CHAPTER

ETHICS AND
SOCIAL
RESPONSIBILITY
IN MARKETING

NATURE of MARKETING ETHICS

Ethics doing theright thing
Ethical

vs

Legal

Personal & not punishable - Societal and Punishable

Laws

UNDERSTANDING ETHICAL BEHAVIOR

1st Influence - Societal Culture and Norms

Culture dictates what is right and wrong,

so right changes from culture to culture.

2nd Influence - Business Culture & Industry

Practices - B to C
Early 1900s: Caveat Emptor
A Latin phrase meaning let the buyer beware - what you see is
what you get, &if its not what you expected, too bad
Belief that competition in the marketplace corrects abuses

1962, Kennedys Consumer Bill of Rights

Business Culture & Industry Practices - B to B

Ethics of Competition
Economic Espionage stealing trade secrets
Includes trespassing, wiretapping, dumpster diving
Bribes -payment before service
Kickbacks-payment after service
BothareillegalinU.S.,butverycommonindevelopingnations

3rd Influence- Corporate Culture &

Expectations
Corporate Culture shown in dress codes,
work space, compensation
Code of Ethics
Whats in it? (pg 85)
What if its breached?
Whistle-blowers

Personal Moral Philosophy and

Ethical Behavior
Moral Idealism
There is a right thing to do, no matter what the cost
Favored by religious &consumer groups

Utilitarianism
The right thing to do is what hurts the fewest
Favored by business executives and the military

Concept of Social Responsibility

Profit Responsibility-companys duty is to maximize profits

Careful of Profiteering- shrink supply to raise price & profit

Stakeholder Responsibility-companys duty is to protect

the interests of the people who
gain from it

Societal Responsibility - companys duty is to preserve

environment while reaping profit
Green Marketing

FIGURE 4-2 Three concepts of social

responsibility

Turning the Table: Consumer Ethics

and Social Responsibility
Includes:
Filingwarrantyclaimsaftertheperiodexpire
Fraudulentreturnsofmerchandise
Providinginaccuratecreditinformation
Piratingdigitalcontent
Submittingphonyinsuranceclaims
Improperdisposalofenvironmentallysensitivematerial
Coststaxpayersbillionseachyearinhigherpricesandpremiums.
RememberEverybodydoesitisnotanexcuseforabuse

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.

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.

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.

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.

Concept Check

2. Marketing efforts to produce,

promote, and reclaim
environmentally sensitive products
green marketing
are called _____________.

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.

Ethics

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

Laws

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

Consumer Bill of Rights (1962)

The
The Consumer
Consumer Bill
Bill of
of Rights
Rights (1962)
(1962)
is
is aa law
law that
that codified
codified (standardized
(standardized what
what
was
was not
not previously
previously written
written down)
down) the
the
ethics
ethics of
of exchange
exchange between
between buyers
buyers and
and
sellers.
sellers. ItIt includes
includes the
the buyers
buyers rights:
rights:
(1)
(1) to
to safety
safety
(2)
(2) to
to be
be informed
informed
(3)
(3) to
to choose,
choose, and
and
(4)
(4) to
to be
be heard.
heard.

Code of Ethics

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

Whistle-blowers

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

Moral Idealism

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

Utilitarianism

Utilitarianism
Utilitarianism is
is aa personal
personal moral
moral
philosophy
philosophy that
that focuses
focuses on
on the
the greatest
greatest
good
good for
for the
the greatest
greatest number,
number, by
by
assessing
assessing the
the costs
costs and
and benefits
benefits of
of the
the
consequences
consequences of
of ethical
ethical behavior.
behavior.

Social Responsibility

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

Green Marketing

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