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PRINCIPLES OF MARKETING University of Management and Technology 1901 N. Fort Myer Drive Arlington, VA 22209 USA Phone: (703) 516-0035 Fax: (703) 516-0985 Website: www.umtweb.edu © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-1 MKT100 CHAPTER 16: Marketing and Society: Social Responsibility and Marketing Ethics Armstrong, G. & Kotler, P. Marketing: An Introduction (6th ed.) Prentice Hall © 2003. © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-2 MKT100 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. © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-3 MKT100 Marketing’s Impact on Individual Consumers High Prices Criticisms Leveled at the Marketing Function by Consumers, and Others Deceptive Practices High-Pressure Selling Shoddy, Unsafe Products Planned Obsolescence Poor Service to Some © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-4 MKT100 Marketing’s Impact on Individual Consumers: High Prices High Prices Caused by the Following Factors High Costs of Distribution © UMT 2004 Version: 11-10-04 High Advertising and Promotion Costs Excessive Markups Visit UMT online at www.umtweb.edu 16-5 MKT100 Marketing’s Impact on Individual Consumers: Deceptive Practices Deceptive Pricing Deceptive Promotion Deceptive Packaging © UMT 2004 Version: 11-10-04 Falsely Advertising “Factory” or “Wholesale” Prices, Large Reduction From Phony High List Price Overstating the Product’s Features, Luring Customers to the Store for Out-of-Stock Bargains, etc. Exaggerating Package Contents, Not Filling Package to the Top, Using Misleading Labeling Visit UMT online at www.umtweb.edu 16-6 MKT100 Marketing’s Impact on Individual Consumers High-Pressure Selling Some products – such as cars and jewelry – are said to be sold, not bought. Such tactics damage marketer’s long-run relationship with customers. © UMT 2004 Version: 11-10-04 Shoddy or Unsafe Products Complaint that many products are not made well. Second, many products deliver little benefit. Third, concerns product safety. Visit UMT online at www.umtweb.edu 16-7 MKT100 American Association of Advertising Agencies This ad demonstrates that advertising can’t make consumers buy things that they don’t need despite highpressure selling. © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-8 MKT100 Marketing’s Impact on Individual Consumers Planned Obsolescence Change consumer concepts of acceptable styles. Hold back attractive functional features. May break, wear, rust, or rot sooner than should. © UMT 2004 Version: 11-10-04 Poor Service to Disadvantaged Consumers May pay more for inferior goods. “Redlining” may occur where major chain retailers avoid placing stores in disadvantaged neighborhoods. Visit UMT online at www.umtweb.edu 16-9 MKT100 Marketing’s Impact on Society as a Whole False Wants & Too Much Materialism Producing Too Few Social Goods Marketing’s Perceived Negative Impact on Society as a Whole Too Much Political Power © UMT 2004 Version: 11-10-04 Cultural Pollution Visit UMT online at www.umtweb.edu 16-10 MKT100 Marketing’s Impact on Other Businesses Acquisitions of Competitors © UMT 2004 Version: 11-10-04 Marketing Practices Create Barriers to Entry Visit UMT online at www.umtweb.edu Unfair Competitive Marketing Practices 16-11 MKT100 Consumerism Consumerism is an Organized Movement of Citizens and Government Agencies to Improve the Rights and Power of Buyers in Relation to Sellers. © UMT 2004 Buyers’ Sellers’ Rights Rights Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-12 MKT100 Consumerism – Buyers’ Rights The Right Not to Buy a Product 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 Well Informed About the Product The Right to Be Protected Against Questionable Products The Right to Be Heard About “Quality of Life” Issues © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-13 MKT100 Environmentalism Have a Sustainability Vision Plan for New Environmental Technologies © UMT 2004 Version: 11-10-04 Practice Pollution Prevention Adopt Design for the Environment Practices Visit UMT online at www.umtweb.edu Practice Product Stewardship 16-14 MKT100 Major Legal Issues Facing Marketing Management (Fig. 16-2) © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-15 MKT100 Enlightened Marketing Holds That a Company’s Marketing Should Support the Best Long-Run Performance of the Marketing System. Consumer-Oriented Marketing Innovative Marketing Value Marketing Sense-of-Mission Marketing Societal Marketing © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-16 MKT100 Societal Classification of Products (Fig. 16-3) © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-17 MKT100 Marketing Ethics Companies Need to Develop Corporate Marketing Ethics Policies – Broad Guidelines That Everyone in the Organization Must Follow and Should Address: Distributor Relations Advertising Standards Customer Service © UMT 2004 Version: 11-10-04 Pricing Product Development General Ethical Standards Visit UMT online at www.umtweb.edu 16-18 MKT100 Marketing Ethics Principles That Should Guide Companies and Marketing Managers On Issues of Ethics and Social Responsibility: Decided by the Free Market and Legal System © UMT 2004 Version: 11-10-04 Responsibility of Individual Companies And Managers Visit UMT online at www.umtweb.edu 16-19 MKT100 Rest Stop: Reviewing 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. © UMT 2004 Version: 11-10-04 Visit UMT online at www.umtweb.edu 16-20 MKT100