Copyright © 2008 Pearson Education Canada

Chapter 4

Marketing and Society: Social Responsibility and Marketing Ethics

Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand marketing’s multiple responsibilities, and identify the major social and ethical criticisms of marketing 2. Define consumerism and environmentalism and explain how they affect marketing strategies 3. Describe the principles of socially responsible marketing 4. Explain the role of ethics in marketing 4-2 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Ben & Jerry’s – The Body Shop

• Early 1980’s revolutionaries such as Ben & Jerry’s or The Body Shop were social activists first, business people second • Second wave are business people who are passionate about a cause • Companies can improve their bottom lines while doing good by selling “quality products, treating employees, vendors, and franchisees with integrity and upgrading their environmental practices” 4-3 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Mountain Equipment Co-op (MEC)

• Mountain Equipment Co-operative (MEC) founded in 1971 • Its early mission was to provide quality outdoor equipment at affordable prices • Member-owned co-operative • Focus on environmental responsibility • Statement of values and ethical behaviour • Development of lifetime relationships with its members • 2 million members, sales of $197 m in 2005 • Operates retail stores in 9 Canadian cities 4-4 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand marketing’s multiple responsibilities, and identify the major social and ethical criticisms of marketing.

2. Define consumerism and environmentalism and explain how they affect marketing strategies 3. Describe the principles of socially responsible marketing 4. Explain the role of ethics in marketing 4-5 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Social and Ethical Criticisms of Marketing

• Marketing’s Impact on Individual Consumers – High Prices • High costs of distribution • High advertising and promotion costs • Excessive markups Copyright © 2008 Pearson Education Canada 4-6 Principles of Marketing, Seventh Canadian Edition

Social and Ethical Criticisms of Marketing

• Marketing’s Impact on Individual Consumers – Deceptive Practices • Pricing • Promotion • Packaging – High-Pressure Selling 4-7 Principles of Marketing, Seventh Canadian Edition Copyright © 2008 Pearson Education Canada

Social and Ethical Criticisms of Marketing

• Consumer groups, including Generation Green are claiming that Splenda’s campaign “made from sugar so it tastes like sugar” is misleading • The claim is that it leads customers to believe that Splenda is a natural sugar alternative rather than an artificial sweetener • The group is appealing to the FTC to have them stop this campaign 4-8 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Social and Ethical Criticisms of Marketing

• Marketing’s Impact on Individual Consumers – Shoddy or unsafe products – Planned obsolescence – Poor service to disadvantaged consumers Copyright © 2008 Pearson Education Canada 4-9 Principles of Marketing, Seventh Canadian Edition

Social and Ethical Criticisms of Marketing

• Marketing’s Impact on Society as a Whole – False wants and too much materialism – Too few social goods – Cultural pollution – Too much political power Copyright © 2008 Pearson Education Canada 4-10 Principles of Marketing, Seventh Canadian Edition

Social and Ethical Criticisms of Marketing

• Marketing’s Impact on Other Businesses – Acquisitions of competitors – Marketing practices which create barriers to entry – Unfair competitive marketing practices Copyright © 2008 Pearson Education Canada 4-11 Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand marketing’s multiple responsibilities, and identify the major social and ethical criticisms of marketing.

2. Define consumerism and environmentalism and explain how they affect marketing strategies 3. Describe the principles of socially responsible marketing 4. Explain the role of ethics in marketing 4-12 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Citizen & Public Actions to Regulate Marketing

• Consumerism – Traditional seller’s rights – Fundamental consumer rights – Additional rights proposed by consumer advocates • Each proposed right has led to more specific proposals by consumerists 4-13 Principles of Marketing, Seventh Canadian Edition Copyright © 2008 Pearson Education Canada

Citizen & Public Actions to Regulate Marketing

• Environmentalism – An organized movement of concerned citizens, businesses and government agencies to protect and improve people’s living environment – Environmental Sustainability • Pollution prevention • Product stewardship • New environmental technologies • Sustainability vision 4-14 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Citizen & Public Actions to Regulate Marketing

•Public Actions to Regulate Marketing – Major legal issues affect every area of marketing management, including: • Selling and advertising decisions • Channel decisions • Product decisions • Packaging decisions • Price decisions • Competitive reaction decisions 4-15 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand marketing’s multiple responsibilities, and identify the major social and ethical criticisms of marketing 2. Define consumerism and environmentalism and explain how they affect marketing strategies 3. Describe the principles of socially responsible marketing 4. Explain the role of ethics in marketing 4-16 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Business Actions Toward Socially Responsible Marketing

• Enlightened Marketing – Consumer-Oriented Marketing: • Companies view and organize their marketing activities from the consumer’s point of view.

– Innovative Marketing: • Companies seek real product and marketing improvements.

Copyright © 2008 Pearson Education Canada 4-17 Principles of Marketing, Seventh Canadian Edition

Business Actions Toward Socially Responsible Marketing

• Enlightened Marketing – Customer-Value Marketing: • Companies put most of their resources into value building marketing investments.

– Sense-of-Mission Marketing: • Companies define their mission in broad social terms rather than in narrow product terms.

Copyright © 2008 Pearson Education Canada 4-18 Principles of Marketing, Seventh Canadian Edition

Business Actions Toward Socially Responsible Marketing

• Enlightened Marketing – Societal Marketing: • Companies make marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.

Copyright © 2008 Pearson Education Canada 4-19 Principles of Marketing, Seventh Canadian Edition

Business Actions Toward Socially Responsible Marketing

• Enlightened Marketing – Societal Classification of Products • Deficient products • Pleasing products • Salutary products • Desirable products Copyright © 2008 Pearson Education Canada 4-20 Principles of Marketing, Seventh Canadian Edition

Learning Goals

1. Understand marketing’s multiple responsibilities, and identify the major social and ethical criticisms of marketing 2. Define consumerism and environmentalism and explain how they affect marketing strategies 3. Describe the principles of socially responsible marketing 4. Explain the role of ethics in marketing 4-21 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition

Business Actions Toward Socially Responsible Marketing

• Marketing Ethics – Corporate marketing ethics policies • Distributor relations, advertising standards, customer service, pricing, product development and general ethical standards – Guiding principle in policy determination • Free market and legal system • Individual companies and managers – International ethical policies are a special challenge 4-22 Principles of Marketing, Seventh Canadian Edition Copyright © 2008 Pearson Education Canada

Learning Goals

1. Understand marketing’s multiple responsibilities, and identify the major social and ethical criticisms of marketing 2. Define consumerism and environmentalism and explain how they affect marketing strategies 3. Describe the principles of socially responsible marketing 4. Explain the role of ethics in marketing 4-23 Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition