Chapter 4 Social Responsibility and Ethics in Marketing

Objectives
Understand concept and dimensions of social responsibility Define/describe importance of marketing ethics Familiarize self with ways to improve ethical decisions in marketing Understand role of social responsibility and ethics in improving marketing performance

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The Nature of Social Responsibility

Social responsibility an organizations obligation to maximize its positive impact and minimize its negative impact on society

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100 Best Corporate Citizens

Copyright Houghton Mifflin Company. All rights reserved.

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Dimensions Of Social Responsibility

Social Responsibility

Marketing/Corporate Citizenship
Stakeholders Marketing Ethics Cause-Related Marketing Strategic Philanthropy

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Marketing Citizenship
The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders.

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Pyramid Of Corporate Social Responsibility

Source: From Archie B. Carroll, The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders, adaptation of Figure 3, p. 42. Reprinted from Business Horizons, July/Aug. 1991. Copyright 1991 by the Foundation for the School of Business at Indiana University. Reprinted with permission.

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Marketing Ethics
Principles and standards that define acceptable marketing conduct as determined by various stakeholders.
BBB Code of Advertising

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Cause-Related Marketing
The practice of linking products to a particular social cause on an ongoing or short-term basis.

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Strategic Philanthropy
The synergistic use of organizational core competencies and resources to address key stakeholders interests and achieve both organizational and social benefits.
IBM - Overview | Corporate Community Relations

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Social Responsibility Issues

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Green marketing
The specific development, pricing, promotion, and distribution of products that do not harm the natural environment.

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Europes Eco-Label

EUROPA - Environment - Ecolabel - Latest News

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Corporate Goals For The Natural Environment

Eliminate concept of waste Reinvent concept of a product Make prices reflect the cost Make environmentalism profitable

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Marketing Ethics
Ethical Issue An identifiable problem, situation, or opportunity requiring a choice among several actions that must be evaluated as right or wrong, ethical or unethical.

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Sample Ethical Issues Related to the Marketing Mix

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The Nature of Marketing Ethics

Individual Factors

Organizational Relationships
Opportunity

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Factors in Ethical Decision-Making

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Organizational Culture
A set of values, beliefs, goals, norms, and rituals that members of an organization share.

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Types And Incidences Of Observed Misconduct

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Improving Ethical Conduct In Marketing

Codes of conduct

Ethics Officers
Implementing Ethical and Legal Compliance Programs

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Top Management & Ethics

Talk about importance of ethics

Inform employees
Keep promises Model ethical behavior

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Reasons For Not Reporting Ethical Misconduct

Source: From National Business Ethics Survey, How Employees View Ethics in Their Organizations 1994 -2005, Ethics Resource Center 2005, p. 29. Ethics Resource Center, Washington, DC. Reprinted with permission.

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Codes of Conduct
Formalized rules and standards that describe what the company expects of its employees

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Ethics Officers
Create/enforce code

Meet with, discuss code, and advise organization members Toll-free hotlines
Salaries Of Ethics Officers

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Implementing Ethical & Legal Compliance Programs

Open communication & coaching

Ethics training
Clear channels of communication Follow-up support Enforce standards and impose penalties Part of overall marketing strategy

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Audit Of Control Mechanisms

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Challenges Of Ethical and Socially Responsible Behavior

Introduction/adaptation of new products

More user-friendly
Transparency/openness Management responsibility Predict long-term effects Balancing societys demands

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Social Responsibility and Ethics Improve Performance

$ Consumers want to buy from company associated with cause $ Companys citizenship

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