MKTG 409 – Chapter 4: Social Responsibility and Ethics in Marketing

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Social Responisibility
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An organization’s obligation to maximize its positive impact and minimize its negative impact on society. Being a good corporate citizen can result in greater consumer trust and loyalty. Positive publicity Indirect long-term benefits
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Mattel Recall
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After recalling unsafe products and losing millions in profits in 2007, Mattel rebounded. Improved ethics and social responsibility initiatives Has been named on numerous \”most ethical\” lists Consumer demanded and trust returned
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Marketing Citizenship Affects Stakeholder Groups
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Customers Marketing Channel Members Employees
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Customers
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Positive product evaluation Customer loyalty Positive word-of-mouth Long-term relationship Enhanced corporate reputation
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Marketing Channel Members
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Long-term relationships Trusting relationships Enhanced efficiency in communications
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Employees
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Improved self-concept Increased commitment and motivation Reduced absenteeism and turnover Trust in co-worker relationships Enhanced efficiency in communication
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The Pyramid of Corporate Social Responsibility
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Philanthropic Ethical Legal Economic
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Dimensions of Social Responsibility: Marketing Ethics
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Principles and standards that define acceptable conduct in marketing as determined by various stakeholders, the most basic of which have been codified into law. Ethics Issues: An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong.
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Ethical Issues in Marketing
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Product Distribution Promotion Pricing
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Product
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Failing to disclose risks associated with a product Failing to disclose information about a product’s function, value, or use. Failing to disclose information about changes in the nature, quality, or size of a product
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Distribution
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Failing to live up to the rights and responsibilities associated with specific intermediary roles. Manipulating product availability Using coercion to force other intermediaries to behave in a certain way
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Promotion
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False or misleading advertising Using manipulative or deceptive sales promotions, tactics, and publicity Offering or accepting bribes in personal selling situations
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Pricing
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Price fixing Predatory pricing Failing to disclose the full price of a purchase
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Corporate Philanthropy
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The synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits
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Cause-Relationship Marketing
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The practice of linking products to a particular social cause on an ongoing or short-term basis.
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Natural Environment
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Consumers insisting not only on a good quality of life but on a healthful environment so they can maintain a high standard of living during their lifetimes.
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Consumerism
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Activities undertaken by independent individuals, groups, and organizations to protect their rights as consumers.
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Community Relations
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Society eager to have marketers contribute to its well-being, wishing to know what marketers do to help solve social problems.
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Sustainability
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The potential for the long-term well-being of the natural environment, including all biological entities, as well as the interaction among nature and individuals, organizations and business strategies.
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Green Marketing
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A strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting and enhancing the natural environment.
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Consumerism
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The efforts of independent individuals, groups and organizations or protect the rights of consumers. Interest groups and individuals take action against companies they consider irresponsible by lobbying, letter and email writing campaigns, boycotts and public-service announcements.
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Comm Relations
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Marketers play a role as community members Corporate philanthropy is on the rise Firms can positively influence their communities by providing employment opportunities, stimulating economic development, and making financial contributions to educational, health, cultural, and other causes.
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Ethical Issue
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An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical Ethical issues can become a problem in all elements of the marketing mix Marketers must be able to recognize problems and solve them.
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Factors that Influence the Ethical Decision Making Process in Marketing
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Individual Factors: In daily life, people base ethical decisions on personal principles and values. Organizational Relationships: In an organizational setting, people rely on organizational values for ethical decision making. Opportunity: Conditions that limit barriers or provide rewards
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Improving Ethical Conduct in Marketing: Codes of Conduct
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Formalized rules and standards that describe the organization’s employee expectations. Are usually responsible for creating and distributing the code of conduct, enforcing the code and meeting with organizational members to discuss or provide advice about ethical issues.
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Implementing Ethical/Legal Compliance Programs
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It is important that companies enforce standards and impose penalties on those who violate codes of conduct. The company must take steps in response to violations of standards and revise the compliance program to diminish future opportunities for misconduct. Codifying ethical standards and implementing compliance programs and codes of conduct that incorporate both legal and ethical concerns is the best approach to preventing violations.
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Things to Consider
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What are your own ethical standards? Do they match with the company you are considering working for? Research policies, enforcement, history, etc. Are you willing to stand up for your issues?
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Social Responsibility and Ethics Improve Marketing Performance: Overall Strategic Marketing Planning
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Ethics: Individual and group decisions Social Responsibility: The total effect of marketing decisions on society Evidence shows there are long-term financial benefits to being ethical and socially responsible.

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