1. Ethics and Social Responsibility in Marketing
Chapter 3

2. Ethical Marketing= Oxymoron?
What are ethics?
Ethics are the “moral principles and values that govern the actions and decisions of an individual or group.”
Guidelines on how to act

3. Legal v. Ethical Standards
Laws
Standards enforceable by the courts
Are laws and ethics the same thing?
Nike: Illegal? Unethical?
Causes for the increasing focus on ethics
Diverse value systems within the culture
Public groups are more active
Expectations have increased
Decrease in ethical behavior?

4. Influences upon What Is Ethical
Societal Culture and Norms
Business Culture and Industry Practices
Corporate Culture and Expectations

5. Source: www.free-stock-illustration.com
Society
Societal Culture
Levi Strauss
Societal Values
Patents
Source:

6. Businesses Business Culture Ethics of Exchange
The rules of the game in interactions between buyers and sellers, and companies
Ethics of Exchange
Caveat Emptor
Consumer Bill of Rights
To safety
To be informed
To choose
To be heard

7. Businesses Ethics of Competition Economic espionage Bribery
Costs businesses in US & Canada nearly $100 billion each year!
Bribery
Gifts, favors, etc.

8. Corporate Culture & Expectations
Code of Ethics
Formal statement listing what comprises acceptable behavior
Must be very clear
Must be equally applied throughout the organization
Whistleblowers

9. Ethical Theories Moral idealism Utilitarianism Deontological Theories
Considers certain rights as universal
Do no harm
Utilitarianism
“The greatest good for the greatest number”
Deontological Theories
“The ends justify the means”

10. Social Responsibility
Companies are accountable to society or their actions
Three types:
Profit Responsibility
Stakeholder Responsibility
Societal Responsibility
Environment
General Public

11. Societal Responsibility
Environment
Green Marketing
ISO 14000
General Public
Cause-Related Marketing

12. Public-Policy Issues Deceptive Advertising Advertising to Children
Telemarketing Fraud

13. Deceptive Advertising
“Literally false or potentially misleading”
False statements
Misleading Safety Claims
Misleading Affirmative Safety Claims
Deceptive Denials of Product Risk
Deceptive Information Omissions
Unfair Information Omissions
What about this?

14. Advertising to Children
Yes, this is real
What’s wrong with it?
Children may lack the capacity to differentiate between the program and commercial
May not understand the marketing intent
May make children want unhealthy products
Source:
Source:

15. Telemarketing Fraud Costs Americans $40 billion per year
Who is at risk?
Source: Mower & Minor. “Consumer Behavior: A Framework.” Prentice-Hall, New Jersey, 2001.

16. Compulsive Behavior
Smoking
Drinking
Gambling
Compulsive Shopping

17. Measuring Ethical Conduct
Social audit
McDonald’s
Long-term: Sustainable development
Impact of ethical behavior:
Word-of-mouth
Outperform less ethical competitors

18. Ethical Conduct- Consumers
Dishonest consumer practices
Billions of dollars lost annually
Consumers are unwilling to pay higher prices for ecologically safe products
Consumers lack information