Marketing ethics

Marketing and Society: Social

Responsibility and Marketing Ethics

Chapter 20Chapter 20

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Road Map: Previewing the Concepts

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

• Define Define consumerismconsumerism and and environmentalismenvironmentalism and explain how and explain how they affect marketing strategies.they affect marketing strategies.

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

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

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Criticisms of Marketing

• High pricesHigh prices

• Deceptive practicesDeceptive practices

• High-pressure sellingHigh-pressure selling

• Shoddy or unsafe productsShoddy or unsafe products

• Planned obsolescencePlanned obsolescence

• Poor service to Poor service to disadvantaged consumersdisadvantaged consumers

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High Prices

• Caused by:Caused by: High costs of distributionHigh costs of distribution High advertising and High advertising and

promotion costspromotion costs Excessive markupsExcessive markups

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Deceptive Practices• Deceptive Pricing:Deceptive Pricing:

Falsely advertising “factory” or Falsely advertising “factory” or “wholesale” prices or large reductions “wholesale” prices or large reductions from phony high retail list prices.from phony high retail list prices.

• Deceptive Promotion:Deceptive Promotion: Overstating a product’s features or Overstating a product’s features or

performance, running rigged contests.performance, running rigged contests.• Deceptive Packaging:Deceptive Packaging:

Exaggerating package contents through Exaggerating package contents through subtle design, using misleading labeling, subtle design, using misleading labeling, etc.etc.

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High-Pressure Selling

• Salespeople are trained to Salespeople are trained to deliver smooth, canned talks deliver smooth, canned talks to entice purchase.to entice purchase.

• Hard sales can occur because Hard sales can occur because of prizes going to top sellers.of prizes going to top sellers.

• High-pressure selling not good High-pressure selling not good for long-term relationships.for long-term relationships.

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Shoddy or Unsafe Products

• Products not made well or service Products not made well or service not performed well.not performed well.

• Products deliver little benefit or Products deliver little benefit or can be harmful.can be harmful.

• Unsafe products due to Unsafe products due to manufacturer indifference, manufacturer indifference, increased production complexity, increased production complexity, poorly trained labor, and poor poorly trained labor, and poor quality control.quality control.

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Planned Obsolescence

• Products needing replacement Products needing replacement before they should be before they should be obsolete.obsolete.

• Producers change consumer Producers change consumer concepts of acceptable styles.concepts of acceptable styles.

• Intentionally holding back Intentionally holding back attractive functional features, attractive functional features, then introducing them later to then introducing them later to make old model obsolete.make old model obsolete.

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Poor Service to Disadvantaged

Consumers• Poor may pay more for inferior Poor may pay more for inferior

goods.goods.• ““Redlining” may occur in Redlining” may occur in

disadvantaged neighborhoods.disadvantaged neighborhoods.• Higher insurance premiums to Higher insurance premiums to

people with poor credit ratings.people with poor credit ratings.• ““Weblining” can occur.Weblining” can occur.

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Marketing’s Impact on Society as a Whole

• False wants and too much False wants and too much materialism.materialism.

• Producing too few social Producing too few social goods.goods.

• Cultural pollution.Cultural pollution.

• Too much political power.Too much political power.

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Marketing’s Impact on Other Businesses

• Acquisitions of competitors.Acquisitions of competitors.

• Marketing practices that Marketing practices that create barriers to entry.create barriers to entry.

• Unfair competitive marketing Unfair competitive marketing practices.practices.

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Consumerism

• Consumerism is an Consumerism is an organized movement of organized movement of citizens and government citizens and government agencies to improve the agencies to improve the rights and power of buyers in rights and power of buyers in relation to sellers.relation to sellers.

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Sellers’ Rights• The right to introduce any product in any

size and style, provided it is not hazardous to personal health or safety; or, if it is, to include proper warnings and controls.

• The right to charge any price for the product, provided no discrimination exists among similar kinds of buyers.

• The right to spend any amount to promote the product, provided it is not defined as unfair competition.

• The right to use any product message, provided it is not misleading or dishonest in content or execution.

• The right to use any buying incentive schemes, provided they are not unfair or misleading.

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Buyers’ Rights• The right not to buy a product that is

offered for sale.• The right to expect the product to be

safe.• The right to expect the product to

perform as claimed.• The right to be protected against

questionable products and marketing practices.

• The right to influence products and marketing practices in ways that will improve “quality of life.”

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Environmentalism

• An organized movement An organized movement of concerned citizens and of concerned citizens and government agencies to government agencies to protect and improve protect and improve people’s living people’s living environment.environment.

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Environmental Sustainability

• A management approach A management approach that involves developing that involves developing strategies that both sustain strategies that both sustain the environment and the environment and produce profits for the produce profits for the company.company.

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Enlightened Marketing

• A marketing philosophy A marketing philosophy holding that a company’s holding that a company’s marketing should support marketing should support the best long-run the best long-run performance of the performance of the marketing system.marketing system.

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Enlightened Marketing

• Consumer-Oriented Consumer-Oriented Marketing:Marketing:

The philosophy of enlightened The philosophy of enlightened marketing that holds that the marketing that holds that the company should view and company should view and organize its marketing organize its marketing activities from the consumer’s activities from the consumer’s point of view.point of view.

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Enlightened Marketing

• Innovative Marketing:Innovative Marketing: A principle of enlightened A principle of enlightened

marketing that requires that a marketing that requires that a company seek real product company seek real product and marketing improvements.and marketing improvements.

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Enlightened Marketing

• Value Marketing:Value Marketing: A principle of enlightened A principle of enlightened

marketing that holds that a marketing that holds that a company should put most of company should put most of its resources into value-its resources into value-building marketing building marketing investments.investments.

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Enlightened Marketing

• Sense-of-Mission Marketing:Sense-of-Mission Marketing: A principle of enlightened A principle of enlightened

marketing that holds that a marketing that holds that a company should define its company should define its mission in broad social terms mission in broad social terms rather than narrow product rather than narrow product terms.terms.

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Marketing Ethics• Corporate Marketing Ethics Corporate Marketing Ethics

Policies:Policies: Broad guidelines that everyone in Broad guidelines that everyone in

the organization must follow.the organization must follow.• These should cover:These should cover:

Distributor relationsDistributor relations Advertising standardsAdvertising standards Customer serviceCustomer service PricingPricing Product developmentProduct development General ethical standardsGeneral ethical standards

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Marketing Ethics

• What principle should guide What principle should guide companies and marketing companies and marketing managers on issues of ethics managers on issues of ethics and social responsibility?and social responsibility?

Free market and legal systemFree market and legal system Responsibility falls to individual Responsibility falls to individual

companies and managerscompanies and managers

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Rest Stop: Reviewing the Concepts

1.1. Identify the major social criticisms Identify the major social criticisms of marketing.of marketing.

2.2. Define Define consumerismconsumerism and and environmentalismenvironmentalism and explain how and explain how they affect marketing strategies.they affect marketing strategies.

3.3. Describe the principles of socially Describe the principles of socially responsible marketing.responsible marketing.

4.4. Explain the role of ethics in Explain the role of ethics in marketing.marketing.