McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Reserved LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 4, YOU SHOULD BE ABLE TO: Explain the differences between legal and ethical behavior in LO1 marketing Identify factors that influence ethical and unethical marketing LO2 decisions LO3 Describe the different concepts of social responsibility LO3 Recognize unethical and socially irresponsible consumer behavior 4-2 ETHICAL BEHAVIOR IN MARKETING McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Reserved ETHICS DEFINITION The moral principles and values that govern the actions and decisions of an individual or group They serve as guidelines on how to act rightly and justly when faced with moral/ethical dilemmas 4-4 NATURE AND SIGNIFICANCE LO1 OF MARKETING ETHICS FRAMEWORK Ethics Laws Ethical-Legal Continuum • Ethical-Illegal • Ethical-Legal • Unethical-Illegal • Unethical-Legal Current Perceptions of Ethical Behavior 4-5 FIGURE 4-1 Four ways to classify marketing decisions according to ethical and legal relationships 4-6 FIGURE 4-2 A framework for understanding ethical behavior 4-7 ETHICAL MARKETING BEHAVIOR LO2 BUSINESS CULTURE AND INDUSTRY PRACTICES Business Cultures Ethics of Exchange • Caveat Emptor • Consumer Bill of Rights (1962) • U.S Consumer Product Safety Commission • Federal Trade Commission (FTC) 4-8 ETHICAL MARKETING BEHAVIOR LO2 BUSINESS CULTURE AND INDUSTRY PRACTICES Ethics of Competition • Economic Espionage • Bribes and Kickbacks 4-9 MAKING RESPONSIBLE DECISIONS Corporate Conscience in the Cola War 4-10 Ethics Ethics are the moral principles and values that govern the actions and decisions of an individual or group 4-18 Laws Laws are society’s values and standards that are enforceable in the courts 4-19 Caveat Emptor Caveat emptor is the legal concept of “let the buyer beware” that was pervasive in the American business culture prior to the 1960s 4-20 Consumer Bill of Rights (1962) The Consumer Bill of Rights (1962) is a law that codified the ethics of exchange between buyers and sellers, including the rights to safety, to be informed, to choose, and to be heard 4-21 Economic Espionage Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors 4-22 Code of Ethics A code of ethics is a formal statement of ethical principles and rules of conduct 4-23 Whistle-Blowers Whistle-blowers are employees who report unethical or illegal actions of their employers 4-24 Moral Idealism Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome 4-25 Utilitarianism Utilitarianism is a personal moral philosophy that focuses on the “greatest good for the greatest number,” by assessing the costs and benefits of the consequences of ethical behavior 4-26 Social Responsibility Social responsibility is the idea that organizations are part of a larger society and are accountable to that society for their actions 4-27 Green Marketing Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products 4-28 ISO 14000 ISO 14000 consists of worldwide standards for environmental quality and green marketing practices developed by the International Standards Organization (ISO) 4-29 Cause Marketing Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products 4-30 Social Audit A social audit consists of a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility 4-31 Sustainable Development Sustainable development involves conducting business in a way that protects the natural environment while making economic progress 4-32 ... LO3 SOCIAL RESPONSIBILITY IN MARKETING CONCEPTS OF SOCIAL RESPONSIBILITY Social Responsibility Profit Responsibility Stakeholder Responsibility 4-15 SOCIAL RESPONSIBILITY IN MARKETING LO3... CONCEPTS OF SOCIAL RESPONSIBILITY Societal Responsibility • Green Marketing • ISO 14000 • Cause Marketing 4-16 SOCIAL RESPONSIBILITY IN MARKETING LO3 THE SOCIAL AUDIT Social Audit Sustainable...LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 4, YOU SHOULD BE ABLE TO: Explain the differences between legal and ethical behavior in LO1 marketing Identify factors that influence ethical and unethical