Chapter 4 Social Responsibility Basic Marketing Concepts Test 3 Study Guide Social responsibility organizations obligation to maximize its positive impact and minimize obligation its negative impact on society deals with the total effect of all marketing decisions on society includes the managerial processes needed to monitor satisfy and even exceed stakeholder expectations and needs Irresponsible actions that anger customers employees or competitors may jeopardize a marketer s financial standing and have legal repercussions ex General Electric Socially responsible activities can generate positive publicity and boost sales ex Avon products 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 profitable 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 balance between society s demand for social responsibility and investors desire for profits 2 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 determined by various stakeholders including the public government regulators private interest groups consumers industry and the organization itself Cause related marketing companies link their products to a particular social cause on an ongoing 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 issues Sustainability potential for long term well being of the natural environment including all biological 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 environment ex Ford creating hybrid cars Preserve the natural environment by 1 Eliminate the concept of waste by becoming more efficient 2 Reinvent the concept of product as consumable things that can be eaten or put in the ground without harm or durable goods cars TV s computers etc that can be disassembled and recycled 3 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 many decisions Ethical issue an identifiable problem situation or opportunity that requires an individual or organization 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 regarding the function value or use of a product Distribution issue counterfeit products Promotion issue deceptive advertising or withholding important product information in a personal 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 values 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 subordinates influence the ethical decision making process Opportunity conditions that limit barriers or provide rewards Organizational Corporate culture a set of values beliefs goals norms and rituals that members of an organization share Organizational pressure plays a key role in creating ethical issues Most marketing employees take their cues from co workers in learning how to solve problems Expressed formally through code of conduct memos manuals dress codes Expressed informally through works habits extracurricular activities and anecdotes Codes of Conduct Ethics consist of formalized rules and standards that describe what the company expects of its employees promote ethical behavior by reducing opportunities for unethical behavior 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 enforcing 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 employees to report misconduct Open coaching and ethical issues are essential to nurture ethical conduct in marketing requires providing employees with ethics training clear channels of communication and follow up support throughout the organization Ethics relates to individual and group decisions judgments about what is right or wrong in a particular situation Social responsibility deals with the total effect of marketing decisions on society ethics is one dimension 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 value Chapter 18 Advertising and Public Relations The Nature and Types of Advertising Advertising paid form of non personal communication that is transmitted to a target audience through mass media television
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