Marketing and Society: Social Responsibility and Marketing Ethics

Chapter 20

Road Map: Previewing the Concepts

Identify the major social criticisms of marketing. Define consumerism and environmentalism and explain how they affect marketing strategies. Describe the principles of socially responsible marketing. Explain the role of ethics in marketing.
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Criticisms of Marketing

High prices
Deceptive practices High-pressure selling Shoddy or unsafe products Planned obsolescence Poor service to disadvantaged consumers
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High Prices

Caused by:
High costs of distribution High advertising and promotion costs Excessive markups

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Deceptive Practices

Deceptive Pricing:
Falsely advertising factory or wholesale prices or large reductions from phony high retail list prices.

Deceptive Promotion:
Overstating a products features or performance, running rigged contests.

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

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High-Pressure Selling
Salespeople are trained to deliver smooth, canned talks to entice purchase. Hard sales can occur because of prizes going to top sellers. High-pressure selling not good for long-term relationships.
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Shoddy or Unsafe Products

Products not made well or service not performed well. Products deliver little benefit or can be harmful. Unsafe products due to manufacturer indifference, increased production complexity, poorly trained labor, and poor quality control.
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Planned Obsolescence

Products needing replacement before they should be obsolete. Producers change consumer concepts of acceptable styles. Intentionally holding back attractive functional features, then introducing them later to make old model obsolete.
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Poor Service to Disadvantaged Consumers

Poor may pay more for inferior goods. Redlining may occur in disadvantaged neighborhoods. Higher insurance premiums to people with poor credit ratings. Weblining can occur.
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Marketings Impact on Society as a Whole

False wants and too much materialism. Producing too few social goods.
Cultural pollution.

Too much political power.

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Marketings Impact on Other Businesses

Acquisitions of competitors.
Marketing practices that create barriers to entry. Unfair competitive marketing practices.

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Consumerism
Consumerism is an organized movement of citizens and government agencies to improve the rights and power of buyers in 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 of concerned citizens and government agencies to protect and improve peoples living environment.

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

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Enlightened Marketing
A marketing philosophy holding that a companys marketing should support the best long-run performance of the marketing system.

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Enlightened Marketing

Consumer-Oriented Marketing:
The philosophy of enlightened marketing that holds that the company should view and organize its marketing activities from the consumers point of view.

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Enlightened Marketing

Innovative Marketing:
A principle of enlightened marketing that requires that a company seek real product and marketing improvements.

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Enlightened Marketing

Value Marketing:
A principle of enlightened marketing that holds that a company should put most of its resources into valuebuilding marketing investments.

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Enlightened Marketing

Sense-of-Mission Marketing:
A principle of enlightened marketing that holds that a company should define its mission in broad social terms rather than narrow product terms.

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Marketing Ethics

Corporate Marketing Ethics Policies:

Broad guidelines that everyone in the organization must follow.

These should cover:

Distributor relations Advertising standards Customer service Pricing Product development General ethical standards
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Marketing Ethics
What principle should guide companies and marketing managers on issues of ethics and social responsibility?
Free market and legal system Responsibility falls to individual companies and managers
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Rest Stop: Reviewing the Concepts

1. Identify the major social criticisms of marketing. 2. Define consumerism and environmentalism and explain how they affect marketing strategies. 3. Describe the principles of socially responsible marketing. 4. Explain the role of ethics in marketing.

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