2. DECISION MAKING IN THE NEW ERA OF MARKETING: ENRICHING THE MARKETING ENVIRONMENT CHAPTER 3

3. WELCOME TO THE NEW ERA OF MARKETING Marketing is still concerned with the firm’s bottom line, but now many managers also consider social profit, which is the net benefit both the firm and society receive from a firm’s ethical practices and socially responsible behavior. What about the NFL? Ray Rice and domestic abuse Ray Lewis commenting on ESPN Questions relating to the severity of offenses and punishments Consequences for the NFL …

4. DECISION MODEL FOR FIRMS IN THE NEW ERA OF MARKETING

5. DOING IT RIGHT: ETHICAL BEHAVIOR IN THE MARKETPLACE Business ethics are rules of conduct for an organization. Codes of Ethics are written standards of behavior to which everyone in the organization must subscribe. Unethical behavior in the marketplace can lead to high costs both: financially, and to a firm’s reputation.

6. HOW ARE ETHICS INCORPORATED? Laws often incorporate ethical rules and guidelines Formal and Informal groups can prescribe codes relating to acceptable behavior (AMA) Self-regulation involves the voluntary acceptance of standards established by nongovernmental entities such as AMA The Media can play an important role in informing the public of actions by individuals or organizations that are good or bad … which are better ratings grabbers? i.e. NFL Society helps mold individual and corporate behavior … Walmart and NYC; Arizona boycott and MLK Day

7. ETHICAL BEHAVIOR Ethics are the standard of behavior by which one’s conduct is viewed. Unwritten rules – fairness and justice Reclining a chair on a flight When are laws applicable? What is the role of the airline

8. CONSUMERISM: FIGHTING BACK Consumerism is the Social Movement Directed Toward Protecting Consumers from Harmful Business Practices. Consumer Bill of Rights Right to Be Safe Right to Be Informed Right to Be Heard Right to Choose Freely

9. ETHICS IN THE MARKETING MIX Making a Product Safe Making a Product Safe Pricing the Product Fairly Pricing the Product Fairly Promoting the Product Ethically Promoting the Product Ethically Getting the Product Where itBelongs Getting the Product Where itBelongs

10. ETHICAL THEORIES Deontological Theory The ethical theory that people should adhere to their obligations and duties when analyzing an ethical dilemma. You have a relative killed by a drunk driver. You work for an ad agency that just gets a contract from A-B … http://mashable.com/20 14/09/22/budweisers- drinking-driving-puppy- ad/ Utilitarianism Ability to predict the consequences of an action Two types Act utilitarianism – person performs the act that benefits them the most Rule utilitarianism – take into account the law and shows concern for fairness.

11. ETHICAL THEORIES Casuist Ethical Theory Compares a current ethical dilemma with example of similar ethical experiences and their outcome Is there a reasonable equivalent example? Moral relativism Theory of time and place ethics. Ethical truths are dependent on the individuals and groups that hold them No absolute set of beliefs Virtue ethics – solve ethical dilemmas when you develop and nurture virtues i.e., trust, responsibility, honesty, determination, humility

12. DOING IT RIGHT: A FOCUS ON SOCIAL RESPONSIBILITY Social responsibility is a management practice in which organizations engage in activities that have a positive effect on society and promote the public good.

13. ENVIRONMENTAL STEWARDSHIP......is a position taken by an organization to protect or enhance the natural environment as it conducts its business activities. Green Marketing is a marketing strategy that supports environmental stewardship by creating an environmentally founded differential benefit in the minds of consumers. Example: recycling.

14. SOCIAL RESPONSIBILITY Serving Society: Cause Marketing Cause Marketing is a strategy of joining forces with a not-for-profit organization to tackle a social problem such as: illiteracy, child abuse, breast cancer. Organizations hope that this involvement will result in benefits for the cause and increased good will for the organization.

15. SOCIAL RESPONSIBILITY Serving the Community: Promoting Cultural Diversity Cultural Diversity is a practice that actively seeks to include people of all different sexes, races, ethnic groups, and religions in an organization’s employees, customers, suppliers, and distribution channel partners. Practice is important to the long-term financial health of the organization.

16. LEGAL ENVIRONMENT The legal environment is the local, state, national, and global laws and regulations that affect businesses. U.S. laws governing business have two purposes: ensure that businesses compete fairly with each other, ensure that businesses don’t take advantage of consumers. Regulatory agencies monitor business activities.

17. SOCIOCULTURAL ENVIRONMENT This includes the characteristics of the: society, and people who live in that society, and Demographics include such observable aspects as size, age, gender, ethnic group, income, education and others. culture that reflects the values and beliefs of the society.

18. CENTRAL ISSUES OF ETHICS AND ADVERTISING Advocacy Accuracy Acquisitiveness

19. CRITICISMS OF ADVERTISING Short-term manipulative arguments Focusing on style of advertising Targeting Kids, Teens and the Elderly Long-term macro arguments Focus on the social or environmental impact of advertising Complete information Deception Absence of externalities Social costs

20. TARGETING KIDS AND TEENS Concerns about realistic expectations and understanding advertising Food and Beverages Childhood Obesity – fat, sugar, caffeine Surge and Coca Cola Healthful Choices (McDonald’s) Media choices … Saturday morning TV

21. ETHICS AND SIN PRODUCTS Tobacco and Alcohol Products Budweiser – the “fur factor” Cigarette products such as Dakota, product placement in movies and TV

22. WHAT DO YOU THINK? TOBACCO ETHICS AND ADVERTISING

23. ETHICS AND TOBACCO Tobacco and Alcohol Products Budweiser – the “fur factor” Cigarette products such as Dakota, product placement in movies and TV

24. CIGARETTE CONTROVERSIES

25. CELEBRITY AND SEXISM CONCERNS

26. TARGETING THE ELDERLY Susceptible to Fear ads Mortality Financial concerns Illness and Dependence Is targeting unethical, good marketing or both??

27. ADVERTISING AND THE ELDERLY

28. SOCIALLY RESPONSIBLE ADS

29. SOCIALLY RESPONSIBLE

30. ETHICAL ISSUES IN ADVERTISING 2/3 of Americans think advertising is often untruthful Deceptive advertising harms consumers Labeling is a tool to help reduce potential deception Advertising is Manipulative and Makes People BUY! Causes ‘wants’ Encourages materialism Subliminal ads attempt to subvert conscious decisions

31. GUIDELINES TO ETHICAL ADVERTISING Truthful Substantiate Claims Refrain from False Comparisons no bait! explicit guarantees no false price claims competent witnesses tasteful and decent

32. THE MARKETING ENVIRONMENT Remember your external situation analysis Economy Marketplace Competition Customer Technology Socioeconomic factors Government Regulatory agencies i.e., FDA, FTC, SEC Customers Gen X 1965-1978 Generation “ME” Gen Y 1979-1994 More ethically diverse 36% family financial help underemployed Baby Boomers 1946 – 1964 Millenials or New Boomers 1983-2001 Civic minded Narcissistic