizes going to top sellers. High-pressure selling is not good for long-term relationships. Copyright 2007, Prentice Hall, Inc.

Shoddy or Unsafe Products Includes: Products that are not made well or services that are not performed well. Products that deliver little benefit or that may even be harmful. Unsafe products due to manufacturer indifference, increased production complexity, poorly trained labor, and poor quality control. Copyright 2007, Prentice Hall, Inc.

Planned Obsolescence Refers to: Products needing replacement before they should because they are obsolete. Producers who change consumer concepts of acceptable styles. Intentionally holding back attractive functional features, then introducing them later to make old model obsolete. Copyright 2007, Prentice Hall, Inc.

Poor Service to Disadvantaged Consumers Disadvantaged consumers are served poorly when: Poor are forced to shop in smaller stores where they pay more for inferior goods. “Redlining” by national chain stores occurs in disadvantaged neighborhoods. Redlining charges have also been leveled against insurers, banking, health care providers and other industries. Poor are targeted for “rapid refunds.” Copyright 2007, Prentice Hall, Inc.

Marketing’s Impact on Society as a Whole False wants and too much materialism Producing too few social goods Cultural pollution Too much political power Copyright 2007, Prentice Hall, Inc.

Marketing’s Impact on Other Businesses Critics charge that a firm’s marketing practices can harm other companies and reduce competition. Acquisitions of competitors. Marketing practices that create barriers to entry. Unfair competitive marketing practices. Copyright 2007, Prentice Hall, Inc.

Consumerism Consumerism is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers. Copyright 2007, Prentice Hall, Inc.

Sellers’ Rights The right to . . . introduce any product in any size and style, provided it is not hazardous to personal health or safety; or, if it is, to include proper warnings and controls. charge any price for the product, provided no discrimination exists among similar kinds of buyers. spend any amount to promote the product, provided it is not defined as unfair competition. use any product message, provided it is not misleading or dishonest in content or execution. use any buying incentive schemes, provided they are not unfair or misleading. Copyright 2007, Prentice Hall, Inc.

Buyers’ Rights The right to: not buy a product that is offered for sale. expect the product to be safe. expect the product to perform as claimed. be well informed about important aspects of the product. be protected against questionable products and marketing practices. influence products and marketing practices in ways that will improve “quality of life.” Copyright 2007, Prentice Hall, Inc.

Environmentalism An organized movement of concerned citizens and government agencies to protect and improve people’s living environment. Copyright 2007, Prentice Hall, Inc.

Environmental Sustainability A management approach that involves developing strategies that both sustain the environment and produce profits for the company. Levels of environmental sustainability: Pollution prevention Product stewardship New environmental technologies Sustainability vision Copyright 2007, Prentice Hall, Inc.

Enlightened Marketing A marketing philosophy holding that a company’s marketing should support the best long-run performance of the marketing system. Customer-oriented marketing Innovative marketing Customer-value marketing Sense-of-mission marketing Societal marketing Copyright 2007, Prentice Hall, Inc.

Enlightened Marketing Consumer-Oriented Marketing: The philosophy of enlightened marketing that holds that the company should view and organize its marketing activities from the consumer’s point of view. Copyright 2007, Prentice Hall, Inc.

Enlightened Marketing Innovative Marketing: A principle of enlightened marketing that requires that a company seek real product and marketing improvements. Copyright 2007, Prentice Hall, Inc.

Enlightened Marketing Customer-Value Marketing: A principle of enlightened marketing that holds that a company should put most of its resources into value-building marketing investments. Copyright 2007, Prentice Hall, Inc.

Enlightened Marketing Sense-of-Mission Marketing: A principle of enlightened marketing that holds that a company should define its mission in broad social terms rather than narrow product terms. Copyright 2007, Prentice Hall, Inc.

Enlightened Marketing Societal Marketing: A principle of enlightened marketing that holds that a company makes marketing decisions by considering consumers’ wants and interests, the company’s requirements, and society’s long-run interests. Seeks to introduce desirable products, rather than those that are deficient, displeasing, or salutary. Copyright 2007, Prentice Hall, Inc.

Marketing Ethics Corporate Marketing Ethics Policies: Broad guidelines that everyone in the organization must follow. These should cover: Distributor relations Advertising standards Customer service Pricing Product development General ethical standards Copyright 2007, Prentice Hall, Inc.

Marketing Ethics What principle should guide companies and marketing managers on issues of ethics and social responsibility? Free market and legal system Responsibility falls to individual companies and managers International marketers face special challenges Copyright 2007, Prentice Hall, Inc.

Identify the major social criticisms of marketing. 4/17/2017 Identify the major social 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. Copyright 2007, Prentice Hall, Inc. Copyright 2005 Brainy Betty, Inc.