Marketing and Marketing and Society: Social Society: Social

Responsibility and Responsibility and Marketing EthicsMarketing Ethics

Chapter 20Chapter 20

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Objectives

• Know the major social criticisms of Know the major social criticisms of marketing.marketing.

• Be able to define consumerism and Be able to define consumerism and environmentalism and know how environmentalism and know how they affect marketing strategies.they affect marketing strategies.

• Learn the principles of socially Learn the principles of socially responsible marketing.responsible marketing.

• Learn the role of ethics in Learn the role of ethics in marketing.marketing.

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• Only used organic Only used organic fruits and fruits and hormone-free milk hormone-free milk

• Bought from Bought from socially socially disadvantaged disadvantaged and minority and minority supplierssuppliers

• Donated 7.5% of Donated 7.5% of pretax profits to pretax profits to good causesgood causes

• Natural-ingredient Natural-ingredient based cosmetics based cosmetics formulated without formulated without animal testinganimal testing

• Donated a Donated a percentage of percentage of profits to animal-profits to animal-rights groups and rights groups and homeless sheltershomeless shelters

Ben & Jerry’s ... The Body Ben & Jerry’s ... The Body ShopShop

Case Study

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• Growth and profits Growth and profits flattened for both flattened for both firms in the 1990’sfirms in the 1990’s

• 2000: Ben & 2000: Ben & Jerry’s was Jerry’s was acquired by acquired by Unilever; profit Unilever; profit driven driven management is management is now in charge of now in charge of the Body Shop.the Body Shop.

• Lessons learned: Lessons learned: What you sell is What you sell is

importantimportant Be proud to be in Be proud to be in

business business Make a solid Make a solid

commitment to commitment to change change

Focus on two Focus on two bottom linesbottom lines

Forget the hype Forget the hype

Ben & Jerry’s ... The Body Ben & Jerry’s ... The Body ShopShop

Case Study

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Social Criticisms of Marketing

• Marketing’s Impact on Marketing’s Impact on Individual ConsumersIndividual Consumers High PricesHigh Prices

High costs of distributionHigh costs of distribution High advertising and promotion High advertising and promotion

costscosts Excessive markupsExcessive markups

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Social Criticisms of Marketing

• Marketing’s Impact on Marketing’s Impact on Individual ConsumersIndividual Consumers Deceptive PracticesDeceptive Practices

Pricing Pricing PromotionPromotion PackagingPackaging

High-Pressure SellingHigh-Pressure Selling

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Social Criticisms of Marketing

• Marketing’s Impact on Marketing’s Impact on Individual ConsumersIndividual Consumers Shoddy or Unsafe ProductsShoddy or Unsafe Products Planned ObsolescencePlanned Obsolescence Poor Service to Disadvantaged Poor Service to Disadvantaged

ConsumersConsumers

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Social Criticisms of Marketing

• Marketing’s Impact on Society Marketing’s Impact on Society as a Wholeas a Whole False Wants and Too Much False Wants and Too Much

MaterialismMaterialism Too Few Social GoodsToo Few Social Goods Cultural PollutionCultural Pollution Too Much Political PowerToo Much Political Power

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Social Criticisms of Marketing

• Marketing’s Impact on Other Marketing’s Impact on Other BusinessesBusinesses Acquisitions of CompetitorsAcquisitions of Competitors Marketing PracticesMarketing Practices Creating Barriers to EntryCreating Barriers to Entry

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Citizen & Public Actions to Regulate

Marketing• ConsumerismConsumerism

Traditional Seller’s RightsTraditional Seller’s Rights Traditional Buyer’s RightsTraditional Buyer’s Rights Additional Rights Proposed by Additional Rights Proposed by

Consumer AdvocatesConsumer Advocates Each proposed right has led to more Each proposed right has led to more

specific proposals by consumerists specific proposals by consumerists

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Citizen & Public Actions to Regulate

Marketing• EnvironmentalismEnvironmentalism

Environmental SustainabilityEnvironmental Sustainability Pollution preventionPollution prevention Product stewardshipProduct stewardship New environmental technologyNew environmental technology Sustainability visionSustainability vision

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Citizen & Public Actions to Regulate

Marketing• Public Actions to Regulate Public Actions to Regulate

MarketingMarketing Major legal issues affect every area of Major legal issues affect every area of

marketing management, including:marketing management, including: Selling and advertising decisionsSelling and advertising decisions Channel decisionsChannel decisions Product decisionsProduct decisions Packaging decisionsPackaging decisions Price decisionsPrice decisions Competitive reaction decisionsCompetitive reaction decisions

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Enlightened MarketingEnlightened Marketing

Business Actions Toward Socially

Responsible Marketing

• Consumer-Consumer-Oriented Oriented MarketingMarketing

• Innovative Innovative MarketingMarketing

• Value MarketingValue Marketing

• Societal Societal MarketingMarketing

• Sense-of-Mission Sense-of-Mission MarketingMarketing

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Business Actions Toward Socially

Responsible Marketing• Enlightened MarketingEnlightened Marketing

Customer-Oriented Marketing:Customer-Oriented Marketing: Companies view and organize their marketing Companies view and organize their marketing

activities from the consumer’s point of view.activities from the consumer’s point of view.

Innovative Marketing:Innovative Marketing: Companies seek real product and marketing Companies seek real product and marketing

improvements. improvements.

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Business Actions Toward Socially

Responsible Marketing• Enlightened MarketingEnlightened Marketing

Value Marketing:Value Marketing: Companies put most of their resources into Companies put most of their resources into

value-building marketing investments. value-building marketing investments.

Sense-of-Mission Marketing:Sense-of-Mission Marketing: Companies define their mission in broad Companies define their mission in broad

social terms rather than in narrow product social terms rather than in narrow product terms.terms.

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Business Actions Toward Socially

Responsible Marketing

• Enlightened MarketingEnlightened Marketing Societal Marketing:Societal Marketing:

Companies make marketing decisions Companies make marketing decisions by considering consumers’ wants, the by considering consumers’ wants, the company’s requirements, consumers’ company’s requirements, consumers’ long-run interests, and society’s long-run interests, and society’s long-run interests. long-run interests.

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Business Actions Toward Socially

Responsible Marketing

• Enlightened MarketingEnlightened Marketing Societal Classification of ProductsSocietal Classification of Products

Deficient productsDeficient products Pleasing productsPleasing products Salutary productsSalutary products Desirable productsDesirable products

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Business Actions Toward Socially

Responsible Marketing

• Marketing EthicsMarketing Ethics Corporate Marketing Ethics PoliciesCorporate Marketing Ethics Policies Guiding Principle in Policy Guiding Principle in Policy

DeterminationDetermination Free market and legal systemFree market and legal system Individual companies and managersIndividual companies and managers

International Ethical Policies are a International Ethical Policies are a Special ChallengeSpecial Challenge