C H AP T E R

FOUR

ETHICS AND SOCIAL

RESPONSIBILITY IN MARKETING

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AFTER READING CHAPTER 6

YOU SHOULD BE ABLE TO:

Appreciate the nature and significance of ethics in

marketing.
Understand the differences between legal and ethical
behavior in marketing.
Identify factors that influence ethical and unethical
marketing decisions.
Distinguish among the different concepts of ethics
and social responsibility.
Recognize the importance of ethical and socially
responsible consumer behavior.
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PP4-AA Anheuser Buschs campaign for responsible drinking

andWhen
environment-conscious
disposition for
of packaging
Know
to Say When campaign

responsible drinking appeared first via posters in

1983 and two years later with TV commercials. Such
efforts have contributed to a sizeable decline in fatal
drunk-driving accidents and a 64% drop in teen
drunk-driving deaths since 1982.
Anheuser Busch is an advocate and sponsor or
numerous efforts to preserve the environment and is
the worlds largest recycler of aluminum cans.
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PP4-C Trends in alcoholic consumption by high school seniors

80

Percentage

75
70
65
60
55
50
'79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
Year
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PP4-A Definition of Ethics

Ethics
Ethics are
are .. .. .. ..
the
the moral
moral principals
principals and
and values
values that
that
govern
govern the
the actions
actions and
and decisions
decisions of
of
an
an individual
individual or
or group.
group. They
They serve
serve
as
as guidelines
guidelines on
on how
how to
to act
act rightly
rightly
and
and justly
justly when
when faced
faced with
with moral
moral
dilemmas
..
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dilemmas
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PP4-1 Classifying marketing decisions according to ethical and

legal relationships
Ethical
Ethical
but
but
illegal
illegal

Ethical
Ethical
and
and
legal
legal

Unethical
Unethical
and
andillegal
illegal

Unethical
Unethical
but
but
legal
legal

Ethicality

Ethical

Unethical

Illegal
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Legality
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Legal
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PP4-BB Concept Check

1. What are ethics?

2. What are 4 possible reasons for
the present state of ethical
conduct in the United States?
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PP4-CC Understanding Ethical Marketing Behavior

Consider the use of anothers ideas:
In the US copyrights, trademarks and patents are
considered intellectual property, and unauthorized
use is illegal and unethical.
Outside the US, sometimes due to the culture of a
country, unauthorized use of copyrights, patents and
trademarks is not considered unethical or illegal.
Such is the case in countries like China, Mexico and
Korea.
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PP4-D International comparison of the percent of U.S.

software package sales that are illegal copies

Percentage

100
80
60
40
20

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Benelux

Germany

Benelux

Japan

Italy

Korea

Switzerland

Iberia

Taiwan

China

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PP4-2 A framework for understanding ethical behavior

Societal
Societalculture
cultureand
and
norms
norms

Personal
Personalmoral
moral
philosophy
philosophyand
andethical
ethical
behavior
behavior

Business
Businessculture
cultureand
and
industry
industrypractices
practices

Organizational
Organizationalculture
culture
and
andexpectations
expectations
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PP4-Ea Consumer Bill of Rights

In 1962 President John F. Kennedy

outlined the Consumer Bill of
Rights that codified the ethics of
exchange between buyers and
sellers.
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PP4-Eb Consumer bill of rights - continued

Safety
Safety
Be
Be informed
informed
Right
Right to
to
Choose
Choose
Be
Be heard
heard
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PP4-DDa Two kinds of unethical behavior

1.

Industrial Espionage is the clandestine collection

of trade secrets or proprietary information about
a companys competitors.
Industrial espionage is most prevalent in hightechnology industries, such as electronics,
specialty chemicals, industrial equipment,
aerospace, and pharmaceuticals, where technical
know-how and trade secrets separate industry
leaders from followers.

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PP4-DDb Two kinds of unethical behavior

2.

The giving and receiving of bribes and kickbacks

is the second form of unethical competitive
behavior.
Bribes and kickbacks are often disguised as gifts,
consultant fees and favors. They are more
common in business-to-business and government
marketing than in consumer marketing.

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PP4-EE Foreign Corrupt Practices Act

This act makes it a crime for U.S. corporations
to bribe an official of a foreign government or
political party to obtain or retain business in a
foreign country.
Generally, ethical standards are more likely to
be compromised in industries experiencing
intense competition and in countries in earlier
stages of economic development.
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PP4-3 American Marketing Association Code of Ethics

Members of the American Marketing Association have
joined together in subscribing to its code of ethics
embracing the following topics:
1.

Responsibilities of the Marketer

2.

Rights and Duties of Parties in the Marketing

Exchange Process

3.

Organizational Relationships

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PP4-F Personal moral philosophies

MORAL
MORAL IDEALISM
IDEALISM
Considers
Considers certain
certain individual
individual rights
rights or
orduties
duties universal
universal
regardless
regardless of
of the
the outcome
outcome

UTILITARIANISM
UTILITARIANISM
Considers
Considers the
the greatest
greatest good
good for
forthe
the greatest
greatest number
number
by
by assessing
assessing the
the costs
costs and
and benefits
benefits of
ofthe
theconsequences
consequences
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PP4-FF Concept Check

1.

What rights are included in the

Consumer Bill of Rights?

2.

What ethical practice is addressed in

the Foreign Corrupt Practices Act?

3.

What is meant by moral idealism?

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PP4-4 Three conceptsSocietal

of social responsibility
Societal
responsibility
responsibility

Customers

Owners/
Stockholders

Ecological
environment

Profit responsibility

Employees

General
public

Stakeholder
responsibility

Suppliers/Distributors

Public
Publicinterest
interestgroups
groups
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PP4-G Elements of a social audit

Recognition

Of
Ofsocial
socialexpectations
expectationsand
andrationale
rationalefor
for
engaging
engagingin
insocial
socialresponsibility
responsibilityendeavors
endeavors

Identification

Of
Ofcauses
causesor
orprograms
programsconsistent
consistentwith
withthe
the
companys
companysmission
mission

Ofobjectives
objectivesand
andpriorities
prioritiesfor
forprograms
programs
Determination Of
and
andactivities
activitiesto
tobe
beundertaken
undertaken

Specification

Of
Ofthe
thetype
typeand
andamount
amountof
ofresources
resources
necessary
necessaryto
toachieve
achieveobjectives
objectives

Evaluation
Evaluation

Of
Ofprograms
programsand
andactivities
activitiesand
andassessment
assessment
of
offuture
futureinvolvement
involvement

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PP4-GGa Valdez Principles

The Valdez Principles encourage companies to:
1.
eliminate pollutants, minimize hazardous wastes,
and conserve nonrenewable resources;
2.
market environmentally safe products and
services;
3.
prepare for accidents and restore damaged
environments;
4.
provide protection for employees who report
environmental hazards;
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PP4-GGb Valdez Principles

5.

appoint an environmentalist to their

boards of directors, name an
executive for environmental affairs,
and develop an environmental audit
of their global operations to be made
available for public inspection.

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PP4-HH Concept Check

1.
2.

3.

What is meant by social

responsibility?
Marketing efforts to produce,
promote, and reclaim
environmentally sensitive products
are called ________________ .
What is a social audit?

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