MKTG 360 1nd Edition Lecture 5 Outline of Last Lecture 1. Types of marketing2. Why go global?3. Global marketing4. Management orientations5. Hofstede’s cultural typology6. Purchasing Power Parity (PPP)- The Big Mac Index7. Country of origin as brand elementOutline of Current Lecture 1. Ethics2. Consumerism and the Bill of Rights3. AMA Ethical Values and Norms4. Ethical Dilemmas as social Dilemmas5. Consumer/ Market Orientation6. Social Marketing Orientation7. Patagonia’s Stewardship8. Example of CBBR Research Current Lecture1. Ethicsa. Moral principles and values that govern the actions and decisions of individuals and groupsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.b. Help provide guidance on how to act when faced with moral dilemmasc. Can vary based on societal culture, business culture, and organizational cultured. Code of Ethicsi. Written standards of behavior to which everyone in the organization mustsubscribeii. Estimated that 86% of U.S. companies have some type of ethics code2. Consumerism and the Bill of Rightsa. Definitioni. Social movement that tries to protect consumers from harmful business practicesb. Historical Rootsi. Rachel Carson’s Silent Springii. Ralph Nader’s Unsafe at Any Speedc. Consumer Bill of Rights (Kennedy)i. Safeii. Informediii. Heardiv. Choose freely3. AMA Ethical Norms and Valuesa. Norms and Valuesi. Do not harmii. Build trust I marketing systemiii. Uphold several key values so as to increase confidence in marketing exchange system:1. Honesty (to customers and stakeholders)2. Responsibility (accept consequences of our actions)3. Fairness (balancing needs of buyer and seller)4. Respect (all stakeholders)5. Openness (in marketing activities)6. Citizenship (legal, economic, societal, charitable)4. Ethical Dilemmas as Social Dilemmasa. Social Dilemmasi. Situations in which short-term interests of individuals is in conflict with long-term interests of society and the environment (Hardin’s Tragedy of the Commons)b. Social Trapsi. Positive immediate outcome leads to long-term negative outcomec. Social Fencesi. Negative immediate outcome leads to long-term positive outcome5. Consumer/ Market Orientationa. Idea Captured by the Marketing Concepti. Purpose of organization is to…ii. Achieve long-term success of organization byiii. Creating customer value (meeting customer’s needs and delivering satisfaction better than one’s competition)iv. Establishing and maintaining a mutually-beneficial long-term relationship with the customer6. Social Marketing Orientationa. Built on the Social Marketing Concept i. Try to benefit consumers, society, and firmii. Consumer well-being1. Marketing to enhance consumers’ long-term quality of lifeiii. Sustainability 1. Designing (and recycling) products so that we meet present needs without compromising ability of future generations to meet theirsiv. Transformative consumer researchv. Triple bottom line7. Patagonia’s Stewardshipa. Productsi. Recycled polyester, organic cottonb. Packagingi. Underwear in rubber bandsc. Promotioni. Recycled paper productsd. Activismi. For us at Patagonia, a love of wild and beautiful places demands participation in the fight to save them, and to help reverse the steep decline in the overall environmental health of our planet. We donate our time, services and at least 1% of our sales to hundreds of grassroots environmental groups all over the world who work to help reverse the tide.ii. Current campaign: Arctic National Wildlife Refuge8. Cause Related Marketinga. Starbucks and America SCORESi. Former barista and DC school teacher decides kids need a safe place to goafter schoolii. Convinces coworkers to donate tips for equipmentiii. Later leaves SB and teaching to form America SCORESiv. Now in 18 citiesv. Play soccer and do poetry on alternating days9. Example of CBBR Research a. Research Questioni. Do customers who experience a service failure (e.g., the wrong coffee order) “cut firms slack” if those firms engage in “value-aligned CSR”?b. CSRi. Corporate social responsibility involves a range of socially-beneficial activities that extend beyond base-level legal and ethical requirements c. Value-aligned CSRi. CSR that is matched to the values of a firm’s consumers (e.g., environmental CSR for environmentalists)d. Cognitive Dissonance Theoryi. A customer experience cognitive dissonance when the customer encounters a service failure with a firm but is aware that the firm supports a form of CSR that the customer valuesii. The tension is uncomfortable and the customer is motivated to reduce the dissonance through “dissonance reducing strategies”e. Cognitive Appraisal Theoryi. To reduce dissonance, a customer recognizes broader outcomes from the firm’s value aligned CSRii. Perceived value alignment reduces anger and regret over choosing the firm, increases guilt over harming the firm, and encourage more favorablebehavioral responses, reinforcing the firm for its CSR, and benefiting societal