1. Marketing Ethics and Social Responsibility
Dr. Ananda Sabil Hussein

2. The Role of Ethics and Social Responsibility in Marketing Strategy
Grown in importance recently
Due to firms having problems in this area
Have become necessities due to:
Stakeholder demands
Changes in Federal law
Improve marketing performance and profits
Are important to development of marketing strategy

3. Dimensions of Social Responsibility
A broad concept that relates to an organization’s obligation to maximize its positive impacts on society while minimizing its negative impacts
Marketing Ethics
Principles and standards that define acceptable marketing conduct as determined by the public, government regulators, private interest groups, competitors, and the firm itself

4. The Pyramid of Corporate Social Responsibility
Exhibit 3.1

5. Social Responsibility
Includes:
Economic responsibility of making a profit
Legal responsibility of obeying laws and regulations
Ethical responsibility to uphold principals and standards
Philanthropic responsibility to increase the firm’s positive impact on society

6. Marketing Ethics and Strategy
Requires that organizations and individuals accept responsibility
Can lead to violations of public trust
Involves complex and detailed decisions in gray areas
Deals with experiences and decisions made at work
Comes into play anytime individuals feel manipulated or cheated

7. Potential Ethical Issues in Marketing
Overall Issues
Product Issues
Pricing Issues
Distribution Issues
Promotion Issues
See Exhibit 3.2 in Text

8. The Challenges of Being Ethical and Socially Responsible
Business decisions involve complex decisions in which correctness may not be clear cut
e.g. Internet privacy, protecting trademarks and brand names
Ethical conflict may emerge from an inconsistency between personal values and the values held by members of the work group
Ethical issues can develop into legal problems

9. Types of Misconduct Observed in Organizations
Exhibit 3.4

10. Deceptive Practices in Marketing
Deceptive Communications and Promotion
Fraud or any false communication
Exaggerated claims or statements
Ambiguous statements
Product labeling issues
Selling abuses
Regulating Deceptive Marketing Practices
Typically regulated by:
The firms themselves
Industry and trade associations

11. Organizational Determinants of Marketing Ethics & Social Responsibility
Ethical Decision Making
Determined by an individual’s background and business colleagues
Affected by personal values, opportunity for unethical behavior, and exposure to others
Intricately tied to the firm’s culture and ethical climate
Can only be improved by planning and structure
Likely to occur when modeled by a strong leader

12. Ethical Climate
Part of a corporate culture that relates to an organization’s expectations about appropriate conduct
The character component of an organization
Sets the tone for ethical decisions
Determines whether or not an individual perceives an issue to be an ethical issue

13. Codes of Conduct (1 of 2) Codes of Conduct (Codes of Ethics)
Formal statement that describes what an organization expects of its employees
Not an effective means of controlling ethical behavior unless integrated into daily decision making
Not effective unless the code has support of top management

14. Codes of Conduct (2 of 2)
Codes must reflect management’s desire for compliance with values, rules, and policies
Codes should have six core values:
Trustworthiness
Respect
Responsibility
Fairness
Caring
Citizenship
Codes will not resolve every issue encountered in daily operations
Codes can help managers deal with ethical dilemmas

15. Key Considerations in Developing and Implementing a Code of Ethical Conduct
Exhibit 3.5

16. Texas Instruments’ “Ethics Quick Test”
Is the action legal?
Does it comply with our values?
If you do it, will you feel bad?
How will it look in the newspaper?
If you know it’s wrong, don’t do it!
If you’re not sure, ask.
Keep asking until you get an answer.

17. Market Orientation Market Orientation
The development of an organizational culture that effectively and efficiently promotes the necessary behaviors for the creation of superior value for buyers and, thus, continuous superior performance of the firm.
Strongly tied to ethics and social responsibility
Means fostering a sense of cooperation and information exchange

18. Stakeholder Orientation
The degree to which a firm understands and addresses stakeholder demands
Strongly tied to ethics and social responsibility
Comprised of three activities:
Generation of stakeholder groups data and assessment of firm effects on these groups
Distribution of this information throughout the firm
Responsiveness as a whole to this intelligence

19. Connecting Ethics & Social Responsibility to Marketing Performance
Strong ethics causes employees to be:
Motivated to serve customers
Committed to the firm
Committed to high quality standards
Satisfied with their job
Can lead to trust among firm’s stakeholders
Is so important that it can have major negative impacts on firms that don’t uphold ethical standards

20. The Connection Between Ethics and Strategic Planning
Typically done through ethical compliance programs or integrity initiatives
Vested in the marketing plan
Based on an understanding of:
1) Risks associated with misconduct
2) Ethical and social consequences of strategy
3) Values of organizational members and stakeholders
Manifested through actions … not just words