Ethics and Social Responsibility in

Marketing

Chapter 3
 Ethical Marketing= Oxymoron?

 What are ethics?

 Ethics are the “moral principles and values
that govern the actions and decisions of an
individual or group.”
 Legal v. Ethical Standards
 Laws
 Standards enforceable by the courts
 Are laws and ethics the same thing?

 Nike: Illegal? Unethical?

 Causes for the increasing focus on ethics

 Diverse value systems within the culture
 Public groups are more active
 Expectations have increased
 Decrease in ethical behavior?
Influences upon What Is Ethical

 Societal Culture and Norms

 Business Culture and Industry Practices
 Corporate Culture and Expectations
 Society

 Societal Culture
 Levi Strauss
 Societal Values
 Patents
 Businesses

 Business Culture
 The rules of the game in interactions between
buyers and sellers, and companies
 Ethics of Exchange
 Caveat Emptor
 Consumer Bill of Rights
 Businesses
 Ethics of Competition
 Economic espionage
 Costs businesses in US
& Canada nearly $100
billion each year!
 Bribery
 Gifts, favors, etc.
 Corporate Culture &
Expectations
 Code of Ethics
 Formal statement listing what comprises
acceptable behavior
 Must be very clear
 Must be equally applied throughout the
organization
 Whistleblowers
 Ethical Theories

 Moral idealism
 Considers certain rights as universal
 Do no harm
 Utilitarianism
 “The greatest good for the greatest number”
 Deontological Theories
 “The ends justify the means”
 Social Responsibility

 Companies are accountable to society or

their actions
 Three types:
 Profit Responsibility
 Stakeholder Responsibility
 Societal Responsibility
 Environment
 General Public
 Societal Responsibility
 Environment
 Green Marketing
 ISO 14000
 General Public
 Cause-Related
Marketing
 Public-Policy Issues

 Deceptive Advertising
 Advertising to Children
 Telemarketing Fraud

Source: Mower & Minor. “Consumer Behavior: A

Framework.” Prentice-Hall, New Jersey, 2001.
 Deceptive Advertising

 “Literally false or potentially misleading”

 False statements
 Misleading Safety Claims
 Misleading Affirmative Safety Claims
 Deceptive Denials of Product Risk

 Deceptive Information Omissions

 Unfair Information Omissions

Source: Mower & Minor. “Consumer Behavior: A Framework.”

Prentice-Hall, New Jersey, 2001.
 Advertising to Children

 What’s wrong with it?

Source: www.wikipedia.org
Source: www.adstrategy.wordpress.com
 Telemarketing Fraud
 Costs Americans $40
billion per year

 Who is at risk?

Source: Mower & Minor. “Consumer

Behavior: A Framework.” Prentice-
Hall, New Jersey, 2001.
 Compulsive Behavior
 Smoking
 Drinking
 Gambling
 Compulsive Shopping

Source: Mower & Minor. “Consumer Behavior: A Framework.” Prentice-Hall,

New Jersey, 2001.
 Measuring Ethical Conduct

 Social audit
 McDonald’s

 Long-term: Sustainable development

 Impact of ethical behavior:

 Word-of-mouth
 Outperform less ethical competitors
 Ethical Conduct- Consumers

 Dishonest consumer practices

 Billions of dollars lost annually
 Consumers are unwilling to pay higher
prices for ecologically safe products
 Consumers lack information