Chapter Sixteen
Marketing Ethics
Roadmap:
Previewing the Concepts
1.
Identify the major social criticisms of
marketing.
2.
Define
consumerism
and
environmentalism
and explain how they
affect marketing strategies.
3.
Describe the principles of socially
responsible marketing.
Background
Nike has been heavily
criticized for NOT being socially responsible.
Accusation: use of
sweatshops and child labor overseas, and horrible working
conditions.
Accusation: targeting
low-income families by making shoes an
Nike – Socially Responsible?
Nike – Socially Responsible?
Case Study
Case Study
Behavior
Code of conduct and
six-point plan ensures more socially responsible labor practices & commissioned an independent study of Nike factories abroad.
Created a huge social
responsibility department and publishes CRS report.
Donates more than $37
Criticisms of Marketing
High prices
Deceptive practices
High-pressure selling
Shoddy, harmful, or unsafe products
Planned obsolescence
Poor service to disadvantaged
High Prices
Caused by:
– High costs of distribution
– High advertising and promotion costs
Deceptive Practices
Deceptive Pricing:
– Falsely advertising “factory” or “wholesale”
prices or large reductions from phony high retail list prices.
Deceptive Promotion:
– Overstating a product’s features or performance, running rigged contests.
Deceptive Packaging:
High-Pressure Selling
Salespeople are trained to deliver
smooth, canned talks to entice
purchase.
– High-pressure selling persuades people to
buy goods they had no intention of buying.
– High-pressure selling can occur because of prizes going to top sellers.
Shoddy or Unsafe Products
Includes:
– Products that are not made well or services that are not performed well.
– Products that deliver little benefit or that
may even be harmful.
– Unsafe products due to manufacturer indifference, increased production
Planned Obsolescence
Refers to:
– Products needing replacement before they should because they are obsolete.
– Producers who change consumer
concepts of acceptable styles.
– Intentionally holding back attractive
Poor Service to
Disadvantaged Consumers
Disadvantaged consumers are served
poorly when:
– Poor are forced to shop in smaller stores where they pay more for inferior goods.
– “Redlining” by national chain stores
occurs in disadvantaged neighborhoods.
• Redlining charges have also been
leveled against insurers, banking, health care providers and other industries.
Marketing’s Impact on
Society as a Whole
False wants and too much materialism
Producing too few social goods
Cultural pollution
Marketing’s Impact on Other
Businesses
Critics charge that a firm’s marketing
practices can harm other companies
and reduce competition.
– Acquisitions of competitors.
– Marketing practices that create barriers to entry.
Consumerism
Consumerism is an organized
movement of citizens and government
agencies to improve the rights and
Sellers’ Rights
The right to . . .
1. introduce any product in any size and style,
provided it is not hazardous to personal health or safety; or, if it is, to include proper warnings and controls.
2. charge any price for the product, provided no discrimination exists among similar kinds of buyers.
3. spend any amount to promote the product,
provided it is not defined as unfair competition. 4. use any product message, provided it is not
Buyers’ Rights
The right to:
1. not buy a product that is offered for sale. 2. expect the product to be safe.
3. expect the product to perform as claimed.
4. be well informed about important aspects of the product.
5. be protected against questionable products and marketing practices.
Environmentalism
An organized movement of concerned
Environmental Sustainability
A management approach that involves
developing strategies that both sustain
the environment and produce profits
for the company.
Levels of environmental sustainability:
– Pollution prevention
– Product stewardship
– New environmental technologies
Enlightened Marketing
A marketing philosophy holding that a
company’s marketing should support
the best long-run performance of the
marketing system.
– Customer-oriented marketing
– Innovative marketing
– Customer-value marketing
– Sense-of-mission marketing
Enlightened Marketing
Consumer-Oriented Marketing:
Enlightened Marketing
Innovative Marketing:
Enlightened Marketing
Customer-Value Marketing:
Enlightened Marketing
Sense-of-Mission Marketing:
Enlightened Marketing
Societal Marketing:
– A principle of enlightened marketing that holds that a company makes marketing decisions by considering consumers’ wants and interests, the company’s requirements, and society’s long-run interests.
Marketing Ethics
Corporate Marketing Ethics Policies:
– Broad guidelines that everyone in the organization must follow.
These should cover: – Distributor relations
– Advertising standards
– Customer service
– Pricing
Marketing Ethics
What principle should guide companies
and marketing managers on issues of
ethics and social responsibility?
– Free market and legal system
– Responsibility falls to individual companies and managers
Rest Stop:
Reviewing the Concepts
1.
Identify the major social criticisms of
marketing.
2.
Define
consumerism
and
environmentalism
and explain how
they affect marketing strategies.
3.
Describe the principles of socially
responsible marketing.
