16 Marketing and Society: Social Responsibility and Marketing Ethics
ROAD MAP: Previewing the Concepts • Identify the major social criticisms of marketing. • Define consumerism and environmentalism and explain how they affect marketing strategies. • Describe the principles of socially responsible marketing. • Explain the role of ethics in marketing.
Criticisms of Marketing High Prices Deceptive Practices High-Pressure Selling Shoddy or Unsafe Products Planned Obsolescence Poor Service to Disadvantaged Consumers
High Prices Caused by: High Costs of Distribution High Advertising and Promotion Costs Excessive Markups
High Costs A heavily promoted brand of aspirin sells for much more than a virtually identical non-branded or store-branded product. Critics charge that promotion adds only psychological value to the product rather than functional value.
Social Responsibility Honest Tea offers customers, in addition to tea, a relationship with a community. Click the picture above to play video
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: • Exaggerating package contents through subtle design, using misleading labeling, etc.
High-Pressure Selling • Salespeople are trained to deliver smooth, canned talks to entice purchase. • Hard sales can occur because of prizes going to top sellers. • High-pressure selling not good for long- term relationships.
Shoddy or Unsafe Products • Products not made well or service not performed well. • Products deliver little benefit or can be harmful. • Unsafe products due to manufacturer indifference, increased production complexity, poorly trained labor, and poor quality control.
Product Safety Following its recall of 6.5 million flawed Firestone tires, product liability and safety concerns have driven Bridgestone/ Firestone to the brink of bankruptcy.
Planned Obsolescence • Products needing replacement before they should be obsolete. • Producers change consumer concepts of acceptable styles. • Intentionally holding back attractive functional features, then introducing them later to make old model obsolete.
Poor Service to Disadvantaged Consumers • Poor may pay more for inferior goods. • “Redlining” may occur in disadvantaged neighborhoods. • Higher insurance premiums to people with poor credit ratings. • “Weblining” can occur.
Marketing’s Impact on Society as a Whole Producing Too Few Social Goods False Wants & Too Much Materialism(i.e., what you own vs. who you are). Cultural Pollution Too Much Political Power
Cultural Pollution Our senses are sometimes assaulted by commercial messages.
Marketing’s Impact on Other Businesses Acquisitions of Competitors Marketing Practices That Create Barriers to Entry Unfair Competitive Marketing Practices All Can Harm Other Companies & Reduce Competition
Consumerism • Consumerism is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.
Consumerism: Sellers’ Rights The right to 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. The right to charge any price for the product, provided no discrimination exists among similar kinds of buyers. The right to spend any amount to promote the product, provided it is not defined as unfair competition. The right to use any product message, provided it is not misleading or dishonest in content or execution. The right to use any buying incentive schemes, provided they are not unfair or misleading.
Consumerism: Buyers’ Rights The right not to buy a product that is offered for sale. The right to expect the product to be safe. The right to expect the product to perform as claimed. The right to be well informed about important aspects of the product. The right to be protected against questionable products and marketing practices. The right to influence products and marketing practices in ways that will improve “quality of life.”
Environmentalism • An organized movement of concerned citizens and government agencies to protect and improve people’s living environment.
Environmental Sustainability • A management approach that involves developing strategies that both sustain the environment and produce profits for the company.
Enlightened Marketing • A marketing philosophy holding that a company’s marketing should support the best long-run performance of the marketing system.
Enlightened Marketing • Consumer-Oriented Marketing: • The philosophy of enlightened marketing that holds that the company should view and organize its marketing activities from the consumer’s point of view. • Innovative Marketing: • A principle of enlightened marketing that requires that a company seek real product and marketing improvements.
Innovative Marketing Colgate’s Total toothpaste is perhaps the best example of Colgate's passion for innovation. The breakout brand provides a combination of benefits, including cavity prevention, tartar control, fresh breath, and long-lasting effects.
Enlightened Marketing • Value Marketing: • A principle of enlightened marketing that holds that a company should put most of its resources into value-building marketing investments. • Sense-of-Mission Marketing: • A principle of enlightened marketing that holds that a company should define its mission in broad social terms rather than narrow product terms. • Click Here to View Ben & Jerry's Mission Statement
Discussion Question • Based on the societal classification scheme, how would you classify the following products? • McDonald’s Big Mac • A handgun • Airbags in an automobile • Daily vitamins
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 • Product development • General ethical standards
Marketing Ethics • What principle should guide companies and marketing managers on issues of ethics and social responsibility? Responsibility falls to individual companies and managers Free market and legal system Click Here to See: "Malden Mills: A Study in Leadership"
Ethics Programs PricewaterhouseCoopers established a comprehensive ethics program, which begins with a code of conduct called “The Way We Do Business.” Says PwC’s CEO, “Ethics is in everything we say and do.”
Interactive Student Assignment • Choose a partner and discuss the following: • Should companies follow the axiom “When In Rome…” when making ethical decisions in foreign countries? • Why or why not?
Rest Stop: Reviewing the Concepts • Identify the major social criticisms of marketing. • Define consumerism and environmentalism and explain how they affect marketing strategies. • Describe the principles of socially responsible marketing. • Explain the role of ethics in marketing.
Q: Which of the following are common product complaints? 1. poorly made products 2. products that deliver little benefit 3. unsafe products 4. all of the above AK, 7e – Chapter 16
Q: Among the deceptive marketing practices cited by critics are _____. 1. deceptive packaging 2. deceptive pricing 3. deceptive promotion 4. all the above AK, 7e – Chapter 16
Q: Deceptive practices have led to legislation, such as the _____ Act. 1. Robinson-Patman 2. FTC 3. Consumer Product Safety 4. Wheeler-Lea AK, 7e – Chapter 16
Q: The question, "What aspects of our production process create the most pollution?" is likely to come out of what practice of environmental sustainability? 1. Sustainability vision 2. New environmental technology 3. Pollution prevention 4. Product stewardship AK, 7e – Chapter 16
Q: The question, "Would making our products recyclable add value for our customers?" is likely to come out of what practice of environmental sustainability? 1.Sustainability vision 2.New environmental technology 3.Pollution prevention 4.Product stewardship AK, 7e – Chapter 16
Q: The statement, "Our mission is for our company to evolve in ways that help solve social and environmental problems" is likely to come out of what practice of environmental sustainability? 1. Sustainability vision 2. New environmental technology 3. Pollution prevention 4. Product stewardship AK, 7e – Chapter 16
Q: Consumer advocates would like to expand buyers’ rights to include all the following except: 1. the right to be well informed about important aspects of the product. 2. the right to be protected against questionable products and marketing practices. 3. the right to a full refund if the buyer is unsatisfied, no questions asked. 4. the right to influence products and marketing practices in ways that will improve the "quality of life." AK, 7e – Chapter 16
Q: Do you think it would be proper to give a "gift" in order to win an account? 1. Yes 2. No AK, 7e – Chapter 16
Q: Do you think drug companies are justified in charging high prices for their products? 1. Yes 2. No AK, 7e – Chapter 16
Q: A delicious and nutritious salad is an example of a ___________. 1. pleasing product 2. desirable product 3. salutary product 4. deficient product AK, 7e – Chapter 16
Q: Junk food is an example of a ____________. 1. pleasing product 2. desirable product 3. salutary product 4. deficient product AK, 7e – Chapter 16