Chapter 4 provides knowledge of ethical and social responsibility in marketing. After reading chapter 4, you should be able to: Explain the difference between legal and ethical behavior in marketing, identify factors that influence ethical and unethical marketing decisions, describe the different concepts of social responsibility, recognize unethical and socially irresponsible consumer behavior.
McGrawHill/Irwin Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved 4-1 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 4, YOU SHOULD BE ABLE TO: LO1 Explain the differences between legal and ethical behavior in marketing LO2 Identify factors that influence ethical and unethical marketing decisions LO3 Describe the different concepts of social responsibility LO3 Recognize unethical and socially irresponsible consumer behavior 4-2 THERE IS MORE TO ANHEUSER-BUSCH THAN MEETS THE PALATE 4-3 LO1 NATURE AND SIGNIFICANCE OF MARKETING ETHICS Ethics Ethical-Legal Framework Laws • Ethical-Illegal • Ethical-Legal • Unethical-Illegal • Unethical-Legal Current Perceptions of Ethical Behavior 4-4 FIGURE 4-1 Four ways to classify marketing decisions according to ethical and legal relationships 4-5 FIGURE 4-2 A framework for understanding ethical behavior 4-6 LO2 ETHICAL MARKETING BEHAVIOR SOCIETAL CULTURE AND NORMS Culture Societal Values and Attitudes • Are Relative • Affect Ethical and Legal Relationships 4-7 LO2 ETHICAL MARKETING BEHAVIOR BUSINESS CULTURE AND INDUSTRY PRACTICES Business Cultures Ethics of Exchange • Caveat Emptor • Consumer Bill of Rights (1962): The Right To Safety To Choose To Be Informed To Be Heard 4-8 LO2 ETHICAL MARKETING BEHAVIOR BUSINESS CULTURE AND INDUSTRY PRACTICES The Right to Safety • Consumer Product Safety Commission The Right to Be Informed • Federal Trade Commission (FTC) 4-9 LO2 ETHICAL MARKETING BEHAVIOR BUSINESS CULTURE AND INDUSTRY PRACTICES The Right to Choose • Slotting Allowances/Fees The Right to Be Heard • Do Not Call Registry 4-10 Ethics Ethics are the moral principles and values that govern the actions and decisions of an individual or group 4-29 Laws Laws are society’s values and standards that are enforceable in the courts 4-30 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 4-31 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 4-32 Economic Espionage Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors 4-33 Code of Ethics A code of ethics is a formal statement of ethical principles and rules of conduct 4-34 Whistle-Blowers Whistle-blowers are employees who report unethical or illegal actions of their employers 4-35 Moral Idealism Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome 4-36 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 4-37 Social Responsibility Social responsibility is the idea that organizations are part of a larger society and are accountable to that society for their actions 4-38 Triple-Bottom Line The triple-bottom line is the recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth 4-39 Green Marketing Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products 4-40 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 4-41 Social Audit A social audit consists of a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility 4-42 Sustainable Development Sustainable development consists of conducting business in a way that protects the natural environment while making economic progress 4-43 ... Behavior 4- 4 FIGURE 4- 1 Four ways to classify marketing decisions according to ethical and legal relationships 4- 5 FIGURE 4- 2 A framework for understanding ethical behavior 4- 6 LO2 ETHICAL MARKETING. .. Top Management and Co-Workers • Whistle-Blowers 4- 14 FIGURE 4- 3 American Marketing Association Statement of Ethics (abridged) 4- 15 LO2 ETHICAL MARKETING BEHAVIOR PERSONAL MORAL PHILOSOPHY AND... Marketing 4- 19 LO3 MARKETING MATTERS Will Consumers Switch Brands for a Cause? Yes, If… 4- 20 LO3 SOCIAL RESPONSIBILITY IN MARKETING THE SOCIAL AUDIT Social Audit Sustainable Development 4- 21