MKTG350 Chapter 4
Ethical values for the American Marketing Association
- Honesty - Responsibility - Fairness - Respect - Transparency - Citizenship
In pricing, common ethical issues are:
- price fixing -predatory pricing - failures to disclose the full price of a purchase
Socially Responsible efforts are beneficial because:
1. Attract goodwill, publicity, and potential customers and employees 2. Generates indirect, long-term benefits such as greater employee commitment and improves business performance
Product-related ethical issues arise when marketers fail to:
1. Disclose risks associated with a product 2. Disclose information regarding the function, value, or use of a product 3. Inform customers about existing conditions or changes in product quality
Some environments and marketers believe companies should work to protect and preserve the natural environment by implementing the following goals:
1. Eliminate the concept of waste 2. Reinvent the concept of a product 3. Make prices reflect the cost 4. Make environmentalism profitable
A marketer can significantly improve a community's quality of life through:
1. Employment opportunities 2. Economic development 3. Financial contributions to educational, health, cultural, and recreational causes
It is impossible to improve ethical conduct in an organization by:
1. Hiring ethical employees 2. Eliminating unethical employees 3. Improving the organization's ethical standards
Social responsible activities can:
1. Improve performance 2. Improve customer loyalty to the organization 3. Generate positive publicity 4. Boost Sales
All companies have an economic responsibility to be profitable so that they can:
1. Provide a return on investment to their owners and investors 2. Create jobs for the community 3. Contribute goods and services to the economy 4. Engage in fair competition 5. Build ethical customer relationships
People learn values and principles through
1. Socialization by family members 2. Social groups 3. Religion 4. Formal education
Stakeholders include:
1. The public 2. Government regulators 3. Private-interest groups 4. Consumers 5. Industry 6. The organization itself
The outcome of this learning process of ethical issues depends on the:
1. strength of each individual's personal values 2. Opportunity for unethical behavior 3. Exposure to others who behave ethically or unethically
Research shows that approx. ______ of whistle-blowers experience some type of retaliation
1/3
Marketing ethics
A dimension of social responsibility that involves principles and standards that define acceptable conduct in marketing
Bait and switch
A pricing scheme attempt to gain customer interest with a low price product but then switching the buyer to a more expensive product or add-on service
Organizational (corporate) culture
A set of values, beliefs, goals, norms, and rituals that members of an organization share
Ethical issue
An identifiable problem, solution, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical
Social responsibility
An organization's obligation to maximize its positive impact and minimize its negative impact on society
Code ethics of the American Marketing Association
As marketers, we must: 1. Do no harm 2. Foster trust in the marketing system 3. Embrace ethical values
Marketing employees resolve ethical issues based not only on what they learned from their own _________ but also on what they learn from ________ in the organization
Backgrounds; Others
Right to choose
Consumers should have access to a variety of products at competitive prices
Right to be informed
Consumers should have access to and the opportunity to review all relevant information about a product before buying it
Distribution issue COUNTERFEITING
Counterfeit products are widespread
Promotion issue ADVERTISING
Deceptive advertising or withholding important product information in a personal-selling situation.
Right to be heard
Ensure that consumers' interests will receive full and sympathetic consideration in the formulation of government policy
Codes of conduct (codes of ethics)
Formalized rules and standards that describe what the company expects of its employees
The larger the rewards and the milder the punishment for unethical conduct, the __________ the likelihood that unethical behavior will occur
Greater
Pricing issue DECEPTIVE PRICING
Indicating that an advertised sale price is a reduction below the regular price when in fact that is not the case
Right to Safety
Marketers are obligated not to market a product that they know could harm consumers
Product recalls
Occur when companies ask customers to return defective products
Quantity surcharges
Occur when consumers are effectively overcharged for buying a larger packaged size of the same grocery product
Greenwashing
Occurs when products are promoted as being more environmentally friendly than they really are
Another factor that may shape ethical decisions in marketing is __________
Opportunity
Codes must be _____________ to identify and eliminate weaknesses in the company's ethical standards and policies
Periodically evaluated
Organizational pressure plays a key role in creating ethical issue (from)
Pressure to meet a schedule Pressure to meet a sales quota
Price gouging
Pricing products at exorbitant levels
Marketing Ethics
Principles and standards that define acceptable marketing conduct as determined by various stakeholders
Ethics
Related to individual and group decisions -- judgements about what is right and wrong in a particular decision-making situation
Channel stuffing
Shipping surplus inventory to wholesalers and retailers at an excessive rate
Economic and legal responsibilities are the most basic levels of ___________ for a good reason
Social responsibility
Marketing citizenship
The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders
Consumerism
The efforts of independent individuals, groups, and organizations to protect the rights of consumers
Sustainability
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, organization, and business strategies
Cause-related marketing
The practice of linking products to a particular social cause on an ongoing or short-term basis
Strategic philanthropy
The synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits
Stakeholder orientation
Understanding and addressing the needs of all stakeholders, including communities and special-interest groups
Companies must perform regular _________ on its _________ , if necessary, discipline those found to be in violation of company standards
audits ; suppliers
Product issue product INFORMATION
covering up defects that could cause harm to a consumer (withholding critical performance information)
The interaction between corporate culture and executive leadership helps determine the firm's ___________
ethical value system
Trust is an important concern for marketers because it is the ___________ for long-term relationships
foundation
Not all codes are effective if implemented _______
improperly
Consumer lack of trust has __________ in recent years due to the financial crisis and deep recession
increased
Increasing evidence indicates that being socially responsible and ethical results in ____________ profits
increased
Because ethics and social responsibility can be profitable as well, an ___________ number of companies are incorporating them into their overall strategic market planning
increasing
Good supply chain ethics is important because
it ensures the integrity of the product and the firm's operations in serving customers
An organization's culture gives members _____ and suggests ______ for how to behave and deal with problems within the organization
meaning; rules
Bribery
occurs when an incentive is offered in exchange for an illicit advantage