Chapter 8 Flashcards
How are marketing and ethics connected
Ethics is part of the strategic marketing plan. It requires decisions that become part of the strategy and overall culture of the firm.
What is Salesforce’s 1/1/1 Model?
1% Time to Volunteer
1% Equity is Given to Salesforce Foundation
1% Products
*What is Social Responsibility?
*Broad concept that relates a firm’s obligation to maximize positive impact on society while minimizing negative impact
- Economic
- Legal
- Ethical
- Philanthropic
Economic and Legal Responsibilities
Most basic level of social responsibility. Firms must be profitable and obey the law.
When firms don’t adhere to higher levels, new laws are often drafted
Ethical Responsibilities
Uphold principals and standards. Do what is right, just and fair. Avoid harm.
When firms deviate, continued marketing exchanges become difficult, if not impossible.
*Marketing Ethics
*Principles and standards that define acceptable marketing conduct as determined by the public, government, private interests, competitors and the firm.
Benefits of a Focus on Ethics and Philanthropy
Goals of Marketing Program
- Trust
2. Long-term Customer Loyalty
Philanthropic Responsibilities
Go beyond marketing activities and promote human welfare and goodwill.
Cause-Related Marketing
Linking products to particular social causes
Strategic Philanthropy
Use of organizational core competencies and resources to address key stakeholders’ interests and achieve both organizational and social benefits.
Makes a very good marketing tool.
Sustainability
Programs designed to protect and preserve the natural environment.
The assessment and improvement of business strategies, economic sector work practices, technologies and lifestyles while maintaining the environment.
Green Marketing
Strategic process involving stakeholder assessment to create meaningful, long-term relationships with customers while maintaining and enhancing the environment.
Green Washing
Involves misleading a consumer into thinking that a good/service is more environmentally friendly than it actually is.
Why are companies focused on sustainability initiatives?
They are a smart marketing move.
Marketing Ethics and Strategy
Guide behavior of individuals and groups in making marketing decisions.
Consider all stakeholders
What percentage of businesses are trusted by consumers?
50%
One of a Firm’s Greatest Internal Resources
Its reputation
What is an Ethical Issue
an identifiable problem, situation or opportunity that requires and individual or organization to choose from among several actions that must be evaluated as right or wrong, ethical or unethical.
Potential Ethical Marketing Issues
Overall
- Misrepresenting the firm’s capabilities
- Manipulation or misuse of data or information
- Exploitation of children or disadvantaged groups
- Invasion of privacy
- Anti-competitive activities
- Abusive behavior
- Misuse of firm resources
Potential Ethical Marketing Issues
Products
- Misrepresentation of goods or services
- Failure to disclose product defects
- Counterfeit market products
- Misleading warranties
- Reducing package contents without reducing size
Potential Ethical Marketing Issues
Pricing
- Price Deception
- Reference pricing claims
- Price discrimination
- Predatory pricing
- Fraudulent refund policies
Potential Ethical Marketing Issues
Distribution
- Opportunistic behavior among the supply chain
- Exclusive distribution arrangements
- Slotting fees
- Tying contracts
- Failure to honor product and promotional support
Potential Ethical Marketing Issues
Promotion
- False of Misleading Advertising
- Bait-and-Switch Advertising
- High pressure sales
- Entertainment and gift giving
- Stereotypical portrayals of women, minorities or others
- Failure to honor sales promotion promises
Price Discrimination
Occurs when firms charge different prices to different customers.
Usually illegal unless the differential is based on actual cost differences (Robinson-Patman Act, Clayton Act)
Price Fixing
Occurs when rival firms collaborate to set prices.
Illegal under Sherman Act
Predatory Pricing
Occurs when a firm charges very low prices to drive competition out of business where then prices are then raised.
Illegal if low price charged is below average variable cost.
Superficial Discounting
Occurs when a firm advertises a sale price as a reduction below normal prices when it is not the case.
Why is managing supply chain ethics important?
Stakeholders hold the firm responsible for all ethical behavior of their supply chain
Impact of false of misleading marketing practices
Destroyed customer trust in an organization
Impact of ambiguous statements
Listener infers advertiser’s intended message - most often incorrectly
I.E. “helps fight”
Bribery
Occurs when an incentive (usually money or gifts) is offered in exchange for an illicit advantage
Law that prohibits American companies from making illicit payments abroad
Foreign Corrupt Practices Act (FCPA)
Benefits of Trade Associations
- Stop or delay the development of laws that restrict business practices
- Self regulation by industry
- Lest costly to businesses than laws
- More realistic and practical
Keys to Develop a Code of Conduct
- Examine high-risk areas
- State values and conduct to comply with laws
- Identify values that address ethical issues
- Find overlaps among firm and stakeholder values
- Provide examples to make understandable
- Communicate frequently and clearly
- Revise every year with input from internal and external stakeholders
6 Common Core Values of Codes of Conduct
- Trustworthiness
- Respect
- Responsibility
- Fairness
- Caring
- Citizenship
Why is Ethical Leadership Necessary?
Employees look to the leader as the model of acceptable behavior.
5 Attributes of Greater Leaders
Marketing
- Create common goal
- Obtain buy-in
- Motivate others to be ethical
- Use resources available
- Enjoy job
3 Sets of Activities of Stakeholder Orientation
- Generation of data about groups and firm’s effect
- Distribution of this information
- Responsiveness to intelligence
