Chapter 16

Social criticism 2: Too few social goods

-Businesses oversell private goods (cars) at the expense of the public goods (public transportation) -The increase in public goods require more public goods to support them (streets) -the increase in private goods also results in social costs (pollution) Response from marketers: -there needs to be a balance between private and public goods -two solutions: producers should bear the public and social costs of their operations. Consumers should pay the public and social costs of their purchases

Social Criticism 5: Planned and perceived obsolescence

-Marketers design their products to become quickly obsolete by holding back on attractive features and introducing them later to make older models less desirable *(planned)* -Marketers change acceptable style to encourage more and earlier buying *(perceived)* Response from marketers: -Competitive market forces lead to ever improving products and force companies to innovate -some customers like style change sand ant the latest innovations

Social Criticism 6: Poor service to disadvantaged consumers

-Marketers provide poor service to disadvantaged to low income customers -Some companies "redline" poor neighborhood and avoid placing stores there Response from marketers: -Some marketer profitably target low-income customers -The FTC has taken action against marketers the engage in false ads wrongfully deny service, or charge disadvantaged customers too much -Many companies participate in community projects

Marketing's Impact on Society: 3 major criticisms

-false wants and too much materialism -too few social goods -cultural pollution

Social criticism 3: Cultural pollution

-marketing creates cultural pollution by constantly bombarding our senses with endless marketing messages -marketing pollutes people's minds with messages of materialism, sex, power, and status Response from marketers: -marketing and advertising are planned to reach only a specific target audience -ads makes ratio, TV, and the internet free to users and keeps down the costs of newspapers and magazines -today's consumers have alternatives to avoid marketing and advertising thru technology

Consumer advocates call for additional buyers' rights:

-right to be well informed about important aspect of product -right to be protected against questionable products and marketing practices -right to influence products and marketing practices in ways will improve "quality of life" -right to consume now in way preserve the world or future generations of consumers

Society criticism 1: False wants and too much materialism

-the marketing system creates too much interest in material possessions -people are judged by what they own rather than who they are -creating false wants benefits industries more than they benefit consumers Response from marketers: -criticism overstates the power of marketing to create needs and wants (culture) -marketers are most effective when they appeal to existing wants rather than trying to create new ones -the high failure rate of new products shows that companies control demand (consumers)

3 Marketing impacts on businesses

1. Acquisition of competitions: critics claim that businesses are harmed and competition reduced when companies expand by acquiring competitors -Response: acquisition can lead to lower prices and better efficiency; acquisition is closely regulated to prevent monopolies 2. Creating barriers to entry: critics argue that large companies use their power to prevent smaller companies from entering a market -Response: small companies can provide different types of value 3. Unfair marketing practices: critics argue that large companies can use their vast resources to drive other firms out of business -Response: laws protect predatory business practices

5 sustainable marketing principles

1. Consumer-oriented marketing 2. Customer value marketing 3. Innovative marketing 4. Sense-of-mission marketing 5. Societal marketing

Social Criticism 2: Marketers use deceptive practices that lead customers to believe they will get more value than they actually do, they fall into three categories:

1. Deceptive pricing (advertising phony price reductions) 2. Deceptive promotion (overstating benefits) 3. Deceptive packaging (exaggerating package contents) Response from marketers: -Increased legislation to protect consumers: Federal Trade Commission has the power to regulate unfair and deceptive acts and practice -Deceptive practices harm businesses in the long-run: consumers who feel that they have been treated unfairly switch brands, criticize companies, and even notify the Better Business Bureau

Marketing Ethics: two different approaches

1. Free market and legal system: companies and their managers are not responsible for making moral decisions -companies/managers can, in good conscious, do whatever the system/law allows 2. Individual companies and managers: companies and their managers should apply high ethical standards when making decision - sustainable marketing- each company must look beyond what is legal and develop standards based on personal integrity corporate conscience, and long-run societal welfare

Environmental sustainability grid: Four strategies

1. Pollution prevention (today: greening, internal): eliminating or reducing waste before it is created 2. Product stewardship (today: greening, external): minimizing environmental impact throughout the entire product life cycle 3. New clean tech (tomorrow: beyond greening, internal): developing new sets of environmental skills and capabilities 4. Sustainability vision (tomorrow: beyond greening, external): creating a strategic framework for future sustainability

Marketing Ethics: Policies and Corporate Culture

Corporate marketing Ethics Policies -Corporate Marketing Ethics Policies --companies should develop marketing ethical guidelines that everyone in the business must follow ---these policies should cover distributor relations, advertising standards, customer service, sales, pricing ---American marketing association code of ethics -Corporate Culture --In order for a company to truly behave morally, ethics has to be ingrained in corporate culture ---there must also be repercussions for unethical behavior

Social Criticism 3: High Pressure Selling

Salespeople use high-pressure tactics to persuade people to buy products that they had not intention of buying Response: -Most selling involves building long-term relationships to increase customer lifetime value -High-pressure or deceptive selling can damage these relatinships

Social Criticism 4: Shoddy, harmful, or unsafe products

Some products are not well made, others provide little benefits and some are simply harmful or unsafe Response from marketers: -most companies want to produce quality products relative to a product's cost; most provide products with different levels of benefits; most do not want product liability lawsuits

Social Criticism 1: High prices due to

ads and promotion, distribution, excessive mark-ups (maximizing profit) Response from marketers: -ad informs buyer of availability and merits of brand and sales promotion -intermediaries are often necessary and offer value -consumer's often don't understand the cost of doing business/competitors keep costs down

Environmentalism

an organized movement of concerned citizens, businesses, and gov agencies to protect and improve people's current and future living environment -environmentalists are not against marketing -they simply argue that the goal of marketing should be maximize quality of life -Strategy: promoting environmental sustainability: marketing strategies that *both sustain the environment and produce profits for the company*

Sustainable marketing

calls for socially and enviornmentally responsible marketing that meets the present needs of consumer and businesses while preserving the ability of future generations to meet their needs

Innovative marketing

companies should continuously seek real and substantial product and marketing improvements that maximize 'quality of life' -creating products that better satisfy consumers needs while minimizing social and environmental impact

Sense-of-mission marketing

companies should define their missions in broad social terms rather than narrow product terms -they should try to build concern for consumers, society, business, and the environment into their underlying culture

Societal marketing

companies should make strategic marketing decisions by considering consumers' wants and wellbeing, the company's requirements, and society's long-run interests -marketers should view societal problems as opportunities that can be solved through innovative marketing programs

Customer-value marketing

companies should put most of its resources into customer-value- marketing investments -instead of focusing on short-term gains, firms should seek to create more long-term value for customers (maximizing benefits while minimizing costs), which will allow them to capture more value in return

Consumer-oriented marketing

companies should view and organize their marketing activities from the consumer's point of view -should work hard to satisfy the needs and wants of a defined group of consumers both now and in the future

Sustainable marketing concept

considers both societal marketing concept and strategic planning concept. Calls for socially and environmentally responsible actions that meet both the immediate and future needs of company and customers

Strategic planning concept

considers future company needs

Societal marketing concept

considers future welfare of consumers

Critics argue that marketing practices have negative consequences for

consumers, society, businesses

Marketing's impact on consumers, 6 negative consequences:

high prices, deceptive practices, high-pressure selling, shoddy-harmful-unsafe products, planned obsolesce, poor service to disadvantaged consumers

Pleasing products

products that give high immediate satisfaction but may hurt consumer in the long run

Salutary products

products that have low immediate appeal but may benefit consumers in the long run

Deficient products

products that have neither immediate appeal nor long-run benefits

Marketing concept

recognizes that orgs thrive by determining the current needs and wants of target customers and fulfilling them more effectively and efficiently than competitors do

grass roots marketing

refers to marketing on a local community level

Marketing ethics

the goals of sustainable marketing (long-term consumer, societal , and business welfare) can only be achieved through ethical marketing behavior -ethical dilemmas often arise during the implementation of marketing strategies -marketers need set of principles that will help them determine the moral importance of each situation and how they should respond to the situation

Consumerism and seller and buyers rights

the organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers Traditional Sellers rights: right to introduce any product that is not hazardous, right to charge any price, right to spend any amount to promote, right to use any product message and buying incentive Traditional buyer's rights: right not to buy a product, right to expect product to be safe, right to expect product to perform as claimed Comparing these rights, critics believe that the balance of power lies on side of seller

General idea of consequences of marketing practices

the push towards the sustainable marketing concept that has been driven largely by social and environmental criticism of business and marketing