Chapter 4 Ethics and Social Responsibility in Marketing

Societal Responsibility, triple-bottom line, green marketing, cause marketing, social audit, sustainable development

An even broader sense of social responsibility has emerged in recent years. Societal responsibility refers to obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public Today, emphasis is placed on the TRIPLE-BOTTOM LINE: recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth. Growing interest in green marketing, cause marketing, social audits, and sustainable development reflects this recognition GREEN MARKETING: Marketing efforts to produce, promote, and reclaim environmentally sensitive products...takes many forms Socially responsible efforts on behalf of the general public are becoming more common. A formal practice is CAUSE MARKETING, which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products...This definition distinguishes cause marketing from a firm's standard charitable contributions, which are outright donations Converting socially responsible ideas into actions involves careful planning and monitoring of programs. Many companies develop, implement, and evaluate their social responsibility efforts by means of a SOCIAL AUDIT, which is a systematic assessment of a firm's objectives, strategies, and performance in terms of social responsibility. Frequently, marketing and social responsibility programs are integrated Corporate attention to social audits will increase as companies seek to achieve sustainable development and improve the quality of life in a global economy. SUSTAINABLE DEVELOPMENT involves conducting business in a way that protects the natural environment while making economic progress Turning the Table: Consumer Ethics and Social Responsibility

Understanding Social Responsibility in Marketing: Social Responsibility

As we saw in Chapter 1, the societal marketing concept stresses marketing's social responsibility by not only satisfying the needs of consumers but also providing for society's welfare. SOCIAL RESPONSIBILITY: Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions.

Stakeholder Responsibility

Criticism of the profit view has led to a broader concept of social responsibility. Stakeholder responsibility focuses on the obligations an organization has to those who can affect achievement of its objectives. These constituencies include consumers, employees, suppliers, and distributors

Ethics

ETHICS: Ethics are the moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas

Three Concepts of Social Responsibility, FIGURE 4-4 (DRAW/MEMORIZE, IMPORTANT)...THE BIGGER THE CIRCLE THE BROADER THE SENSE OF SOCIAL RESPONSIBILITY

FIGURE 4-4 shows the three concepts of social responsibility: (1) profit responsibility, (2) stakeholder responsibility, and (3) societal responsibility

Laws

LAWS: Whereas ethics deal with personal moral principles and values, laws are society's values and standards that are enforceable in the courts... Ethical but illegal, unethical but illegal, etc...

Profit Responsibility

Profit responsibility holds that companies have a simple duty: to maximize profits for their owners or stockholders

Factors That Affect Ethical Marketing Behavior

Societal Culture and Norms Business Culture and Industry Practices Ethics of Exchange CAVEAT EMPTOR: Before the 1960s, the legal concept of caveat emptor, let the buyer beware, was pervasive in the American business culture CONSUMER BILL OF RIGHTS: In 1962, President John F. Kennedy outlined a Consumer Bill of Rights that codified the ethics of exchange between buyers and sellers. These were the right (1) to safety, (2) to be informed, (3) to choose, and (4) to be heard. Consumers expect and often demand that these rights be protected, as have American businesses Ethics of Competition ECONOMIC ESPIONAGE: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company's competitors. This practice is illegal and unethical and carries serious criminal penalties for the offending individual or business. Espionage activities include illegal trespassing, theft, fraud, misrepresentation, wiretapping, the search of a competitor's trash, and violations of written and implicit employment agreements with noncompete clauses Corporate Culture and Expectations Code of Ethics CODE OF ETHICS: A code of ethics is a formal statement of ethical principles and rules of conduct Ethical Behavior of Top Management and Co-Workers WHISTLE-BLOWERS: Clearly, ethical dilemmas can bring personal and professional conflict. Fort this reason, states have enacted laws designed to protect whistle-blowers employees who report unethical or illegal actions of their employers Your Personal Moral Philosophy and Ethical Behavior Moral Idealism MORAL IDEALISM: A personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome. This philosophy exists in the Consumer Bill of Rights and is favored by moral philosophers and consumer interest groups...examples Utilitarianism UTILITARIANISM: An alternative perspective on moral philosophy is utilitarianism, which is a personal moral philosophy that focuses on "the greatest good for the greatest number" by assessing the costs and benefits of the consequences of ethical behavior. If the benefits exceed the costs, then the behavior is ethical. If not, then the behavior is unethical