Ethics and Social Ethics and Social Responsibility in MarketingResponsibility in Marketing

Chapter 3Chapter 3

Ethical Marketing= Ethical Marketing= Oxymoron?Oxymoron?

What are ethics?What are ethics? Ethics are the “moral principles and Ethics are the “moral principles and

values that govern the actions and values that govern the actions and decisions of an individual or group.”decisions of an individual or group.”

Legal v. Ethical StandardsLegal v. Ethical Standards

LawsLaws Standards enforceable by the courtsStandards enforceable by the courts Are laws and ethics the same thing?Are laws and ethics the same thing?

Nike: Illegal? Unethical?Nike: Illegal? Unethical?

Causes for the increasing focus on ethicsCauses for the increasing focus on ethics Diverse value systems within the cultureDiverse value systems within the culture Public groups are more activePublic groups are more active Expectations have increasedExpectations have increased Decrease in ethical behavior?Decrease in ethical behavior?

Influences upon What Is Influences upon What Is EthicalEthical

Societal Culture and NormsSocietal Culture and Norms Business Culture and Industry Business Culture and Industry

PracticesPractices Corporate Culture and ExpectationsCorporate Culture and Expectations

SocietySociety

Societal CultureSocietal Culture Levi StraussLevi Strauss

Societal ValuesSocietal Values PatentsPatents

Source: www.free-stock-illustration.com

BusinessesBusinesses

Business CultureBusiness Culture The rules of the game in interactions The rules of the game in interactions

between buyers and sellers, and between buyers and sellers, and companiescompanies

Ethics of ExchangeEthics of Exchange Caveat EmptorCaveat Emptor Consumer Bill of RightsConsumer Bill of Rights

BusinessesBusinesses

Ethics of Ethics of CompetitionCompetition Economic Economic

espionageespionage Costs businesses in Costs businesses in

US & Canada nearly US & Canada nearly $100 billion each $100 billion each year!year!

BriberyBribery Gifts, favors, etc.Gifts, favors, etc.

Corporate Culture & Corporate Culture & ExpectationsExpectations

Code of EthicsCode of Ethics Formal statement listing what comprises Formal statement listing what comprises

acceptable behavioracceptable behavior Must be very clearMust be very clear Must be equally applied throughout the Must be equally applied throughout the

organizationorganization WhistleblowersWhistleblowers

Ethical TheoriesEthical Theories

Moral idealismMoral idealism Considers certain rights as universalConsiders certain rights as universal

Do no harmDo no harm

UtilitarianismUtilitarianism ““The greatest good for the greatest The greatest good for the greatest

number”number” Deontological TheoriesDeontological Theories

““The ends justify the means”The ends justify the means”

Social ResponsibilitySocial Responsibility

Companies are accountable to Companies are accountable to society or their actionssociety or their actions

Three types:Three types: Profit ResponsibilityProfit Responsibility Stakeholder ResponsibilityStakeholder Responsibility Societal ResponsibilitySocietal Responsibility

EnvironmentEnvironment General PublicGeneral Public

Societal ResponsibilitySocietal Responsibility

EnvironmentEnvironment Green MarketingGreen Marketing ISO 14000ISO 14000

General PublicGeneral Public Cause-Related Cause-Related

MarketingMarketing

Public-Policy IssuesPublic-Policy Issues

Deceptive AdvertisingDeceptive Advertising Advertising to ChildrenAdvertising to Children Telemarketing FraudTelemarketing Fraud

Source: Mower & Minor. “Consumer Behavior: A Source: Mower & Minor. “Consumer Behavior: A Framework.” Prentice-Hall, New Jersey, 2001.Framework.” Prentice-Hall, New Jersey, 2001.

Deceptive AdvertisingDeceptive Advertising

““Literally false or potentially misleading”Literally false or potentially misleading” False statementsFalse statements Misleading Safety ClaimsMisleading Safety Claims

Misleading Affirmative Safety ClaimsMisleading Affirmative Safety Claims Deceptive Denials of Product RiskDeceptive Denials of Product Risk Deceptive Information OmissionsDeceptive Information Omissions Unfair Information OmissionsUnfair Information Omissions

Source: Mower & Minor. “Consumer Behavior: A Framework.” Source: Mower & Minor. “Consumer Behavior: A Framework.” Prentice-Hall, New Jersey, 2001.Prentice-Hall, New Jersey, 2001.

Advertising to ChildrenAdvertising to Children

What’s wrong with it?What’s wrong with it?

Source: www.adstrategy.wordpress.comSource: www.wikipedia.org

Yes, this is real

Telemarketing FraudTelemarketing Fraud

Costs Americans $40 Costs Americans $40 billion per yearbillion per year

Who is at risk?Who is at risk?

Source: Mower & Minor. Source: Mower & Minor. “Consumer Behavior: A “Consumer Behavior: A Framework.” Prentice-Hall, New Framework.” Prentice-Hall, New Jersey, 2001.Jersey, 2001.

Compulsive BehaviorCompulsive Behavior

SmokingSmoking DrinkingDrinking GamblingGambling Compulsive ShoppingCompulsive Shopping

Source: Mower & Minor. “Consumer Behavior: A Framework.” Source: Mower & Minor. “Consumer Behavior: A Framework.” Prentice-Hall, New Jersey, 2001.Prentice-Hall, New Jersey, 2001.

Measuring Ethical ConductMeasuring Ethical Conduct

Social auditSocial audit McDonald’s McDonald’s

Long-term: Sustainable developmentLong-term: Sustainable development

Impact of ethical behavior:Impact of ethical behavior: Word-of-mouthWord-of-mouth Outperform less ethical competitorsOutperform less ethical competitors

Ethical Conduct- ConsumersEthical Conduct- Consumers

Dishonest consumer practicesDishonest consumer practices Billions of dollars lost annuallyBillions of dollars lost annually

Consumers are unwilling to pay Consumers are unwilling to pay higher prices for ecologically safe higher prices for ecologically safe productsproducts

Consumers lack informationConsumers lack information