Chap 8 Ethics and Social Responsibility in Marketing Strategy – Flashcards

stakeholder demands and ethical issues that can become legal issues.

A broad concept that relates to an organization's obligation to maximize its positive impact on society while minimizing its negative impact

Principles and standards that define acceptable marketing conduct as determined by the public, government regulators, private interest groups, competitors, and the firm itself

Bottom level: Economic responsibilities Second level: legal responsibilities Third level: Ethical Responsibilities 4th level: philanthropic responsibilities (biggest to smallest)

Economic of making a profit. Legal of obeying laws. Ethical to uphold principles and standards. Philanthropic to increase a firm's positive impact on society.

Programs designed to protect and preserve the natural environment: eco-friendly practices: waste reduction, reduction in greenhouse gas emissions, LEED building certification, green sourcing.

Creating customer relationships while also enhancing the natural environment.

misleading consumers about the eco-friendly nature of products

Business decisions involve complex decisions in which correctness may not be apparent (internet privacy, intellectual property, advertising claims). Ethical conflict may emerge from an inconsistency between personal values and the values held by members of the work group.

1) Product related ethical issues: failure to disclose risks, product design, counterfeit products. 2) Pricing-related ethical issues: price discrimination, price fixing, predatory pricing, superficial discounting 3) Supply chain related ethical issues: labor issues, raw material sources, quality control 4) Promotion-related ethical issues: false or misleading communication, ambiguous statements, bribery, direct marketing fraud

Overall: Misrepresentation, manipulation, exploitation, abuse. Product Issues: Misrepresentation, failure to disclose defects, counterfeit products. Pricing Issues: Deception, reference pricing, price discrimination. Distribution issues: Opportunism, exclusive arrangements, slotting fees, tying contracts. Promotion Issues: Misleading advertising, bait/switch, high-pressure sales, gift giving

Compliance with laws and regulations. Trade associations. Better Business Bureau.

Less expensive. Guidelines are more practical and realistic. Reduce the need for expanded government bureaucracy.

Formal statement that describes what an org expects of it's employees. Not an effective means of controlling ethical behavior unless integrated into daily decision making. Not effective unless the code has support of top management. Code must reflect management's desire for compliance with values, rules and policies. It is impossible for code of conduct to take every potential ethical situation into account.

Trustworthiness, respect, responsibility, fairness, caring and citizenship.

Ethical cultures emerge from strong leadership. Employees look to the leader as a model of acceptable behavior. Great leaders: create common goal for company, motivate others to be ethical, enjoy their jobs. have passion/ commitment for/to their work.

Part of a corporate culture that relates to an organization's expectations about appropriate conduct. Strong ethical climate leads employees to be: motivated to serve customers, committed to the firm, committed to high quality standards, satisfied with their job

The degree to which a firm understands and addresses stakeholder demands

Creates trust with the firm's stakeholders. It enhances the firm's rep. Causes efficient supply chains, stronger customer loyalty/satisfaction and higher profits and market value.