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Marketing Ethics and Social
Responsibility
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 3 Objectives
1. Understand that marketing’s
contribution to society includes
improving the efficiency and
effectiveness of the economic process
through the creation of exchanges,
marketing products, and trading
innovations. Explore why marketing is
frequently criticized for socially
irresponsible behavior.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 3 Objectives
2. Recognize why the self-centered
behavior of millions of business and
consumers around the world has a
detrimental impact on supply and
demand.
3. Appreciate the role of personal ethical
behavior and learn the major theories
of marketing ethics.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 3 Objectives
4. Understand the rules and regulations
govern each element of the marketing
mix.
5. Understand that marketing has a role
in promoting worthy public causes
and how cause-related marketing is
used to achieve this goal.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 3—Social Responsibility
Social Responsibility--Defined
• The collection of marketing
philosophies, policies, procedures
and actions intended to enhance
society’s welfare.
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing’s First Social Responsibility
Strive to be More Efficient and Effective
• First responsibility is to advance life,
liberty, and the general happiness
through the creation of exchanges,
markets, product innovations, and
trading innovations that increase the
efficiency and effectiveness of the
economic process
Objective 1
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing’s First Social Responsibility
Problems with Efficiency and
Effectiveness
1. Too many unneeded products are
marketed that fail
2. Too many unneeded products are
marketed that succeed.
•
•
Planned obsolescence—creating products
that are known to be outdated in the near
future.
Ex. computer software
Objective 1
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing’s First Social Responsibility
Problems with Efficiency and
Effectiveness
3. Market distribution systems are
inefficient
4. A lot of advertising is wasteful
expenditure
•
Inefficient targeting
Objective 1
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketer’s Self-interested, Unintended
Consequences on Supply
• Tragedy of the Commons
– Individual activities of producers
can have an accumulative effect that
is often not intended and can lead to
harmful effects on others or society
at large.
Objective 2
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketer’s Self-interested, Unintended
Consequences on Supply
• Supply-side Market failure
– Individual activities of a supplier
inadvertently lead to destructive
effects on the overall supply.
Objective 2
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketer’s Self-interested, Unintended
Consequences on Demand
• Demand-side Market failure
– Cumulative effect of the marketing
practices of many thousands of
advertising campaigns that has a
residual negative impact on the
values of buyers and demand for
various products.
Objective 2
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketer’s Self-interested, Unintended
Consequences on Demand
• Demand-side Market failure
– Nationwide poll in 2002 revealed that
“unrealistic standards of beauty”
was the biggest criticism that
customers had of advertising.
Objective 2
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Marketing’s Second Social Responsibility
• Behave Ethically
– Conduct business in an ethical
manner
– Most do live up to this responsibility,
however some do not.
Objective 3
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Marketing’s Second Social Responsibility
• Personal Codes of Ethics
– General terms leave specific
interpretation up to the
implementation of marketing
strategy
– American Marketing Association
• Developed a code of ethics that
marketing professionals turn to
Objective 3
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing’s Second Social Responsibility
• Theories of Marketing Ethics
1. Morality accepted by all, called a
Social Contract
2. Principle of Utility—is that “ethical
behavior” is the behavior that
produces the most good for the
most people in a specific situation.
Objective 3
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing’s Second Social Responsibility
• Theories of Marketing Ethics
3. Categorical imperative—would it be
right if everyone did it?
4. Situational ethics—right and wrong
are determined by the specific
situation
Objective 3
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing’s Second Social Responsibility
• Personal Ethical Choices
– Ethical vigilance—asking yourself
the “hard questions”
Objective 3
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Marketing’s Third Social Responsibility
• Obey the Law
– Political and legal forces impact the
marketing environment to which the
marketer must adapt.
Objective 4
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Marketing’s Fourth Social Responsibility
• Help Market Good Causes
– Encourage its use in the promotion
of worthy public causes
– Cause-Related Marketing
Objective 5
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
Marketing’s Fourth Social Responsibility
• Cause-Related Marketing
– Includes those activities that
governments, public service
organization, companies, and
individuals undertake in an effort to
encourage target customer
participation in socially redeeming
programs
Objective 5
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Marketing’s Fourth Social Responsibility
• Cause-Related Marketing
– Usually delivered through
educational campaigns and provide
free or low-priced services at
convenient times and places.
Objective 5
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.