CHAPTER

ETHICS AND SOCIAL RESPONSIBILITY IN MARKETING

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AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1. Explain the differences between legal and ethical behavior in marketing. 2. Identify factors that influence ethical and unethical marketing decisions. 3. Describe the different concepts of social responsibility. 4. Recognize unethical and socially irresponsible consumer behavior.
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THERE IS MORE BREWING AT ANHEUSER-BUSCH THAN BEER

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NATURE AND SIGNIFICANCE OF MARKETING ETHICS Ethics Ethical/Legal Framework in Marketing

Laws

Current Perceptions of Ethical Behavior

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Concept Check

1. What are ethics? A: Ethics are the moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas.
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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.
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UNDERSTANDING ETHICAL MARKETING BEHAVIOR Societal Culture and Norms

Culture

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FIGURE 4-1 A framework for understanding ethical behavior

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UNDERSTANDING ETHICAL MARKETING BEHAVIOR Business Culture and Industry Practices

Business Cultures Ethics of Exchange
Caveat Emptor Consumer Bill of Rights U.S. Consumer Product Safety Commission Federal Trade Commission (FTC)
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Federal Trade Commission

Is your online privacy protected?

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UNDERSTANDING ETHICAL MARKETING BEHAVIOR

Ethics of Competition
Economic Espionage Bribes Kickbacks

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UNDERSTANDING ETHICAL MARKETING BEHAVIOR Corporate Culture and Expectations

Corporate Culture Code of Ethics Ethical Behavior of Top Management and Co-workers
Whistle-blowers

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UNDERSTANDING ETHICAL MARKETING BEHAVIOR Personal Moral Philosophy and Ethical Behavior
Moral Idealism Utilitarianism

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FIGURE 4-A Personal moral philosophies

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3M Scotchgard
Which moral philosophy did 3M use and why?

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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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.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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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.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING Concepts of Social Responsibility

Profit Responsibility
Profiteering

Stakeholder Responsibility Societal Responsibility

Green Marketing Cause Marketing
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FIGURE 4-2 Three concepts of social responsibility

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Avon
Why do companies engage in cause marketing?

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UNDERSTANDING SOCIAL RESPONSIBILITY IN MARKETING The Social Audit: Doing Well by Doing Good
Social Audit Sustainable Development

Turning the Table: Consumer Ethics and Social Responsibility

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Ronald McDonald House

How do companies do well by doing good?

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Reebok
Why is sustainable development important?

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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.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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Concept Check

2. Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called green _____________.marketing

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Concept Check

3. What is a social audit? A: A social audit is a systematic assessment of a firms objectives, strategies, and performance in the domain of social responsibility.

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GOING ONLINE
DOING WELL BY DOING GOOD

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Going Online

1. Visit the BSR website. Can you update at least one example in the text related to your chosen topic?

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VIDEO CASE 4
STARBUCKS CORPORATION: SERVING MORE THAN COFFEE

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VIDEO CASE 4
Starbucks

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VIDEO CASE 4
Starbucks FIGURE 1 Starbucks Mission Statement and Guiding Principles

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VIDEO CASE 4
Starbucks

1. How does Starbucks approach to social responsibility relate to the three concepts of social responsibility described in the text?

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VIDEO CASE 4
Starbucks

2. What role does sustainable development play in Starbucks approach to social responsibility?

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SUPPLEMENTAL LECTURE NOTE 4-1

THE FIVE MOST COMMON KINDS OF ECONOMIC ESPIONAGE

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IN-CLASS ACTIVITY 4-1

THE ETHICS OF COMPETITIVE INTELLIGENCE

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Fuld & Company Brochure

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Ethics

Ethics are the moral principles and values that govern the actions and decisions of an individual or group.

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Laws

Laws are societys values and standards that are enforceable in the courts.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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Consumer Bill of Rights (1962)

The Consumer Bill of Rights (1962) is a law that codified the ethics of exchange between buyers and sellers, including the rights (1) to safety, (2) to be informed, (3) to choose, and (4) to be heard.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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Code of Ethics

A code of ethics is a formal statement of ethical principles and rules of conduct.

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Whistle-blowers

Whistle-blowers are employees who report unethical or illegal actions of their employers.

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Moral Idealism

Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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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.

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Social Responsibility

Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.

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Green Marketing

Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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Cause Marketing

Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.

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Social Audit

A social audit is a systematic assessment of a firms objectives, strategies, and performance in terms of social responsibility.

Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

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