Basic Marketing Concepts Test 3 Study Guide Chapter 4 – Social Responsibility Social responsibility: organizations obligation to maximize its positive impact and minimize obli-gation its negative impact on society, deals with the total effect of all marketing decisions on soci-ety, includes the managerial processes needed to monitor, satisfy and even exceed stakeholder ex-pectations and needs· Irresponsible actions that anger customers, employees or competitors may jeopardize a mar-keter’s financial standing and have legal repercussions (ex. General Electric) · Socially responsible activities can generate positive publicity and boost sales (ex. Avon prod-ucts that sponsored the Breast Cancer Awareness crusade) Marketing citizenship: the adoption of a strategic focus for fulfilling the economic, legal, ethical and philanthropic social responsibilities expected by stakeholders· Stakeholder orientation: companies that consider the diverse perspectives of stakeholders in their daily operations and strategic planning Company Responsibilities: 1. Economic: at the most basic level, all companies have an economic responsibility to be prof-itable so they can provide return on investment to their owners and investors, create jobs for the community and contribute goods and services to the economy require finding a balancebetween society’s demand for social responsibility and investors desire for profits2. Legal: compete fairly by obeying laws and regulations 3. Ethical: marketing decisions that foster trust, which helps build long-term relationships 4. Philanthropic: not required by a company, but promote human welfare or goodwill Marketing ethics: principles or standards that define acceptable conduct in marketing as deter-mined by various stakeholders, including the public, government regulators, private interest groups,consumers industry and the organization itselfCause-related marketing: companies link their products to a particular social cause on an ongo-ing or short-term basis (ex. Yoplait “Save Lids to Save Lives” campaign) Strategic philanthropy: the synergistic use of organizational core competencies and resources to address key stakeholders interests and achieve both organizational and social benefits (ex. Home Depot’s involvement in Habitat for Humanity) Three major categories of social responsibility: 1. Natural environment: conservation, water, land and air pollution 2. Consumerism: protect the rights of consumers (safety) 3. Community relations: education and general welfare, equality issuesSustainability: potential for long-term well-being of the natural environment, including all biologi-cal entities, interaction among nature and individuals, organizations and business strategies (ex. Walmart providing on-site recycling) Green Marketing: strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting and enhancing the natural environ-ment (ex. Ford creating hybrid cars) Preserve the natural environment by: 1. Eliminate the concept of waste by becoming more efficient2. Reinvent the concept of product as consumable (things that can be eaten or put in the groundwithout harm) or durable goods (cars, TV’s, computers, etc.) that can be disassembled and recycled3. Make prices reflect the costs 4. Make environmentalism profitable Consumer Bill of Rights: 1. Right to safety 2. Right to be informed 3. Right to choose 4. Right to be heard · Marketers operate in an environment in which overlapping legal and ethical issues color manydecisions Ethical issue: an identifiable problem, situation or opportunity that requires an individual or organi-zation to choose from among several actions that must be evaluated as right or wrong, ethical or unethical · Product issue: marketers fail to disclose risks associated with a product or information regard-ing the function, value, or use of a product · Distribution issue: counterfeit products · Promotion issue: deceptive advertising or withholding important product information in a per-sonal selling situation · Pricing issue: price fixing, failure to disclose full price of a purchase Nature of Marketing Ethics: · Individual factors: people resolve ethical conflicts in their daily lives based on their own val-ues and principles of what is right or wrong · Organizational relationships: ethical choices in marketing are most of made jointly in groups or committees, or in conversations or discussions with co-workers, superiors, peers and sub-ordinates influence the ethical decision making process · Opportunity: conditions that limit barriers or provide rewardsOrganizational/Corporate culture: a set of values, beliefs, goals, norms and rituals that mem-bers of an organization share · Expressed formally through code of conduct, memos, manuals, dress codes · Expressed informally through works habits, extracurricular activities and anecdotes · Organizational pressure plays a key role in creating ethical issues · Most marketing employees take their cues from co-workers in learning how to solve problemsCodes of Conduct (Ethics): consist of formalized rules and standards that describe what the com-pany expects of its employees, promote ethical behavior by reducing opportunities for unethical be-havior because employees know what is expected of them and what kind of punishment they face if they violate rules · Ethics officers are typically responsible for creating and distributing a code of conduct, enforc-ing the code and meeting with organizational members to discuss or provide advice about ethical issues · Passage of the 2002 Sarbanes-Oxley Act, more companies have implemented hotlines for em-ployees to report misconduct · Open coaching and ethical issues are essential to nurture ethical conduct in marketing, re-quires providing employees with ethics training, clear channels of communication and follow-up support throughout the organizationEthics: relates to individual and group decisions (judgments about what is right or wrong in a par-ticular situation) Social responsibility: deals with the total effect of marketing decisions on society, ethics is one di-mension of social responsibility · General rule of thumb: if an issue can withstand open discussion that results in agreement or limited debate an acceptable solution may exist · A direct association exists between corporate social responsibility and customer satisfaction, profits and market
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