1. Marketing and Society: Social Responsibility and Marketing Ethics
Chapter 16
Marketing and Society: Social Responsibility and Marketing Ethics

2. Road Map: Previewing the Concepts
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.

3. Marketing’s Impact on Individual Consumers
High Prices
Deceptive Practices
High-Pressure Selling
Criticisms Leveled at the Marketing Function by Consumers, and Others
Shoddy, Unsafe Products
Planned Obsolescence
Poor Service to Some

4. Marketing’s Impact on Individual Consumers: High Prices
High Prices Caused by the Following Factors
High
Costs of
Distribution
High
Advertising
and
Promotion
Costs
Excessive
Markups

5. Marketing’s Impact on Individual Consumers: Deceptive Practices
Pricing
Falsely Advertising “Factory” or “Wholesale” Prices, Large Reduction
From Phony High List Price
Deceptive
Promotion
Overstating the Product’s Features, Luring Customers to the Store for Out-of-Stock Bargains, etc.
Deceptive
Packaging
Exaggerating Package Contents, Not Filling Package to the Top, Using Misleading Labeling

6. Marketing’s Impact on Individual Consumers
High-Pressure Selling
Some products – such as cars and jewelry – are said to be sold, not bought.
Such tactics damage marketer’s long-run relationship with customers.
Shoddy or Unsafe Products
Complaint that many products are not made well.
Second, many products deliver little benefit.
Third, concerns product safety.

7. American Association of Advertising Agencies
This ad demonstrates that advertising can’t make consumers buy things that they don’t need despite high-pressure selling.

8. Marketing’s Impact on Individual Consumers
Planned Obsolescence
Change consumer concepts of acceptable styles.
Hold back attractive functional features.
May break, wear, rust, or rot sooner than should.
Poor Service to Disadvantaged Consumers
May pay more for inferior goods.
“Redlining” may occur where major chain retailers avoid placing stores in disadvantaged neighborhoods.

9. Marketing’s Impact on Society as a Whole
False Wants & Too
Much Materialism
Producing Too Few
Social Goods
Marketing’s Perceived
Negative Impact on
Society as a
Whole
Cultural Pollution
Too Much Political
Power

10. Marketing’s Impact on Other Businesses
Acquisitions of Competitors
Marketing Practices Create Barriers to Entry
Unfair Competitive Marketing Practices
All Can Harm Other Companies & Reduce Competition

11. Consumerism
Consumerism is an Organized Movement of Citizens and Government Agencies to Improve the Rights and Power of Buyers in Relation to Sellers.
Buyers’
Rights
Sellers’

12. Consumerism – Buyers’ Rights
The Right Not to Buy a Product Offered for Sale
The Right to Expect the Product to be Safe
The Right to Expect the Product to Perform as Claimed
The Right to Be Protected Against Questionable Products
The Right to Be Heard About “Quality of Life” Issues
The Right to Be Well Informed About the Product

13. Environmentalism Have a Practice Sustainability Pollution Vision
Prevention
Plan for New
Environmental
Technologies
Practice
Product
Stewardship
Adopt Design
for the
Environment
Practices

14. Major Legal Issues Facing Marketing Management (Fig. 16-2)

15. Enlightened Marketing
Consumer-Oriented Marketing
Holds That a Company’s Marketing Should Support the Best Long-Run Performance of the Marketing System.
Innovative Marketing
Value Marketing
Sense-of-Mission Marketing
Societal Marketing

16. Societal Classification of Products (Fig. 16-3)

17. Discussion Question
Compare the marketing concept with the principle of societal marketing.
Should all marketers adopt the societal marketing concept? Why or why not?
The marketing concept can be expressed as "find a need and fill it, at a profit." The societal marketing concept is more elaborate: "find a need and fill it, at a profit, taking into account the consumer's and society's long-run interests." On the surface, the societal marketing concept appears so reasonable that every company should immediately adopt it. Yet, there are both philosophical and pragmatic objections to this concept. The philosophical objection is that this practice has businesspeople substituting their perceptions of what is in the social good, for consumers' perceptions or the views of elected policymaking officials. The pragmatic objection is that marketing managers have no special expertise in defining and acting in the public interest. Marketers may not foresee the unintended consequences of their "socially responsible" actions. For example, when a cereal manufacturer reduces a product's sugar content to save children's teeth, the result may be a substitution of even sweeter and less nutritious breakfast products rather than a reduction in cavities.
Unfortunately, like most matters of social responsibility in marketing, this question is not as clear-cut as arguments suggest. Are marketers supposed to ignore consumers' and society's long-run interests? Even if consumers are willing to ignore product hazards, is it moral to sell the products to them? Is the correct philosophy “give ‘em what they want” or “let the buyer beware?”

18. Marketing Ethics
Companies Need to Develop Corporate Marketing Ethics Policies – Broad Guidelines That Everyone in the Organization Must Follow and Should Address:
Distributor Relations
Advertising Standards
Customer Service
Pricing
Product Development
General Ethical Standards

19. Marketing Ethics
Principles That Should Guide Companies and Marketing Managers On Issues of Ethics and Social Responsibility:
Decided by the
Free Market and
Legal System
Responsibility of
Individual
Companies
And Managers

20. Interactive Student Assignments
Form students into groups of three to five. Each group should focus on the following scenario.
You are the marketing manager for a small kitchen appliance firm. While conducting field tests, you discover a design flaw in one of your popular appliances that could potentially be harmful to a small number of your customers. However, a product recall would likely bankrupt your company and cause all of the employees (including yourself) to lose their jobs. What would you do? Explain.
Students will find this question a difficult task. Most instructors prefer to divide the students into groups, make the assignment and then discuss the answers in class. The unusual fact about this question is the number of students who will recommend doing nothing or covering up. The question is presented in a difficult way just to demonstrate this fact. As indicated in the chapter (and as a general philosophy in this textbook), there is always a right answer--even if the answer is very difficult. Is saving a life worth a bankruptcy? What is the small number of consumers harmed were unsuspecting children or disabled seniors? Or what is the potential harm was only to those who did not carefully read operating instructions or were left-handed? Would this make the decision less difficult than with the case of children or seniors? Is degree often used as an excuse? Probably so. Only the student and their personal moral and ethical values can answer that question. For additional thought situations see Table 16-1 and Table 16-2.

21. Rest Stop: Reviewing the Concepts
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.