CHAPTER ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING
NATURE of MARKETING ETHICS • Ethics –doing the“right” thing Ethical vs Legal Personal & not punishable - Societal and Punishable • Laws
UNDERSTANDING ETHICAL BEHAVIOR 1st Influence - Societal Culture and Norms • Culture dictates what is right and wrong, so “right” changes from culture to culture.
2nd Influence - Business Culture & Industry Practices - B to C • Early 1900s: Caveat Emptor • A Latin phrase meaning “let the buyer beware” - what you see is what you get, &if it’s not what you expected, too bad • Belief that competition in the marketplace corrects abuses • 1962, Kennedy’s Consumer Bill of Rights
Business Culture & Industry Practices - B to B • Ethics of Competition • Economic Espionage – stealing trade secrets • Includes trespassing, wiretapping, dumpster diving • Bribes -payment before service • Kickbacks-payment after service Both are illegal in U.S., but very common in developing nations
3rd Influence- Corporate Culture & Expectations • Corporate Culture – shown in dress codes, work space, compensation • Code of Ethics • What’s in it? (pg 85) • What if its breached? • Whistle-blowers
Personal Moral Philosophy and Ethical Behavior • Moral Idealism • There is a right thing to do, no matter what the cost • Favored by religious &consumer groups • Utilitarianism • The right thing to do is what hurts the fewest • Favored by business executives and the military
Concept of Social Responsibility • Profit Responsibility-company’s duty is to maximize profits Careful of Profiteering- shrink supply to raise price & profit • Stakeholder Responsibility-company’s duty is to protect the interests of the people who gain from it • Societal Responsibility - company’s duty is to preserve environment while reaping profit • Green Marketing
Turning the Table: Consumer Ethics and Social Responsibility • Includes: • Filing warranty claims after the period expire • Fraudulent returns of merchandise • Providing inaccurate credit information • Pirating digital content • Submitting phony insurance claims • Improper disposal of environmentally sensitive material Costs taxpayers billions each year in higher prices and premiums. Remember - “Everybody does it” is not an excuse for abuse
Concept Check 2. What are three possible reasons for the present state of ethical conduct in the United States? A: (1) Pressure on businesspeople to make decisions in a society with diverse value systems. (2) Business decisions being judged publicly by groups with different values and interests. (3) Ethical business conduct may have declined.
Concept Check 1. What rights are included in the Consumer Bill of Rights? A: The rights to safety, to be informed, to choose, and to be heard.
Concept Check 2. What is meant by moral idealism? A: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
Concept Check 1. What is meant by social responsibility? A: Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.
Concept Check 2. Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called _____________. • green marketing
Concept Check 3. What is a social audit? A: A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in the domain of social responsibility.
Ethics Ethics are the moral principles and values that govern the actions and decisions of an individual or group.
Laws Laws are society’s values and standards that are enforceable in the courts.
Consumer Bill of Rights (1962) The Consumer Bill of Rights (1962)is a law that codified (standardized what was not previously written down) the ethics of exchange between buyers and sellers. It includes the buyers rights: (1) to safety (2) to be informed (3) to choose, and (4) to be heard.
Code of Ethics A code of ethics is a formal statement of ethical principles and rules of conduct.
Whistle-blowers Whistle-blowers are employees who report unethical or illegal actions of their employers.
Moral Idealism Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
Utilitarianism Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number,” by assessing the costs and benefits of the consequences of ethical behavior.
Social Responsibility Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.
Green Marketing Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.